Budget Work Session May 4, 2009

Board Budget Policy Board Policy 6220 requires the Board annually to direct the administration to commence development of the ensuing year’s budget by adoption of a resolution and budget development parameters. Policy states these parameters shall: A. Identify financial goals and objectives the Board requires in regard to specific cost reduction, revenue increases or other financially related objectives for particular budget elements. B. Identify budget related strategies the Board prefers the administration pursue or avoid. C. Be as specific as possible in terms of objectives, but allow for flexibility in administration's approach to budget development.

Guiding Principles Primary function of the GPPSS is to ensure the educational development of each and every student who attends our schools The district will: –Prepare a budget for which provides educational excellence for each student, yet is responsive to realities of the current financial environment and anticipated state school aid –Maintain a responsible level of fund equity –Utilize a series of financial reports to identify trends and reflect best practices

Budget Assumptions The district anticipates a $5.4 million shortfall under the following assumptions: Student enrollment will decrease by 142 students State Foundation allowance payments will decrease by $59 per pupil (offset by 2-year stimulus funding) 20J funding will remain at its current level The State established public school employee retirement rate (MPSERS) will increase from 16.54% to 16.94% Employee insurance benefit costs will increase 5% Employee bargaining unit contracts dictate salary increases based on years of service to the district and/or post-graduate credits/degrees earned (average increase in teacher compensation due to step/degree/benefits is approximately $4,500) No enrollment variations account

State of Michigan Summary Per Pupil Foundation Amount Actual Projected Increase/ (Decrease) State Aid Per Pupil $7,362$7,337($25) Hold Harmless$1,893 $0 Non Homestead$929$895($34) Foundation$10,184$10,125($59) Federal Stimulus $0$59 TOTAL$10,184 $0

Short history of budget cuts Restructuring the middle school day Past early retirement incentives Health care savings/reduction in usage and prescriptions Reductions in facility repair and maintenance Moving school board elections to November Technology initiatives (refurbished machines, etc.) Fees for secondary clubs and sports Privatizing cafeteria services Hold harmless millage and sinking fund Increasing energy efficiency Increasing class sizes until 2006 Eliminating fourth grade instrumental music Reducing the athletic budget by $450,000 Reducing purchased services by over $500,000 Reduction of central office staff

Focus Areas in Board’s Budget Parameters 1.Adjusting the District Staffing to Enrollment Ratio 2.Review of Special Education Services 3.General Operational Cost Efficiencies or Revenue Enhancements 4.Long-Term Financial Solutions

Adjusting Student to Staff Ratio Return to 18.6:1 student to teacher ratio from Enrollment projection for is 8,193 students – a decrease of 452 students from levels

Adjusting Student to Staff Ratio

Layoff list impacted by these factors: Teachers returning from leaves Job shares reduced from 6 to 4 Actual kindergarten enrollment not projections used for staffing Shift to core classes in secondary scheduling Wayne RESA special education staffing reduction (reduce one teacher of the cognitively impaired and 3 teachers of autistic students)

Current teacher layoff list (layoffs do not reflect program cuts or changes in services) 26 Elementary teachers Specials - 3 art, 5 music, 3 elementary library, 2 PE 2 Spanish teachers 1 language arts specialist 6 English teachers 1 Social Studies teacher 1 high school science teacher 5 middle school science teachers 1 computer teacher 2 high school math teachers 1 industrial arts teacher 1 speech teacher 14 special education staff

Review Special Education Services A.Area of additional savings/revenue in previous budget cycles as a result of changes in enrollment and IEP requirements B.Closing of Children’s Home

Cuts/Revenue Enhancements A. American Recovery and Reinvestment Act (stimulus) –Stimulus funding is for 2 years –Supplement not supplant –Title I and Special Education focus –Unlikely to see construction funds B. Recommended Cuts

Parameter One Elementary Teachers Classroom12.0$88,594$1,063,128 Teachers Specials2.5$88,594$221,485 Classroom Assistants2.031,455$62, $1,347,523 Middle School Teachers Classroom 5.4$88,594$478, $478,408 - continued

Parameter One High School Teachers9.688,594$850,502 Classroom Assistants1.4531,455$77,065 Paraprofessionals - Accompanists2.0 $96,373 Paraprofessionals - North (other)0.245,027$9,005 Contracted Services-North0.0 $11, $1,043,946 Building copiers/printers/supplies$150,000 Total Parameter 135.2$3,019,876

Parameter Two Special Education Teachers4.088,594$354,376 Teachers Elementary SAFE4.088,594$354,376 Classroom Assistants7.031,455$220,185 County funded Classroom Assistants16.0 Additional reductions reflected in PA 18 funding Contracted Services0.0$30,000 Total Parameter 215.0$958,937

Parameter Three Central Services Clerical- Curriculum & Instruction1.0$72,230 Clerical- Human Resources0.6$31,680 Clerical -Business/ Comm. Ed.1.5$105,572 Plant1.0$61,498 Community Ed. NIS (Net of Rev.)1.0$138,255 NIS position0.08$106,266$8,501 Hourly Information Services position0.45$15,000 Purchased Services and Supplies in Support Services $200,000 Ice Time for Hockey$120,000 Variable Expenses$729,451 Total Parameter 3$1,482,187

Other options considered Revenue Enrollment of children of employees – rejected by Board Additional cell towers Shared teachers with private/parochial – not cost effective Increase fees for athletics, change fee structure Expenditures Additional clerical and classroom assistant reductions Decrease support for struggling learners Retirement incentive Delay technology purchases on Tech Plan Eliminate all field trips Decrease sub costs-minimizing curriculum/school improvement work Close individual schools during holiday/vacation breaks Reduce number of athletic teams Reduce summer school program Fund Equity

Importance of general fund equity June 30, 2008$20,236,957 (18%) June 30, 2009 (projected)$19,493,728 (18%) June 30, 2010 (projected)$19,493,000 (18%) Necessary for borrowing between our fiscal year and the State’s Within Michigan School Business Officials’ 15-20% recommended range Equates to only three months of school district expenditures, similar to savings recommended for individual family budgets

Cuts/Revenue Enhancements What we are NOT proposing Eliminating Community Education (programs and staffing will be reduced) Eliminating extracurricular and high school sports Increasing class sizes above levels

Proposal for Community Education All classes advertised in the Spring Summer brochure will run as scheduled. This fall, we will continue to run our aquatics programs, Safety Town, and a few other classes that directly support our instructional program which are not currently offered by other local organizations. We are working cooperatively with other community organizations to maintain course offerings in the community. Staffing and registration will be handled at the administration building, with an emphasis placed on increasing online registration and payments.

High school athletics, extracurricular, co-curricular Restore a portion of the accompanist for designated classes during the school day and for performances Consider changes to fee structure for athletics

Four key concepts Excellent education requires a budget which provides for a well prepared staff, a rich variety of offerings, and well maintained facilities; the law requires the budget be balanced Wise stewardship requires appropriate fund equity and cannot rely upon the two-year, targeted stimulus funds Cost containment requires confronting expenses which outpace revenues The Board will continue its cooperative relationship with all employee groups

Future Meetings Work Session of the Board, 6 p.m., Monday, May 18, North High School Regular Meeting of the Board, 8 p.m. Monday, May 18, North High School Budget Hearing and Adoption, 8 p.m. Monday, June 22, North High School

Comments Mail Superintendent’s Office, 389 St. Clair, Grosse Pointe Call 313/ Watch & Channel 20/902 for updates