1. Midland Public Schools
9/1/2019
Midland Public Schools
Budget
June 10, 2019

2. Timeline Board Budget Workshop – April 15
9/1/2019
Timeline
Board Budget Workshop – April 15
Proposed Budget to Board and Public Hearing – June 10
Board Action (Adoption of Budget and Approval of Final Budget) – June 24
Michigan Public Act 621 of 1978, the “Uniform Budgeting Act,” requires all local governments to adopt balanced budgets, (can include funds from fund balance) in a format specified by the state, before July 1 of each year. It also requires that “the local unit shall amend the general appropriations act as soon as it becomes apparent that a deviation from the original general appropriations act is necessary and the amount of the deviation can be determined.” The final revision of the budget will take place at the end of this month.
A public school budget is not advisory in nature but rather an accounting of the source and uses of public funds. If either changes, the budget must be amended.

3. Millage Rates 18 mills on non-homestead property
9/1/2019
Millage Rates
18 mills on non-homestead property
mills on homestead and qualified agricultural property (hold-harmless)
2.95 mills on all properties for the 2015 School Building and Site Bonds
Hold-harmless millage (raises $ per pupil, so pupil count and taxable value (including PPT) play a big part in determining rate—State calculation with district input, is adjusted each year to reflect over or under collections from previous year)
City taxes are split and (up mills)
Bond and (same as first year up from last due to series II being added, TV growth about 1.39% Series I—1.390, Series II-1.560)
50% on 18 and 6 mills non-homestead and commercial

4. Major revenue assumptions
9/1/2019
Major revenue assumptions
State Aid Foundation: (UNKNOWN)
$100 per pupil foundation increase ($8631).
Categorical: (UNKNOWN)
Maintains 147a(1) MPSERS Cost Offset and 147a(2) MPSERS rate of return reduction but estimated allocation down $210,000.
Maintains 147c MPSERS rate cap.
Every budget starts with determining revenue and then determining expenditures.
The State School Aid Budget is not settled. They might struggle completing by October fiscal year.
Only 2 proposals (governor and senate) 1.5 X ($120) 2X ($135). House version released 6/6/19 $90 2X
After May revenue sharing conference—State Aid Fund down from January no extra funding 2X ($70)
147a part 1 assists with a district’s current year MPSERS liabilities; part 2 is to hold districts harmless from reduction of rate of return from 8% to 7.5% over 2 years.
147c pays for costs of unfunded accrued liabilities above the statutory cap

5. Major revenue assumptions
9/1/2019
Major revenue assumptions
State Aid Categorical Assumptions:
Retirement rates up approx. 1.4%
Maintain 31a at-risk funding at current level.
No MISTEM,104d, 147e, 22n, or Safety grants.
Retirement rates due to UAAL cap being up 0.18% and average of employees with mix of retirement plans up from 26.8% to 28% and increase of 1.2%.
On all the grants that we didn’t include there was disagreement between plans of if it should be in or agreement they should be out.

6. Per Pupil Foundation Allowance Revenue Sources
9/1/2019
Per Pupil Foundation Allowance Revenue Sources
(Estimate)
Foundation Allowance
$8,904
$8,411
$8,531
$8,631
Local Millage (Hold- Harmless)
415.31
Local Millage (Non-Homestead)
1,962.06
2,359.79
2,430.54
2,553.61
% of funding Local
26.7%
33.0%
33.4%
34.4%
State Aid Payment
$6,233.63
$5,635.90
$5,685.15
$5,662.08
Section 20(j) Payment
293.31
% of funding State
73.3%
67.0%
66.6%
65.6%
Note $470 reduction in state aid payment and loss of 20(j)
Also note that in , it was possible to add hold-harmless, local, state, and 20(j) to match the foundation. With the elimination of 20(j), this no longer works.
Exempt industrial and commercial personal property tax---lowers taxable value, State share larger, doesn’t affect debt, reimbursed by the State on Hold-harmless.

