1
Overview of Fiscal Year 2011-12Oakland Schools Proposed Budgets
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Property Tax Forecast
Property Tax decline from base year – FY 2008
Fiscal Year 2008-09 -.0075% - $ -Fiscal Year 2009-10 -3.8% - $ 8.2MFiscal Year 2010-11 -11.75% - $ 32.9MFiscal Year 2011-12 -7.5% - $ 46.7MFiscal Year 2012-13 -1.5% - $ 49.3MFiscal Year 2013-14 -0.0% - $ 49.3M
Annual property tax collection has declined from FY 2008 to FY 2014 by 22.7%Accumulative loss from FY 2008 to FY 2014 is $186.5 millionFY 2008 base year tax levy was $216.9 millionFY 2014 expected tax levy is $167.6 million
3Dollars in millions
4
State Aid Reductions
General Education: Section 81 - 5% reduction ($184,500)
($1.1M) decrease from FY 2009
Special Education: Section 51a.8 elimination ($2.8M) = $14 per pupil
reduction – countywide
Career Focused Education Held flat from prior year
($608,564) decrease from FY 2009
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Fund Balance Target Setting Protocol
The proposed protocol for the development of each fund’s year ending fund balance target will be predicated upon:
5 percent of the operating programs contained in said fund Known economic liabilities or designated reserves of a specific
fund
The fund balance target setting protocol recognizes the following economic realities:
– The State of Michigan’s economic environment– The economic status of the LEAs that comprise the Intermediate
School District.
Oakland Schools Board of Education approved the Protocol on 6/15/2009
Practice for the Special Education Fund is to distribute the amount inexcess of the target unreserved fund balance.
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Oakland SchoolsTotal Revenue Summary
Dollars in millions
FY 2012 $271.4 Million
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Revenue Assumptions
Property tax revenue decrease of 7.5% Expected investment rate of return is 1.5% on available
resources Increased local district utilization of the student
application, GenNet online software, Rubicon West online software and NextGen Exchange student program
General Education Section 81 reduced by 5% Special Education Section 51a.8 eliminated - $2.8 million All other State Aid held flat
Operating Revenue per County-wide per pupil count
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$1,240
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Operating Revenue per County-wide per pupil count
Revenue in the three major ISD operating funds since FY 08 has plunged by $54 Million, 22.7% decrease (Excluding Grants, Medicaid & Production Print) – Loss of $241 per pupil on a county wide basis
Includes PA-18 distribution reduction of $163 per pupil – all pupils, general ed
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Oakland Schools Fiscal Year 2012Total Expenditure Budget by Type
45.2%
16.4%
4.3%
26.3%
3.3%
0.4%3.8%
0.4%
Transfers to LEAs - $128.2
Salaries & Benefits - $46.6
Purchase Services - $12.2
Utilities - $1.1
Supplies, Materials, Dues & Fees - 10.7
Grant Related Expenditures - $74.5
Capital Outlay & Other - $9.5
Transfers to Other Funds - $1.0
Dollars in millions
$283.7 Million
Cash to LEAs
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Difference between Revenue & Expenditures
Total Difference: $12.3 Million
Capital Projects Funds $(3.5M) Debt Service payments $(8.8M)
Oakland SchoolsFinancial Impact of Benefit Plan Changes
2005 2006 2007 2008 2009 2010 2011
Oakland Schools
Annual Cost
Enrolled405
Enrolled400
Enrolled397
Enrolled405
Enrolled402
$ 4,656,274
$ 4,948,988$ 5,491,541
$ 6,093,774
