AFrameworktoAddresstheTechnologyGapintheGrossePointePublicSchool SystemAFinancialApproachnotDependentonaBond

Overview
TheGrossePointePublicSchoolSystem(GPPSS)hasatechnologygap.Thevastmajorityofdistrict stakeholders,bothforandagainsttherecentlydefeatedtechnologybondvote,agreeonthis.Thetech bondsfailure,however,indicatesthatthecommunitywantstheproblemsolvedadifferentway. Betweenthemarginofthebondsdefeat(70%to30%)andtheurgencytosuccessfullyrenewtheHold HarmlessandSinkingFundmillages,thedistrictcannotdependuponthepassageofabondtoaddressthe problemsanytimesoon.Thismeansthatitmustlooktoitscurrentfundingoptions,boththeGeneral, SinkingFund,andanyotheravailablesourcesofrevenue. Thedocumentrepresentsaframeworktohelpthedistrictmoveforward.Itshouldnotbethoughtofasa specificproposal.Theframeworkcontainedhereproposesthatcapacitycanorwillexisttoallowthedistrict toaddressitsmostpressingtechnologyneeds(a)withoutavotedbond,(b)withoutcuttingstaff,(c)without reducingstaffpay,(d)whilemaintainingtrajectorytowarda10%GeneralFundEquityby201617. Materialsusedasthebasisforthisframeworkareprovidedby: 1. ThePlanteMoranstudypresentedinMarch2012(availablehere). 2. TheBasso/WrightHunter/Ehresmanstudy(availablehere). 3. Thedistrictsfinancialreportsareavailableatwww.gpschools.org. Theconditionsexisttoaddresstheprimaryneedsbeginninginthe201415budget/schoolyearpending certainvariablesthatshouldbedecidedbyJuneandwithoutrelianceupontheapprovalofatechnology bond.Thehighlightsinclude: LeasingsomecombinationofPCs,laptops,tablets,and/orChromebooksoverafouryearperiodto giveallstaffmembersthedevicestheyneedandenablinga2:1ratioofstudenttoacomputing devices(ofsometype).. Fundingkeyinfrastructureupgradesincludingnetworkswitchesandrouters,telephonesystem, serversandstorageyetfundingtheminawaythatallowsformoreflexibilityofacquisition. CompletingtheWiFibuildoutneededinallbuildings. Theframeworkamountstothis: 1. Identify$8.6millioninGeneralFundbudgetcapacityoverthenextfouryearsstartinginthebudget yearstartingJuly,2014andextendingthroughJune,2018. a. Usethistofundthetechnologyrequirementsthathaveausefullifemoresuitedtoafour yearcycleandcreateapermanentplaceinthebudgetforthem 2. UsetheSinkingFundtocompletethenecessaryWifiexpansioninallthedistrictbuildingsby makingthisapriorityofotherplannedprojects Pleaseviewthisreportasaframeworkforagoforwardplanmorethandwellingonthespecificbreakdown. AnexampleisthenumberandratioofPCsandcomputingdevices.Thosearedetailstobeaddressedifwe canidentify$9Mto$12Mofbudgetcapacity.

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AFrameworktoAddresstheTechnologyGapintheGrossePointePublicSchool SystemAFinancialApproachnotDependentonaBond

AReviewofthePlanteMoranStudy
Inthe201112schoolyear,thedistrictcontractedPlanteMorantodoaTechnologyAssessment.The resultswerepresentedtotheBoardinMarch2012. Thereport(quotedverbatimhere)identifiedthefollowingpressingneeds.Recallthisreportisnowtwoyears oldandconditionshavechangedsinceitspublication,thecommentaryonwhichfollows.(Italicsandbold aremyemphasis): 1. TheDistrictishamperedbyagingtechnology,inadequatebandwidthbetweensitesandlimited wireless. Themajorityofworkstations(66%)andlaptops(85%)aremorethan7yearsold.Almost onequarter(22%)are10yearsorolder. Connectivitybetweensitesisleased100Mbps(150Mbpsatthehighschools)requiring theDistricttoimplementserversinadecentralizedmanner. WirelessislimiteddistrictwidealthoughtheWANandtheenduserdeviceswillneedtobe upgradedtofullytakeadvantageofwireless. 2. Fromastaffingperspective,endusersinterviewedandsurveyrespondentswereconsistentIT departmenthelpstheDistrictachievepositiveresults(85%agreed). Staffinglevelsareinadequate(37%believedthatstaffinglevelsweresufficient.) 3. WecomparedGrossePointePublicSchoolstopeerdistricts. GrossePointecomparesfavorablywith1.8studentsperworkstationand763students perITFTE.Whilewedidnotobtaindataontheageofworkstations,ourexperienceisthat GrossePointehasolderworkstationsonaveragethanmanyofthecomparative districts. GrossePointeisoneofthefewdistrictssurveyedthatdoesnothaveafulltimeDirectorof Technology. TheDistrictisalsooneofthefewdistrictswithoutaprivatefibernetworkownershipofthe networkisnottheissuebutrather,itsthebandwidthavailability. PlanteMoransrecommendationsincludedthefollowing(again,verbatimfromtheirreport): 1. EstablishafulltimeDirectorofTechnologytooverseeallareasoftechnology. TheDistrictneedsaleaderwhocandevotesignificanttimeandefforttointegrating technologyintoteachingandlearning. 2. Undertakeastrategictechnologyplanningprocess. Theplanningprocessshouldbeginwiththevisionfortechnologyusefollowedbythe developmentofstrategiestoachievethatvision.Keytopicstobeaddressedintheplanning effortinclude:Vision,Strategies,Budget(likelyresultinginabondtofund),Priorities, Professionaldevelopmentneeds 3. AddresstheperformanceissuesassociatedwiththecurrentWideAreaNetworkintermof connectivitybetweentheDistrictandWayneRESA

