East Lansing Public Schools

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East Lansing Public Schools

• BUDGET PLANNING and DEVELOPMENT
• FISCAL YEAR 2007/08
• May 21, 2007

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Table of Contents

• I. Budgetary Challenges
• II. Budget Assumptions
• III. Most Likely Scenario
• IV. Proposed Solutions
• V. Additional Notations
• VI. Next Steps

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I. Budgetary Challenges

1. State Budget/Revenue Outlook
2. Foundation Allowance
3. Student Enrollment
4. MPSERS Contribution Rate
5. Health Insurance
6. Fund Balance

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I. Budgetary Challenges State Budget/Revenue
Outlook

• Total State Budget 41.7B
• Two Major Funds GF 9.2B, SAF 13.1B
• January 2007 Consensus Revenue Estimating
  Conference
• 06/07 State revenues significantly below
  projections
• 06/07 GF shortfall estimated at 607 million
• 06/07 SAF shortfall estimated at 377 million
• SAF shortfall equates to 244 per pupil (ELPS
  832,000)
• SOS address Governor indicates she will not slash
  school funding mid-year (i.e. no pro-ration)
• Governor and Legislators yet to reach a solution
  
• Pro-ration letter has been issued to Districts
• 122 per pupil pro-ration (approx. 416,000 to
  ELPS)

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I. Budgetary Challenges Foundation Allowance
Per Pupil Increases


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I. Budgetary Challenges Declining Enrollment
(Blended FTE)


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I. Budgetary Challenges MPSERS Contribution
Rate


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I. Budgetary Challenges Health Insurance
Annual Premiums


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I. Budgetary Challenges IISD Districts Fund
Balance at June 30, 2006


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II. Budget Assumptions

• Major Revenue Assumptions
• Foundation Allowance no increase est at 06/07
  level of 8,517
• Blended Enrollment to remain constant at 3,410
• County Sp Ed allocation to decrease 9
• Major Expenditure Assumptions
• Employee Salaries - increase from 1.75 to
  1.50 some groups remain unsettled
• Moving Eligible Employees up on step and
  longevity
• MPSERS contribution rate blended rate of 16.84
  
• Health Insurance Premiums 9.9 increase
• Utilities no increase

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III. Most Likely Scenario

• Projected 07/08 Budget Deficit
• Revenue decreases of 280,000
• Expenditures
• Salary and Benefit increases of 1,037,000
• Supplies/PS/Capital Outlay increases of 87,000
• 06/07 Structural Deficit 801,000
• Total Projected 07/08 Deficit of 2,205,000

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IV. Proposed Solutions

• 1. Impact of Voluntary Severance Plan (VSP) and
  modified staffing
• 2. Reduction of 22.0 full time equivalent (fte)
  (teaching administrative staff) due to
  retirements, resignations, leaves
• 3. Significant thought and input from
  administrative group results in replacing 13.9
  fte
• 4. 8.1 fte reduced as follows
• 3.0 fte _at_ Elementary Level (K-6)
• .2 fte _at_ Middle School Level (7-8)
• 2.4 _at_ High School Level (9-12)
• 2.5 in Special Education (K-12)

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IV. Proposed Solutions (cont.)

• 5. Also, a reduction of 3.9 fte from the
  paraprofessional staff is proposed
• 6. Reductions in fte 921,500
• 7. Additional savings from VSP/retirements
  214,000
• 8. Total Staffing Reductions from 06-07 to
  07-08 1,135,500
• 9. Additional proposals impacting deficit
  (Additional Impact)
• Reduce HS security 8,000
• Reduce legal fees 27,000
• 1 year delay on purchase of new busses 130,000
• Culture of accountability leads to spending at
  99 level 320,000

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IV. Proposed Solutions (cont.)

• 10. Total Staffing Reductions Additional
  Impact 1,620,500
• 11. Pending Issues
• Non-core subject area service to parochial
  schools
• Modifications to food service
• Modifications to Title I
• 12. Potential favorable impact of Pending
  Issues 254,000
• 13. If Staffing Reductions Additional
  Impact, then deficit is approximately 584,500
  leading to an anticipated fund balance of 8.1
  in June, 08

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IV. Proposed Solutions (cont.)

• 14. If Staffing Reductions Additional
  Impact Pending Issues, then deficit is
  approximately 330,500 leading to an anticipated
  fund balance of 9.0 in June, 08 .
• 15. A foundation allowance increase of 171 per
  student in 07-08 584,500
• 16. A foundation allowance increase of 97 per
  student in 07-08 330,500

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V. Additional Notations

• 1. A 07-08 general fund adoption based on the
  proposed solutions yields, among other things
• No program reductions, with the possible
  exception of minor changes in HS and MS non-core
  subject course offerings
• Supply budgets remain the same as 06-07
• Modest increase in curriculum/textbook budget for
  07-08
• New computers would be ordered and installed in
  K-4 schools
• There would no need to layoff any member of the
  teaching staff prior to 07-08 due to financial
  considerations

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V. Additional Notations (cont.)

• Up to 4 paraprofessionals could have reduced
  schedules or be notified that there exists the
  possibility their services are not planned for in
  07-08
• Could consider bus purchase and/or other issues
  in November, after enrollment and foundation
  allowance information is in hand.
• 2. Note We are very concerned about the 08-09
  fiscal year.

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Additional Notations (cont.)

• 3. Strategic Planning initiatives will need to
  begin in the early fall. Financial goals are
  prepared as follows
• Identify and develop collaborative partnerships
  (City of EL, State of MI, MSU, IISD, LEA) to
  improve efficient use of funds.
• Develop and implement a standardized internal
  financial form for program evaluation (cost
  analysis).
• Research and implement programs (health care,
  food services, purchase cards) to control costs.

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V. Additional Notations (cont.)

• Gather RFPs of contracted services to ensure
  competitive quality and cost-effective standards
  are regularly evaluated.
• Establish a culture where budget planning is
  considered a 12 month process (multi-year
  projections).
• Explore zero based budgeting.
• Communicate financial realities effectively to
  the East Lansing Community.

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V. Additional Notations (cont.)

• Consider funding opportunities such as sinking
  fund, bond issues, enhancement millages,
  technology bond.
• Evaluate and enhance opportunities for grants,
  donations, contributions and fees.
• Study prospects related to commercialization
  (advertising).
• Study opportunities for community education,
  recreation, child care expansion and enrichment
  programs.

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V. Additional Notations (cont.)

• Undertake cost/benefit analysis of Schools of
  Choice program.
• Monitor communication with key elected officials
  and civic groups.
• Educate legislators regarding issues impacting
  public education.

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VI. Next Steps

• 2007-08 Revised Budget Calendar
• May 21st BOE meeting proposed budget
  recommendations
• June 3rd Notice of Public Hearing (Truth in
  Taxation)
• June 11th BOE meeting public hearing on
  proposed 2007-08 budget
• June 25th BOE meeting adopt 2007-08 proposed
  budget
• By law BOE must adopt budget by June 30