$ 4,524,888
$ 4,417,109 $ 4,017,646 $ 4,250,968 $ 4,465,160$ 4,524,888
$ 238,637$ 931,342
$ 1,240,573
Oakland SchoolsAnnual Savings
Annual CostIf No Changes
Savings Over Six Years = $ 8,925,516
Data Source: McGraw Wentworth
Analysis of Actual Results
Enrolled385 / 313
$ 6,764,089
$1,759,497
$ 5,004,592
$ 1,628,613
Note: 1. Enrollment is noted at the bottom of each bar (2010 enrollment shows prior/post July 2010)2. Cost with no changes based on 11% annual rate of increase (most projections range from 7% to 13%)3. 2010 savings based on actual 2010 BCBS rate renewal4. 2011 cost based on Health Plus insured cost (including HRA participation rate reduction of 5%)
Enrolled279
$ 4,381,285
$ 7,508,139
$3,126,854
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Noteworthy Changes:
• Increased year to year “Back to School” program support• Shifted existing resources to priority services (Grants, SQ)
• Medicaid – increased distribution & reduced fee (For 6 years)
• Continue to subsidize ONE Network fees• Funding supporting Common Core Standards project• CFE-Regional Program Relief Funds – Only 2 years, ending in
FY 2013 ($1.6M for FY 2012 & FY 2013)
• Increased Production Print & Graphics capacity in order to serve more clients and maintain pricing & no operating subsidy
• Qualified School Construction Bond – projects that benefit the ONE Fund
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Budget Highlights
• MPSERS retirement rate budgeted at the blended rate of 23.52% (three months at 20.66% and nine months at 24.46%)
• Non-union staff healthcare insurance provider change results in decline in expected premium rates of 16.8%
• Utilities cost decrease as a result of continued purchasing on the open market
Staffing Changes
Business & Operations Departments# of
Employees2009-10
# ofEmployees
2010-11
# ofEmployees
2011-12Difference
Sub total: 75.15 69.51 67.94 (1.57)
Programs & Services Departments# of
Employees2009-10
# ofEmployees
2010-11
# ofEmployees
2011-12Difference
Sub total: 431.30 348.96 342.05 (6.91)
Total Across All Departments: 506.45 418.47 409.99 (8.48)
Other Programs & Services# of
Employees2009-10
# ofEmployees
2010-11
# ofEmployees
2011-12Difference
Field Services (Full Cost Recovery) 0.00 0.00 0.00 0.00 Oakland Opportunity Academy (Externally Grant Funded) 0.00 15.65 15.65 0.00 Homeless / Wrap Around (Externally Grant Funded) 11.05 10.00 14.00 4.00 Job Link (Externally Grant Funded) 36.00 36.33 36.33 0.00
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Note:Reduction of (87.98) FTE from FY 2010Reduction of (8.48) FTE from FY 2011
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Budget Highlights
Non-union salary & wages:
January 2011 we changed health care provider & loweredexpected premium by 16.8%
A wage freeze was implemented on January 1, 2010 forNon-union staff. Non-union wages follow the calendar year.
5 unpaid furlough days for 12 month staff (2% salary decrease)
Continuation of current employee premium share program
The progression increment movement within the market ranges plus the longevity stipends account for an average of 0.5% annually.
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Budget Highlights
Union salary & wages:
The OSTCEA and the Board of Education have a one yearextension on the existing contract, expiring June 30, 2011.
The contract includes a wage freeze implemented on July 1, 2010.
3 unpaid furlough days for 10 month staff (2% salary decrease)
Continuation of the 6% health insurance cap with a higher deductible plan.
Step increases are provided by contract for an average of 1.2% annually.