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AFrameworktoAddresstheTechnologyGapintheGrossePointePublicSchool SystemAFinancialApproachnotDependentonaBond

WhathashappenedsincethePlanteMoranReport?
Thefollowinghasoccurredsincethisreportwasdelivered: 1. TechnologyDirector:ThedistrictemploysSteveWoloszynwhosetitleisTechnologyDirector.I donotrecallwhenhewashiredorifhisrolefulfillstherecommendation.Thedescriptionabove seemstorecommendmoreofanedtechpersonthansomeonewholooksafterdistrict technology.Inotherwords,thismaystillbeanopenitem. 2. NetworkCapacity:ThedistrictupgradeditsWideAreaNetworkcapacityinFebruary2013from the100Mbpscapacitytoa1GbpscapacitynetworkusingafiveyearcontractwithComcasta 10xincreaseinnetworkcapacity. 3. Wireless:WiFiexistsinpocketsaroundthedistrict,buttheTechBondstudyandRFQindicates moreinvestmentisneeded. 4. InternetConnectivity:TheissuesbetweenGPPSSandtheInternetconnectionfromWayne RESAwerealsoaddressedandoptionsprobablyexisttoupgradetheInternetcircuitifneedbeat relativelylowcost. 5. PCsandWorkstations:Thedistricthasnotupgradeditsagingworkstations.Thiswouldhave beenaddressedbythebondandnowmustbeaddressedintheGeneralFund. 6. PlanningProcess:Thedistrictundertookatechnologyplanningprocess,tosomeextent,byvirtue ofthebondplanningRFQ.Thisstudywas,however,designedontheassumptionthatall investmentswouldbefundedbyabond. ThedeltabetweenthePlanteMoranstudyandtheTechBondRFQindicatesthatothernetwork infrastructureneedsinvestmentnamelyservers,switches,routers,andstorage.ThefailedTechBond proposalwentfarbeyondthePlanteMoranbasics. ThistablesummarizestheFebruarybondproposalof$50.3million(allfiguresin$000s).
Category Desktops,Laptops TabletsorChromebooks ClassroomA/VEnhancements NaturalGasPowerGenerators NetworkOutletsinBuildings PC/DeviceManagement VideoSurveillanceSystem NetworkSwitchesatSchools MediaLabConstruction CardReadersandLocks BuildingWiFiAccess DefeatedBond ProposalCosts Category DefeatedBond ProposalCosts

$9,847.00 BackupPowerSupplies $7,097.00 TelephoneSystem $7,004.00 Storage $3,644.00 PrivateFiberNetwork $2,995.00 CentralSwitchesandFirewalls $2,766.00 DigitalMediaSystem $2,549.00 ProfessionalServices $1,939.00 PowerConditioning $1,843.00 Servers $1,508.00 ManagementSystems $1,491.00 ServerRoomCooling

$1,446.00 $1,099.00 $907.00 $862.00 $828.00 $759.00 $500.00 $480.00 $381.00 $205.00 $126.00

Itsimportanttonotethatmanyofthefiguresabovereflectaninitialpurchaseandareplacementpurchase. ThisistrueofthePCs,tablets,andelementsoftheserverandWificomponents.Whenmovingtoa financialmodelthattakesafouryearviewandcreatesbudgetcapacityintheGeneralFund,theequivalent tenyearvalueisactually2.5times. Forexample,inthedatamodelbelow,ifthedistrictcancreate$9millioninafouryearwindow,thatislike $22.5millionhaditrelieduponafinancialmodelsimilartothedefeatedbond.

