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Grosse Pointe Public School System

Financial Transparency Series

2009-10 FINANCIAL YEAR IN REVIEW AND


HISTORICAL FINANCIAL ANALYSIS

JUNE 28, 2010

P R E P A R E D B Y B R E N D A N W A L S H , B O A R D O F E D U C AT I O N T R E A S U R E R
Financial Accomplishments of 2009-10
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 Published multi-part Financial Transparency Series (PowerPoint narrated videos).
 Successfully integrated Budget Modeling Utility, Staff Utilization Utility, Financial Benchmark
and Health Care reports for financial analysis, budget planning, transparency, and contract
resolution.
 Voters renewed Hold Harmless and Sinking Fund millages by wide margins.
 Closed a $3MM mid-year structural revenue gap from Foundation Allowance and 20J
reduction. Project only a $1.2MM reliance on Fund Equity against budgeted $2.6MM.
 Completed the most transparent budget development process in history of the district –
earliest holistic budget and 5 versions presented, feedback comprehended in changes.
 2010-11 budget reduces taxes/fees by $785,000 for local taxpayers via all day kindergarten
fee elimination and lower foundation allowance revenues.
 2010-11 final budget and contract settlement avoided projected layoffs that would have
incurred an utterly wasteful $700,000 in unemployment costs.
 GPPSS has avoided school closings and other highly undesirable responses to budget
challenges – unlike many well-respected districts across the state.
 Reached agreement with teachers and administrators on 4 year contracts that substantially
mitigates risk of unpredictable enrollment, per pupil revenue, salary, retirement and health
care costs.
Financial Transparency Series - 2009-10 Year in Review
GPPSS School Per Pupil Foundation Allowance
Years of flat or nominal increases hit a low point in 2009-10
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$12,000

$11,500

$11,000

$10,500

$10,000

$9,500

$9,000

$8,500

$8,000

Real Dollars Nominal Dollars


Financial Transparency Series - 2009-10 Year in Review
10 Year History of General Fund Expenditures
2010 budget same as 2005; but 24% lower than 2001 in real dollars
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$120,000
$115,000
$110,000
Thousands

$105,000
$100,000
$95,000
$90,000
$85,000
$80,000

Real Dollars Nominal Dollars


Financial Transparency Series - 2009-10 Year in Review
Local Foundation Allowance Revenue (Per Pupil x Enrollment)
Combined Real Local Homestead & Non-Homestead Tax Revenue lower than 1999
5

$27,000
$25,700
$25,000
$23,100
$23,000
Thousands

$23,974
$22,836
$21,000

$19,000

$17,000
$17,962
$15,000

Real Dollars Nominal Dollars

Financial Transparency Series - 2009-10 Year in Review


Combined Local Homestead, Technology and Sinking Fund
In real dollars homeowner tax revenue is 25% less than high-water mark of 2004
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$25,000
$24,000
$24,000
$23,000
$22,000
Thousands

$21,000 $20,300
$20,000
$19,000
$18,000
$17,000 $18,153
$16,000
$16,319
$15,000

Real Dollars Nominal Dollars

Financial Transparency Series - 2009-10 Year in Review


GPPSS Student Enrollment – 1992 to 2011
Has been declining since 2004; but 2010-11 still 10% higher than 1992
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9,500
8,986
9,000

8,500

8,000 8,186

7,500
7,407
7,000

6,500

Financial Transparency Series - 2009-10 Year in Review


State of Michigan and GPPSS Student Enrollment
Year over year percentage change shows GPPSS’ correlates with state’s pattern
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3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%

GPPSS State of MI

Financial Transparency Series - 2009-10 Year in Review


GPPSS Teaching and Non-Teaching Staff Levels
In Proposal A era districts MUST scale staff to enrollment
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700 9,500
637
650
9,000
600
FTE Employees

550 8,500

Enrollment
500
432 8,000
450
400 7,500
350
7,000
300
250 6,500

Teachers Non-Teachers Enrollment


Financial Transparency Series - 2009-10 Year in Review
Ratio of Teaching and Non-Teaching Staff to Enrollment
Teacher ratio consistent; zero-based approach reduced non-teachers in 2010
10

30.0
28.0
Employees to Pupil Ratio

26.0 25.4 28.3

24.0
22.0
20.0
20.7
18.0
16.0 14.5 14.9 14.9
14.0
12.0

Pupils to Teachers Pupils to Non-Teachers


Financial Transparency Series - 2009-10 Year in Review
What Didn’t We Do in Face of Budget Challenge
MI districts have all had tough choices. Our decisions require context.
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Close Change high


Merge High
Elementary school bell
Schools
schools schedule

Substantially
Outsource Cut teachers
raise class
Custodian Staff mid-year
sizes

Raise Reduce Spend down


Extracurricular Performing Arts Fund Equity
Partic. Fees or Athletics (with no end game)

Financial Transparency Series - 2009-10 Year in Review


GPPSS 13 Year History of General Fund Equity
As state finances worsened conservative local budgeting was required
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$22,000 22.0%
Fund Equity in Thousands

$20,000 20.0%

$18,000 18.0%

$16,000 16.0%

$14,000 14.0%

$12,000 12.0%

$10,000 10.0%

Fund Equity Value Fund Equity % of Expenditures

Financial Transparency Series - 2009-10 Year in Review


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This was
Significance the missing
link. 1. State tax
of the new revenue linked to
contracts: state economy

5. New contracts 2. Foundation


Staff compensation link staff Allowance (FA)
was formerly compensation to linked to state tax
uncoupled to the FA, other variables revenues
very economic
system upon which it
should have been
primarily dependent.
The new contract 4. District staffing 3. Local district
fixes this. We now linked to revenues linked to
have a closed-loop enrollment FA and enrollment
system.

Financial Transparency Series - 2009-10 Year in Review


Summary
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 We are very well-positioned for the short and long-term


 Taxpayers enjoy reduced tax and fee burden while
benefitting from a high-performance district
 New contract structure enables innovative shared
risk/shared reward model – rapidly being emulated by
other districts (e.g. Ann Arbor, Farmington)
 New contract provides ability to leverage strong fund
equity position in a controlled fashion for student benefit
 Stable financial position, adjustable to variables beyond
local control, allows for primary focus on the educational
program, not finances
Financial Transparency Series - 2009-10 Year in Review