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Allocation of costs
General Allocation50% GE, 25% SE, 25% CFE
Activity Based Cost Allocation–FTE based23% GE, 25% SE, 52% CFE
Abraham & Gaffney – sq footage based50% GE, 26% SE, 24% CFE
Cost Based Allocation – Transportation73% GE, 25% SE, 2% CFE
Reference Enterprise Wide Summary Document
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General Education Fund Summary
Total Revenue: $17.8 Million– Property tax – $10.1M (56% of total revenue)– Other local revenues – $3.7M– State sources revenues – $3.5M– Other financing source revenues – $.5M
Total Expenditures: $18.0 Million– General administration – $1.5M– Finance and operations – $6.5M– Instructional services – $9.2M– Plant and fixed charges, transfers to LEAs – $.8M
20Dollars in millions
General Fund Overview
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Fiscal Year 2012General Education Fund Balance
END OF YEAR:Unassigned: $ 2,172,000
Assigned:Prepaid, Inventory and Deposits $ 29,000
Total Budgeted Ending Fund Balance $ 2,201,000_______________________________________________________
5% of GEF operating expenditures ($17.8M): $ 0.9MState Aid exposure (sec 81): $ 3.5MFund Balance Protocol Target: $ 4.4 Million
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Fiscal Year 2012 District Debt
Amount Average Annual
Payment
GEF Debt Principal: $ 4,415,000 $ 750,000
CFEF Debt Principal: $41,670,000 $ 3,100,000
QSCB Debt Principal: $14,800,000 $ 850,000
Total OS Bonded Debt: $60,885,000 $ 4,700,000
NOTE: Debt Service for the Administration Building
Project Bond (2003) and QSCB issue is pre-funded in Debt Service
Fund 310 & 313 and Debt Service for the campus renovations bond
(2007) is pre-funded in Debt Service Fund 312 through FY 2019
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General Fund Five-Year Forecast
Projection 2011-12
Projection 2012-13
Projection 2013-14
Projection 2014-15
Projection 2015-16
Revenue: 17,892,900 18,038,850 18,231,077 18,429,443 18,582,956
Expenditures: 18,031,900 18,266,991 18,486,737 18,743,464 19,034,345
Operating Excess (Deficit)
(139,000)
(228,141)(255,661)
(314,021) (451,390)
End of Year Fund Balance:
Assigned: Prepaid, Inventory and deposits 29,000 29,000 29,000 29,000 29,000
Unassigned 2,172,000 1,943,859 1,688,199 1,374,178 859,749
Total 2,201,000 1,972,859 1,717,199 1,403,178 951,788
End of Year Unreserved FB as % of Expenditures 12.12% 10.80% 9.29% 7.49% 5.00%
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ISD Budget Resolution
Revised School Code 380.624 - Overview1. Not later than May 1 of each year, the ISD shall submit
proposed budget for next fiscal year to the board of each constituent district for review
2. Not later than June 1 of each year, the board of each constituent district shall review the proposed ISD budget, shall adopt a board resolution expressing its support for or disapproval of the proposed budget
3. Mail copy of resolution indicating support or disapproval (with rationale) to the Oakland Schools Board of Education
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General Education Fund
Questions & Comments
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Special Education Fund Summary
Total Revenue: $132.8 Million– Property tax – $128.6M (96% of total revenue)– Other local revenues – $1.4M– State sources revenues – $2.6M
Total Expenditures: $132.8 Million– Program supervision and direction – $2.4M– Program operations – $7.2M– Plant and fixed charges – $6.8M– LEA transfers and program subsidies – $116.4M
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Special Education Fund Overview
*FY 2004 contains “one time” operating adjustment for prior years **Dollars in millions
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Fiscal Year 2012 Special Education Program Support & Subsidies
PA-18 Base Distribution $ 114,080,600
Extraordinary Contingency $ 250,000
Section 24 subsidy $ 100,000
Group Homes $ 1,200,000
Havenwick $ 150,000
SEI Regional Day Treatment $ 450,000
Michigan Rehab Services Cash Match $ 180,000
Total $ 116.410,600
PA-18 Base Distribution declined $(29.2M) from FY 2010
29 Dollars in millions
Oakland Schools Special Education Expenditure Budget Comparison
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PA-18 Base Distribution FY 2003-2016