7. Major revenue assumptions
9/1/2019
Major revenue assumptions
The STEM gift/grant and WE/Diversity were fully received in
County-wide enhancement millage down approx. 6%.
MCESA special education transfers down Medicaid reimbursement down $400,000.
Enrollment -30 students (Blended Count ).
The other major part—predicting enrollment.
Conservative.
The foundation allowance and student enrollment are typically what we account for at adjustment times as we better understand at what those numbers actually work out to be.
For example lets say we only receive $70 /student that would be ($229,530) but if we don’t loss any students that would be $258, so it would be a wash, extra $20 per student would be additional $153,000, worse case $0 increase would be ($765,100).
These two factors (student count, state foundation allowance) create many different scenarios.

8. MPS enrollment (blended count) 1999-2000 to 2019-2020
9/1/2019
MPS enrollment (blended count) to

9. Enrollment Enrollment (FTE) 2008-09 2017-18 2018-19 2019-20 (estimate)
9/1/2019
Enrollment
Enrollment (FTE)
(estimate)
Elementary (K-5)
3,615
3,262
3,245
3,240
Secondary (6-12)
4,846
4,053
4,060
4,035
Special Education
464
372
376
Blended Count Enrollment
8,963
7,687
7,681
7,651
% change since
-14.2%
-14.3%
-14.6%

10. 2019-20 General Fund Revenue $81,212,554
9/1/2019
General Fund Revenue $81,212,554

11. Major Expenditure Assumptions
9/1/2019
Major Expenditure Assumptions
Continued use of the “Balance our Budget” process maintaining building and department expenditures close to the levels of the school year.
Approximate 2-3% salary increase for employees. Step increases.
Increase in medical and vision premiums of 5%. 6.5% in dental.
The other side from revenues.
Balance our Budget is our process for establishing the personnel side of expenditures. As a future graph will show approximately 15% of total expenditures.
Most of the changes in expenditures are in the 85% of expenditures which are related to personnel costs.

12. Major Expenditure Assumptions
9/1/2019
Major Expenditure Assumptions
Same level of employer HSA contributions, but switch to 2/3 in January, 1/3 in September.
Federal Allocations for Title I, IIA and ID are at 85% of No carryover included at this time.
Staffing patterns reflect the continuous process of evaluating vacancies for replacement, reduction or additional.
Federal allocations at 85%, no carryover funds included at this time.
Staffing levels affect a major portion of the expenditures.
Any additional salary comes with an approximate 50% of the salary in retirement and FICA. Other benefits (medical dental, vision, life, LTD, AD &D) sub costs, etc are not included in that. So $70,000 salary would be $35,000 ret, FICA, plus the other benefits.

13. Proposed Expenditure Changes
9/1/2019
Proposed Expenditure Changes
AMOUNT (ESTIMATE) MARCH 2019
AMOUNT (ESTIMATE) JUNE 2019
CHANGE FROM PRIOR YEAR
SALARIES
$ ,372,788
$ ,581,890
$ ,102
BENEFITS
$ ,541,848
$ ,173,373
$ ,525
PURCHASED SERVICES
$ ,603,743
$ ,610,880
$ ,137
CONTRACTED SERVICES
$ ,566,712
$ ,511,833
$ (54, 879)
SUPPLIES
$ ,332,098
$ ,149,519
$ (182,579)
CAPITAL OUTLAY
$ ,709
$ ,318
$ (427,391)
OTHER (LEASES & GIFTS)
$ ,303
$ ,546
$ (59,757)
OUTGOING TRANSFERS
$ ,243,387
$ ,315,900
$ ,513
FUND MODIFICATION
$ ,000 $
$ (700,000)
TOTAL GENERAL FUND
EXPENDITURES
$ ,621,588
$ ,117,259
$ (504,329)
Chart compares are latest budget and the proposed budget.
Expenditures are actually down just not as much as revenues. Most add in salary and benefits, less in capital outlay and fund modification (transfers to capital improvement fund) & grant expenditures

14. General Fund Expenditures (by account) $83,117,259
9/1/2019
General Fund Expenditures (by account) $83,117,259
Look at expenditures by account. Approximately 85% to personnel costs, 15% to other.

