Public Schools of Petoskey Budget Update and Outlook February 14, 2003

The Big Picture: What We Know About FY 2002-03 at the State Level $127 million deficit in FY 2002-03 Reduction letter has been issued Legislature had 30 days (Feb. 14) to appropriate additional funds or reduce appropriation to avoid across-the-board reductions No legislative action occurred, so the 3.8% reduction will affect our March State Aid payment

At Risk FY 2002-03 Original Budget: $262,385 Reduction for Added Schools: ($ 10,132) 3.8% Reduction of Original: ($ 9,971) Amount Budgeted: $242,282 Amount Spent YTD: $242,282

State Aid Cuts – Current Year Amount Subject to Reduction (Sec. 22b) $4,958,193 Reduction Percentage: 3.8% Est. Revenue Loss this Year: $ 188,411

Current Year Changes Capital Outlay: Remainder Mostly Eliminated Supply Budgets: Reduced 20% Conferences: Reduced / Entry Fees Only Cutting in February is particularly tough as most budget expenditures are made in the beginning of the year.

Spending Freeze Non-Payroll Budget $2,133,682 Essential Items (Utilities, etc) $1,147,067 Discretionary Budget $ 986,615 20% of Discretionary Budget $ 197,323 Revised Discretionary Budget $ 789,292 Spent to Date $ 685,331 Amount Avail thru End of Year $ 103,961

FY 2003-04 Budget

FY 2003-04 Budget Environment State General Fund short $2 Billion State School Aid Fund short $366 Million State General Fund contributes $198 Million to School Aid Fund. Governor has indicated the need for across the board GF cuts to alleviate the shortfall. Bottom Line: 11% Reduction next year is the Best Case scenario

At Risk - FY 2003-04 Original Budget: $262,385 Reduction for Added Schools: ($ 10,132) 11% Reduction of Original: ($ 28,862) Amount Available: $223,391 FY 2002-03 Budget: $242,282

State Aid - FY 2003-04 Amount Subject to Reduction (Sec. 22b) $4,953,690 Reduction Percentage: 11.0% Est. Revenue Loss: $ 544,906

FY 2003-04 Cost Increases Step Increases alone: $237,205 LT Leave Staff Returning: $ 97,212 Retirement Rate to 15%: $302,529 Health Increase 20%: $515,746 Total Cost Increases $1,152,692 Lost Revenue: $544,906 Next Years Budget Challenge: $1,697,598

How We Spend Our $$ Total Expenditures (FY 02-03): $22,909,242

Revenue Overview 2002-03 2003-04 Budget Revised Local-Taxes $12,787,086 $11,932,862 $13,150,200 Local-Other 455,480 445,662 State 8,259,035 9,262,267 7,500,023 Federal 323,633 441,104 Transfers 970,746 732,287 Total $22,795,980 $22,814,182 $22,269,276

Expense Overview 2002-03 2003-04 Budget Revised Salaries $12,567,931 $12,733,303 $13,067,920 Fringes 5,297,176 5,344,576 6,162,851 Purch. Svcs. 2,352,826 2,362,587 2,363,587 Supplies 1,855,115 1,574,857 Capital Out. 565,671 478,919 382,659 Transfers 430,000 415,000 Total $23,068,719 $22,909,242 $23,966,874

Summary 2002-03 2003-04 Budget Revised Revenue $22,795,980 $22,814,182 $22,269,276 Expense 23,068,719 22,909,242 23,966,874 Profit / (Loss) $(272,739) $(95,060) $(1,697,598) Beg. Fund Balance $3,526,535 $3,431,475 End. Fund Balance $3,253,796 $1,733,877 Fund Balance % 14.11% 14.98% 7.24%

So Now What? We are looking for bright ideas!! We can easily address $200K in cost savings, but $1.7 million is tougher and should be addressed together. Cost savings suggestions? E-mail ideas to Kent or your building principal; or fill out the supplied form.

How Do We Increase Student Achievement? Even in this environment of budget constraints. We want your ideas E-mail them to Dr. J, Jane Bailey, or Building Principal; or fill out the supplied form.

Questions and Answers