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AFrameworktoAddresstheTechnologyGapintheGrossePointePublicSchool SystemAFinancialApproachnotDependentonaBond

Elementsofanewplan
Thedistrictbudgetclearlydoesnotsupport$50.3millioninincreasedspending.TheGrossePointe taxpayersroundlyrejectedraisingtaxrates(atleasttotheproposedlevel)toexecutethisplan. Inanefforttoaddressthedistrictsmostpressingneeds,mainlyasidentifiedbyPlanteMoranandusing ensuingstudies,hereisoneoption(allfiguresin000s). Proposedfor Financingoutof GeneralFund Proposedfor Financingoutof SinkingFund

Category

Desktops,Laptops,Student ComputingDevicesand ManagementSoftware NetworkOutletsinBuildings NetworkSwitchesatSchools TelephoneSystem Storage CentralSwitches/Firewalls Servers BuildingWiFiAccess TOTAL EstimatedFinancingCosts TotalAmountNeeded

$3,200.00 $748.75 $969.50 $1,099.00 $907.00 $828.00 $381.00 $8,133.25 $420.00 $8,553.25

Comments Leaseaappropriate combinationofPCs,thin clients,laptops,tablets, Chromebooksandnecessary managementsoftware Reducednumberrequired Reducednumberrequired Sameasbondproposal Sameasbondproposal Sameasbondproposal Sameasbondproposal $1,291.00 Sameasbondproposal $1,291.00 Subtotal Assumesa4yearlease $1,291.00 GrandTotal

SummaryandExplanations: 1. Priorityhastobegiventoareasofmostpressingneed.ThecombinationofthePlanteMoranstudy, theTechBondRFQ,andthemostfrequentbondadvocateargumentsinformtheaboveframework. 2. ThenumberofdevicesisreducedrelativetotheFebruarybondproposal,butthisbecomesamore manageablenumberandthedistrictavoidsfinancingtechnologyfarbeyonditsusefullife. 3. Thenumberofdevicesisalsolowerthanthebondproposalbecausetherewouldnotbearefresh withinthefouryearbudgetview,butthebudgetwouldexistintheensuingfouryearstorefreshthis fleetofdeviceswiththenmorecurrenttechnology. a. Onescenariotoconsider:$3.2Mwouldfundacombinationof1,400PCs,1,300tablets, 2,000Chromebooks(atotalof4,700devices)andleaveover$350kformanagement software.Thatisaratioof2.0studentsperdevice. 4. WhilethefiguresintheproposalforGeneralandSinkingFundspendingplanscorrelatetothe defeatedtechbond,thenumbersarebudgetary. Newanalysisforeachlineitemisnowrequiredbecauseleasingandmanagedservices(suchascloud services)becomeanewoptionwhenavotedbondisnotthefundingmechanism.Forbudgetingpurposes though,thepreviousanalysisoffersareasonablebudgetforplanningpurposesagainwiththegoalofhelping allstakeholdersagreethattheneededtechinvestmentscanbemadestartinginthe201415budget/school yearwithoutdependenceonabondvote.
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AFrameworktoAddresstheTechnologyGapintheGrossePointePublicSchool SystemAFinancialApproachnotDependentonaBond

FundingtheNecessitieswithoutaBond
Thequestionthenbecomes,howcanthedistrictfinanceroughly$9.8millionwithoutabond?Hereisa reasonablescenario. 4YearTotal ($sin000s) $2,689.20 $1,935.00 $2,500.00 $1,500.00 $8,624.20 $972.00 TBD

RevenueIncrease/ExpenseDecreasePossibilities: 4yearsstartinginthe201415BudgetYearthrough201718 Proposed$83/pupilincreaseinFoundationAllowance(Gov.Snydersproposal) GPPSSEnergyBondPaymentsEndinMay2015($675k/year) Find5%budgetefficienciesincurrent$12.5MVariableExpensespend EngageGPFPEfor$375kannuallyfortechfundraisingcampaign SUBTOTAL ContingencyPlanOptions Meetfullperformancefundingminimums($100/pupilvs.current$70/pupil) OtherGrantorBestPracticesOpportunities