15. General Fund Expenditures (by function) $83,117,259
9/1/2019
General Fund Expenditures (by function) $83,117,259
Look at expenditures by function. Classroom 77%, Administration 7%, Business/HR 3.5%, Other 12.4%

16. General Fund Snapshot 2018-19 March (Estimate) 2019-20 June (Original)
9/1/2019
March (Estimate)
June (Original)
Change
Budgeted Revenues
$84,003,323
$81,212,554
($2,790,769)
Budgeted Expenditures
$83,621,588
$83,117,259
($504,329)
Excess Revenue/(Appropriation)
$381,735
($1,904,705)
Expected Budget Variance %-1.5%/Historical 2% to 3%
$836,216
$1,246,759
Anticipated Surplus (Shortfall)
$1,217,951
($657,947)
Anticipated Unassigned Fund Balance on June 30
$16,289,990
$15,552,043
% of expenditures
19.5%
18.7%
Variance: Can be caused by either an increase or decrease in revenue or expenses Showing a conservative estimate of variance of 1.5%, I have done 1% in the past
IF YOU GET THE HISTORICAL VARIANCE WOULD PROJECT THIS BUDGET TO BALANCE.
Unassigned-different than Fund Balance different than Unrestricted Fund Balance (Fund Balance – Inventory/Pre-paid – Restricted gifts – Assigned – Workers Comp)

17. Previous Budget Adoptions
9/1/2019
Previous Budget Adoptions
Year
Beginning Revenue
Beginning Expenditures
Revenue - Expenditures
Final Audited Change
$ 87,321,459.00
$ 89,431,384.00
$ (2,109,925.00)
$ (3,589,526.00)
$ 86,895,770.00
$ 88,929,663.00
$ (2,033,893.00)
$ (14,220.00)
$ 87,435,014.00
$ 88,207,931.00
$ (772,917.00)
$ (484,743.00)
$ 81,285,254.00
$ 84,775,068.00
$ (3,489,814.00)
$ 2,338,543.00
$ 75,939,269.00
$ 82,934,960.00
$ (6,995,691.00)
$ (1,328,972.00)
$ 75,650,490.00
$ 82,696,904.00
$ (7,046,414.00)
$ (2,087,129.00)
$ 76,211,439.00
$ 82,258,480.00
$ (6,047,041.00)
$ (2,288,401.00)
$ 77,083,586.00
$ 81,982,779.00
$ (4,899,193.00)
$ (493,861.00)
$ 78,409,105.00
$ 80,044,648.00
$ (1,635,543.00)
$ 1,365,800.00
$ 78,736,798.00
$ 77,675,967.00
$ ,060,831.00
$ 4,120,611.00
$ 79,128,914.00
$ 78,222,048.00
$ ,866.00
$ 4,620,293.00
$ 81,716,910.00
$ 80,644,747.00
$ ,072,163.00
$ 81,212,554.00
$ 83,117,259.00
$ (1,904,705.00)
It has been awhile but you have used fund balance in the past to begin your year with a balanced budget. The value of a healthy fund balance.
This chart shows how the beginning numbers have compared to the final audited change.
Revenue (last 10 years) % audited revenue as % of original High % Low 99%
Expenditures (last 10 years) 97.39% audited expenditures as % of original High 98.78% Low 96.10%
Using Averages on this Budget $1,856,421
Using Low Revenue, High Expenditures ($1,702,800)
Using High Revenue, Low Expenditures $4,171,186
Would take a 2.3% variance to cover. Variance is a combination of variance in both the revenue and expenditures.

18. 9/1/2019
General Fund History

19. 9/1/2019
Fund Balance History

20. 9/1/2019
Questions?
This presentation and a copy of the budget will be available on our website at