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Oakland Schools BudgetPresentation 2011-2012May 4, 2011
2
Doing More with More:More creativity, more collaboration
Primary goal is to retain core services to our local school districts
District demand for ISD services is growing in many areas
Revenue to the ISD continues to decrease in all funds
3
Key Factor in Budget Development
Local School District Funding– Student count & Foundation Allowance (70%)
Intermediate School District Funding– Revenue based primarily on property taxes (90%)
4
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 2009 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
5Dollars in millions
6
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
7
Cost Containment Reductions & Measures in Response to Declining Revenue
Staff cumulative loss of 6% to salaries (freezes, furloughs, increased premium sharing over last 3 years)
Reduced staff by 18% last year, total of 30% reduction since 2002-03
Continued planned spend down of fund equity to 5% Reduction in travel & other purchased services Lower contractors’ pay rates Less frequent equipment replacement Lease consolidation Lower energy consumption
8
Oakland Schools, Current Benefit Plan Summary
January 2011 - Non-union– Health Plus PPO, employees premium share ranging up to 4.5%– Flexible Blue, employee paid bonus and H.S.A. contribution– Prescription co-pay changes from $10/$20 to $5 Generic and $30 Brand– Spousal surcharge raised to 6% of two person cost
July 2010 - Union– 6% cap in place – year to year carry-over– MESSA Choices– Prescription benefit $10 generic and $20 brand name– Office visits $5 co-pay– Current contract expires June 30, 2011
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
10
Over 94% of Oakland Schools Budget is Spent on Services to Local Districts
FY 2012 Proposed – $257.8 Million
Includes GEF, SEF, CFEF and Grants
11
About those services to LEAs
Services are prioritized by local superintendents and their staff through a survey done every 3-4 years.
Usage data from District Service Report Feedback on services is collected annually from each
referent group (HR, finance, instruction, technology, etc.)
Input to Oakland Schools – Continuous Improvement Plan
Instructional Initiatives driven by LAC-O priorities State & Federal mandates
12
Oakland Schools Programs & Services
Highlights from 2009/2010 District Service Report
• Increase Student Achievement• Serve diverse needs of schools• Decrease costs/increase efficiencies
What percent of our 3rd – 8th grade students Met Standards on their MEAP tests?
Reading 3-8MEAP 2005-06 - 2010-11 Grades 3 - 8 Combined
0
10
20
30
40
50
60
70
80
90
100
Pon
tiac
(232
9)
Oak
Par
k (1
325)
Haz
el P
ark
(146
5)
Fer
ndal
e (9
96)
Mad
ison
(47
7)
Sou
thfie
ld (
3591
)
Lam
pher
e (1
151)
Wat
erfo
rd (
4710
)
Cla
renc
evill
e (8
22)
Hol
ly (
1565
)
Mic
higa
n
Bra
ndon
(14
18)
Oak
land
(78
837)
Cla
wso
n (7
75)
Wes
t B
loom
field
(29
76)
Oxf
ord
(209
3)
Far
min
gton
(49
35)
Roy
al O
ak (
2174
)
Hur
on V
alle
y (4
443)
Wal
led
Lake
(68
85)
Avo
ndal
e (1
549)
Ber
kley
(20
15)
Cla
rkst
on (
3606
)
Sou
th L
yon
(325
6)
Lake
Orio
n (3
515)
Nov
i (28
88)
Tro
y (5
270)
Roc
hest
er (
6672
)
Birm
ingh
am (
3687
)
Blo
omfie
ld H
ills
(224
9)
District (Fall 2010 Count)
Per
cen
t P
rofi
cien
t
Reading 05-06 Reading 06-07 Reading 07-08 Reading 08-09 Reading 09-10 Reading 10-11
What percent of our 3rd – 8th grade students Met Standards on their MEAP tests?
Math 3-8MEAP Fall 05 - Fall 11 Grades 3-8 Combined
0
10
20
30
40
50
60
70
80
90
100
Oak
Par
k (1
322)
Pon
tiac
(233
6)
Haz
el P
ark
(145
8)
Sou
thfie
ld (
3598
)
Mad
ison
(48
8)
Fer
ndal
e (9
93)
Cla
renc
evill
e (8
22)
Wat
erfo
rd (
4709
)
Mic
higa
n
Lam
pher
e (1
180)
Hol
ly (
1565
)
Bra
ndon
(14
22)
Avo
ndal
e (1
549)
Cla
wso
n (7
75)
Oak
land
(79
043)
Roy
al O
ak (
2168
)
Far
min
gton
(49
43)
Wes
t B
loom
field
(29
86)
Ber
kley
(20
14)
Oxf
ord
(209
5)
Cla
rkst
on (
3612
)
Hur
on V
alle
y (4
447)
Wal
led
Lake
(69
36)
Lake
Orio
n (3
518)
Sou
th L
yon
(325
5)
Tro
y (5
298)
Roc
hest
er (
6696
)
Nov
i (28
88)
Birm
ingh
am (
3703
)
Blo
omfie
ld H
ills
(226
7)
District (Fall 2010 Count)
Per
cen
t P
rofi
cien
t
Math 05-06 Math 06-07 Math 07-08 Math 08-09 Math 09-10 Math 10-11
20
Professional Development and Instructional Services
More than 54,500 participants attended 2,000 ISD and regional events
Pearson Benchmark used by 26 districts and Inform by 27 districts with 50% subsidy ($600,000) from ISD
Nearly 537,000 assessments administered 3,644 Special Education students received direct services More than12,000 hours of Instructional Services
assistance provided to LEAs
21
Professional Development and Instructional Services
$2,901,062 worth of materials provided to students with special needs
Homeless served 1,511 students Wraparound served 117 students 1,242 Back to School (decrease of 103) and 1,024 truant
students (decrease of 5) served $31,540,342 saved by districts using Career Focused
Education programs, including the Oakland Schools Technical Campuses
22
Technology, Business and Operational Services
SPAM filtering blocked more than 1.4M SPAM emails/day Student information system (Zangle) saved $56,795 each for 17
districts totaling $965,515 AMS Business/Finance/HR application saved 6 districts $85,797
each, totaling $514,782 Tech Services fielded and resolved 21,586 technical assistance
calls from local districts Transportation collaboration helped reduce Special Education bus
mileage by 189,396 miles with an estimated savings to 23 school districts of $1.6M.