Dollars in millions
Trend Line: RedAfter Property Tax Decline: Blue
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Fiscal Year 2012Special Education Fund Balance
END OF YEAR:Restricted: $ 835,700
Restricted:Future SE Center Facility Renovations $ 386,000
Total Budgeted Ending Fund Balance $ 1,221,700
5% of SEF operating expenditures ($16.3 m): $ .815MState Aid exposure (sec 51a, 51a.8) $ 2.6MFund Balance Protocol Target: $ 3.415 Million
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Special Education Five-Year Forecast
Projection
2011-12Projection
2012-13Projection
2013-14Projection
2014-15Projection
2015-16
Revenue: 132,849,200 131,646,025 131,995,730 132,346,477 132,377,299
Expenditures: 132,789,100 131,520,830 131,882,006 132,234,477 132,264,739
Operating Excess (Deficit) 60,100 82,746 125,195 113,724 112,580
End of Year Fund Bal:
Restricted Center Program Facility Renovation 386,000 486,000 586,000 686,000 786,000
Restricted Special Ed 835,700 860,895 874,619 887,093 899,653
Total 1,221,700 1,346,895 1,460,619 1,573,093 1,685,653
End of Year Restricted FB % net of LEA
O.T. 5.00% 5.00% 5.00% 5.00% 5.00%
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Special Education Fund
Questions & Comments
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Career Focused Education Fund Summary
Total Revenue: $32.7 Million– Property tax – $31.5 M (96% of total revenue)– Other local revenues – $0.6 M– State sources revenues – $.4 M– Other financing source revenues – $0.2 M
Total Expenditures: $32.5 Million– Campus and other program administration – $21.3 M– LEA transfers and direct program operations – $4.9 M– Facility and technology maintenance/renovations – $0.3 M– Plant and fixed charges – $6.0 M
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Career Focused EducationFund Overview
Dollars in millions
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Fiscal Year 2012Career Focused Education Fund Balance
END OF YEAR:Restricted: $ 5,288,900
Non-Spendable:Prepaid, Inventory and Deposits $ 67,200
Total Budgeted Ending Fund Balance $ 5,356,100_______________________________________________________
5% of CFEF operating expenditures ($27.5): $ 1.4 MState Aid exposure (sec 61a.1): $ .4 MFund Balance Protocol Target $ 1.8 Million
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Career Focused Education5-Year Forecast
Projection
2011-12Projection
2012-13Projection
2013-14Projection
2014-15Projection
2015-16
Revenue: 32,793,500 32,485,508 32,573,281 32,673,274 32,673,585
Total Expenditures: 32,510,000 33,803,771 32,852,911 33,392,651 34,011,770
Operating Excess (Deficit) 292,500(1,318,263
) (279,630) (719,376) (1,338,185)
End of Year Fund Balance
Restricted 5,356,100 4,037,837 3,758,208 3,039,831 1,700,646
End of Year Restricted FB as % of Expenditures 16.48% 11.94% 11.44% 9.10% 5.00%
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Career Focused Education Fund
Questions & Comments
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Proposed Grants and Funded Projects Summary
Total dollar award value of all current grants and funded projects: $74.5M
New Awards $51.8M Carry Over $22.7M
Direct transfer to districts: $62.8M ISD administered grants and projects: $11.7M
(Includes JobLink $5.5M)
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Other Funds
Cooperative Activities Fund 271 – Oakland Network for Education (ONE)
Cooperative Activities Fund 272 - Alternative Education High School
Cooperative Activities Fund 273 – Medicaid Debt Service Fund 310 – Administrative Building Bond 2003:
15 years, ending 2018 Debt Service Fund 312 – CFE Campus Renovations Bond: 29
years, ending 2036 Debt Service Fund 313 & 314 – Qualified School Construction
Bond:17 years, ending 2027
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Other Funds
Capital Projects Fund 404 - CFE Technical Campus Renovations Phase II Project
Capital Projects Fund 406 – Admin Bldg Renovation & Maintenance Capital Projects Fund 408 – Qualified School Construction Bond Capital Projects Fund 409 – New JobLink facility Production Print Fund 710 – Enterprise Fund (subsidy eliminated) Risk Related Activity Fund 810 – Internal Service Fund
(unemployment pre-funded)
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Questions & Comments