SummaryandExplanations: 1. TheSnyderadministrationhasalreadyproposedaFoundationAllowanceincreaseforMichigan publicSchoolsincluding$83moreperpupilinGPPSS.LastyeartheSchoolAidBudgetwas signedbythegovernoronJune13th,SignslookfavorableforGov.Snydertogetwhathehas proposed.TheSchoolAidFundBudgetshouldbecompleteinadvanceofGPPSS201415budget approvalandthusthisframeworkcouldbeadopted. 2. ThelastEnergyBondpaymentof$675,000annuallywillbemadeinMay2015.Threeofthelast fouryearscouldrepurposethatexpensetotechnologyinvestment. 3. Thesamelongtime10%targetremainsineffectandachievable. 4. ThedistrictsVariableCost(nonhumanresources)is$12.5millionannually.Examplesinclude LegalFeesat$400,000annuallywhen,inthepast,theyvebeenaslowas$200,000.Wespend $350,000onlicensedsoftware,muchofitwithMicrosoft.Exploringmanagedservicesandcloud optionssuchasGoogleAppsforEducationcouldyieldtremendouscostandefficiencygains.A5% reductioninthisspendisabout$625,000annually.Legalfeeandsoftwarelicensingcostsreduction alonecouldaccountforhalfofthat.Thisshouldnotbeahardtarget.. 5. TheGrossePointeFoundationforPublicEducationhasbeenastrongpartner.Withthebroadbase ofsupportfortechimprovements,acampaignthatyieldedjust$375,000annuallyforfouryears seemsverypractical. 6. Iftheeconomicsofthisplanheld,thedistrictcouldfundaseniortechnologyleaderiftheydonot believethecurrentpersonnelmeetthePlanteMoransuggestion. 7. AsfortheSinkingFund,obviouslytheWiFicomponentiscriticalandpendingmoredetailed technicalreview,perhapsitismorecriticalthansomeoftheotherelementsproposedheretobe fundedoutoftheGeneralFund.AlsorecallthatWiFicanbeincrementallyachieved.Again,more discussionandanalysisneeded.WiththeelectioninNovember,thiswouldneedtobesequenced appropriately.

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AFrameworktoAddresstheTechnologyGapintheGrossePointePublicSchool SystemAFinancialApproachnotDependentonaBond

DataTableinBMUFormatReflectingProposedFramework
DirectCompensation HealthCareExpenseGross HealthCareContributions MPSERSExpense FICAExpense TotalOtherVariableExpenses NewTechnologySpend 5%ReductioninVariableExp. GeneralFundExpenditures EnergyBondPayment +$83/PupilFoundationAllowance GPFPETechCampaign GeneralFundRevenues NetAnnualOperatingSurplus EndingFundEquityAmount EndingFundEquity% 201314 201415 201516 201617 201718 Comments $54.30 $54.40 $54.80 $55.20 $55.60 Needvalidationfor16/1717/18 11.2 11.3 11.3 11.3 11.3 $1.60 $1.70 $1.70 $1.70 $1.70 $13.30 $13.30 $13.50 $13.55 $13.65 CorrelatedtoDirectComp. $4.00 $4.00 $4.00 $4.10 $4.10 $12.60 $12.50 $12.50 $12.50 $12.50 $2.13 $2.13 $2.13 $2.13 Totalsto$8.6M $0.63 $0.63 $0.63 $0.63 Totalsto$2.5M $93.80 $95.30 $95.90 $96.45 $96.95 $0.68 $0.68 $0.67 $0.67 $0.67 $0.67 Totalsto$2.7M $0.38 $0.38 $0.38 $0.38 Totalsto$1.5M $96.80 $97.55 $97.55 $97.55 $97.55 $3.00 $1.57 $1.65 $1.09 $0.60 $4.30 $6.40 $8.05 $9.14 $9.73 4.51% 6.72% 8.39% 9.47% 10.04% ReflectsallRevenue/Expenses

Conclusion
Thisdocumentoffersaframeworkfordiscussionthatindicatesoptionsexisttoaddressthedistrictsmost pressingtechnologyneedswithoutrelyingonanothertaxincreaseproposalinthewakeoftheoverwhelming defeatofthepreviousproposal. Theplanhascleardependencies,namely: 1. TheconclusionofaSchoolAidFundBudgetthatdeliversonGov.Snyderspromiseofan$83per pupilincreaseforGPPSS.ThisshouldbeknownbytheendofMayandinlawbymidJuneallin timefor201415budgetapproval. 2. GPPSSbudgetanalysisthatcanyield$630,000inannualexpensereduction.Thisisjust0.5%of thedistrictsaggregatespendand5%ofthedistrictsvariableexpenditure.Thisshouldbe abundantlyachievable. 3. DialogwiththeGPFPEtogaintheirinterestandvalidatetheirabilitytomakeafouryearpledgeof $1.5M. 4. Analysisandagreementonthedistrictsmostprioritizedtechnologyneedsandafarmoredetailed costandacquisitionanalysisnowthatleasingandmanagedserviceoptionsareavailable. Thisshouldnotbeinterpretedafinalandcompleteplan,butratheraframework.Thisframeworkshouldbe evaluatedinthecontextofavailableandpracticaloptionsaswellastheneedsofourstudentsandstaff.A votedbondhasbeenrejectedandtimingandriskofthatsameapproachisnotadvisable.Thisisa frameworkthat,pendingitsdependencies,couldbeacteduponwithinthreemonths.

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