23
Technology, Business and Operational Services
$3.1M volume of cooperative purchases in Oakland County; participated in more than $12.4M of purchases in statewide competitive bids
Production Printing & Graphics produced 10.3M copies at reduced cost and free delivery to local districts
Local districts received $6,947,146 through Medicaid Fee for Service revenue
Fee for service support to Brandon, Clawson, Madison, Oak Park, Pontiac, Southfield and South Lyon
Technical Campus Student Enrollment – 1st semester enrolment 3,070– 2nd semester enrollment 2,928
24
Program HighlightsProposed 2011-2012 Budget
Continue alternative high school program in Southwest Quadrant at 120 FTE/ $6,700 per FTE
Provide resources for formative student assessments aligned to state standards
Maintain resources for at risk schools Place more external service staff in LEAs upon request Increase Back to School program - over 1,000 middle school
students across the county (2009-10 had 103 fewer referrals than 2008-09 but the numbers are way up in 10-11 or 448 more referrals than in 08-09)
FY 2011-12 Budget Highlights Program Support & Subsidies
Shift existing resources to priority services (Grants, SQ) Increased Medicaid distribution & reduced fee (For 6 years) Continue to subsidize ONE Network fees CFE Transportation Reimbursement - $2m Increase Production Print & Graphics capacity in order to
serve more clients and maintain pricing & no operating subsidy Use Qualified School Construction Bond for projects that
benefit the ONE Fund
25
26
FY 2011-12 Budget Highlights Program Support & Subsidies
Continuation of Inform subsidy - $400,000 ONE Consortium credit - $300,000 Common Core Curriculum support - $650,000 Targeted Schools $19.3m for direct instruction of 3,000 students in high-end/high-tech
programs at the Technical Campuses Regional CTE program support - $2.5m Continue CFE-Regional Program Relief Funds – Only 2 years, ending
in FY 2013 ($1.6M for FY 2012 & FY 2013) Atlas-Rubicon West, curriculum management system subsidy -
$143,000 Discovery Streaming, video content streaming software subsidy -
$127,800
27
FY 2011-12 Budget Highlights Program Support & Subsidies
Regional Procurement Process (cooperative contract network with over $10.4 million of annual usage)
AMS, Zangle, ONE Network technical support Beverage Consortium Inter-district mail services Tri-County Alliance Provide Special Education PA-18 funding and support -
$116.4M (decreased by $29.2m from FY 2010)
28
Overview of Fiscal Year 2011-12
Oakland Schools Proposed Budgets
29
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.
30
Oakland SchoolsTotal Revenue Summary
Dollars in millions
FY 2012 $271.4 Million
31
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
County-wide per pupil operating revenue
32
$1,240
33
County-wide per pupil operating revenue
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
34
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
35
Difference between Revenue & Expenditures
Total Difference: $12.3 Million
Capital Projects Funds $(3.5M) Debt Service payments $(8.8M)
36
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
37
Note:Reduction of (87.98) FTE from FY 2010Reduction of (8.48) FTE from FY 2011
38
Budget Highlights
Non-union salary & wages:
January 2011 we changed health care provider and lowered expected premium by 16.8%
A wage freeze was implemented on January 1, 2010 for non-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.
39
Budget Highlights
Union salary & wages:
The OSTCEA and the Board of Education have a one year extension on the existing contract, expiring June 30, 2011.
The contract includes a wage freeze implemented on July 1, 2010.
Three 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.
40
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 for more information
41
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
42Dollars in millions
General Fund Overview
43
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
44
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 (funds): $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
45
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%
46
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
47
General Education Fund
Questions & Comments
48
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
49
Special Education Fund Overview
*FY 2004 contains “one time” operating adjustment for prior years **Dollars in millions
50
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
51 Dollars in millions
Oakland Schools Special Education Expenditure Budget Comparison
52
PA-18 Base Distribution FY 2003-2016
Dollars in millions
Trend Line: RedAfter Property Tax Decline: Blue
53
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.2) $ 2.6MFund Balance Protocol Target: $ 3.415 Million
54
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%
55
Special Education Fund
Questions & Comments
56
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
57
Career Focused EducationFund Overview
Dollars in millions
58
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
59
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%
60
Career Focused Education Fund
Questions & Comments
61
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)
62
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
63
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)
64
Questions & Comments
