leadingthroughchange

S T A T E O F T H E D I S T R I C T 2 0 1 2

Topics for Discussion

Legislative Update

MPSERS ReformPersonal Property Tax RepealTeacher and Administrator Evaluation

School Aid Budget

Highlights of State of the StateImpact for Kalamazoo RESA Knowns and Unknowns

Kalamazoo RESA Employee Compensation and Benefit changes for 2012-2013 school year

Kalamazoo RESA Program Highlights and new initiatives

MPSERS ReformSenate bill as passed by the Senate and House bill as introduced by the House Senate:

Future compensation would no longer include tax sheltered annuities or longevity pay

New employees reportable income capped at $100,000

Employee hired before July 1, 2010 would be required to make one of the following elections: Higher contributions to keep 1.5 multiplier Keep current contribution level and move to a 1.25 multiplier for future years Freeze pension benefits and move to a defined contribution plan for future years

Hybrid employees would not be affected by these pension changes

New employees would become part of the new defined contribution 401(k) system     

New employees healthcare benefit would be eliminated and replaced with 401(k) account

Existing and future retirees pay at least 20% of health care premiums 

House bill differences:

New employees would join the Hybrid pension system

Changes in employer contribution calculation methodology

Still analyzing this bill – more information to come at a later time

Laurie Montgomery - Special Education

Snapshot: Michigan’s Economy

The State of Michigan has balanced their budget

Major tax restructuring has increased revenue to the General Fund and significantly reduced revenue to the School Aid Fund

$1.8 Billion reduction in business tax liability

Unemployment rate improving at 8.3% (April 2012)

Modest gains in employment

Modest gains in sales tax and income tax revenue levels

Statewide estimate for wage growth for FY 2013 is .5% - 1.5%

State Budget: Proposal

Three varying versions:Executive, House, Senate

Major Factors:

Foundation allowance ($0 to $208/pp increase)

Kindergarten funding change (full day for full funding)

Best Practices language (varies in each version)

Consolidation of Services incentive grants

ISD State Aid ($-5% to +5%)

MPSERS contribution rate 27.37% (from 24.43%)

Continues transfers to community colleges and universities

Continues most categoricals at current year funding

Kalamazoo RESA’s strategy is to balance the budget through various approaches

Margie McGlinchey - Instructional CenterKristi Carambula - Great Start

Kalamazoo RESA Compensation and Benefit changes for 2012-2013

Approved by the Board of Education on May 17

Average of 1% increase in salary schedules

Steps granted for all eligible employees

Change in vacation day accrual rules

Enhancement to exemplary attendance policy

Cost to the budget approximately $520,000

Costs: Retirement Rate

Increases:MIP/Basic > From 24.46% to 27.37% +2.91%Pension Plus > From 23.23% to 26.14% +2.91%This is a 11-12% increase in costs when applied to wages

What Does This Mean?General Fund = $175,000Special Ed. Fund = $480,000

Total = $655,000

Don Dailey - MiCaseBrian Schupbach - Technology & Media

Costs: Health Insurance

Changed Health Insurance Plans January 1, 2012

Estimated 14% increase in employee health/dental/vision/life/long-term disability insurance January-June 2013

Still overall savings to the budget!

Comparison to Cap unknown until Nov or Dec 2012

What Does This Mean?

General Fund = $135,000Special Ed. Fund = $480,000

Total Savings = $615,000

Maximizing our Human Resources

Wellness Committee

Operation with the belief that an active, well-balanced lifestyle will directly benefit our students, co-workers, and families

Together, establish and maintain a healthy environment in our schools that is both motivating and supportive

New director in place, new initiatives underway

Humanex Venture

Implement a hiring process which enables us to hire one more like our best, every time we have an opening

Inclusion & Diversity Committee

Embrace a culture where inclusion and diversity thrive

Aspire to create an environment that provides every individual with the opportunity to participate fully, including their many and unique ways of thinking, living, working, and learning

Karen Carlisle - Youth Opportunities Unlimited

Budget: Summary

Increased Compensation CostsWages – Steps plus 1% = $ 520,000Retirement = $ 655,000Health Insurance = $(615,000)Total Increased Costs = $ 560,000

Decreased RevenuesEducation Jobs Act = $280,000Taxable Value Decrease = $400,000Grants ending = $394,500Total Revenue Decrease = $1,074,500

Increased RevenuesMedicaid Billing = $400,000New Grants = $106,000Total Revenue Increase = $506,000

Still up in the air . . .

State aid act?

Personal property tax repeal?

Foundation allowance?

MPSERs reform?

Deb Miller - Education for EmploymentBryan Zocher - Education for the Arts

What we’re doing

Rebalancing budgets

Eliminating positions through attrition

wherever possible

Pursuing more grant funding

Taking on new initiatives

Spending down fund balance

Why we do what we do