Tag Archives: budget planning

2010-11 GPPSS School Year Budget Approved

The 2010-11 Grosse Pointe Public School System budget approved last night consumed hour upon hour of work and analysis to enable us to continue to deliver the high quality programs we have come to expect.  While intensely difficult and painful at times, this budget and other financial achievements in 2009-10 will pay dividends for years to come.

Last night the Board of Education approved by a 5-2 margin the 2010-11 budget.  Having participated in or observed GPPSS budget developments for the last six years, I can say with certainty that this budget cycle was by far the most difficult – arguably in the history of the district.  Never before has the district had to cope with such mid-year cuts as we experienced in 2009-10 (an issue that needed to be permanently addressed in the 2010-11 budget) and never has the district needed to bridge a projected shortfall of over $7,000,000.

Such a difficult exercise required that we approach the budget like we have never done before.  We started in earnest nearly a year ago, in August, when we had a sense of the enormity of the challenge.  The data gathering and analysis started earlier and in greater detail than had ever been done before.  We utilized the zero-based budgeting model, which forced us to evaluate every investment we made. 

We published the initial draft of a complete budget in February, allowing residents and other stakeholders the earliest view it had ever had for an ensuing year’s budget.  The feedback we received, amidst a flurry of ever-changing variables, drove five complete revisions of the budget, published and discussed every month from February through June.

The 2010-11 Approved Budget Overview provides a healthy summary of what was approved last night.  The format of these overviews was also a new development for this year in an effort to translate the budget numbers into information meaningful to our residents – such as class size projections and program offerings.  It also cataloged the changes in the five iterations of the budget, reflecting the feedback we received throughout.

In order to put the 2010-11 budget into context, last night I also presented the next installment in the series I developed last summer the GPPSS Financial Transparency Series_2009-10 Year in Review.  It summarizes our financial accomplishments for the 2009-10 budget year and places into historical context the key financial metrics of the 2010-11 budget, such as enrollment, staffing levels, and tax revenues.  Here are some of the highlights from 2009-10:

  • Published the 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.
  • Approved a district-wide no fee All Day Kindergarten program, an offering that is already proving to boost enrollment.
  • 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 a 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.

Between the budget accomplishments of 2009-10, the budget of 2010-11 and the contract settlements, the 2011-12 school year budget is already practically completed.  While never particularly enjoyable over the course of this year, what we accomplished financially in 2009-10 will deliver educational and financial benefits for years to come.

Advertisements

Leave a comment

Filed under Current Events, GPPS Budget Decisions, GPPS Finances

It’s Time GPPSS Moved Forward With No-Fee All Day Kindergarten

A loophole in how Michigan distributes per pupil revenue has long allowed public schools to get twice what they really deserved for half-day kindergarten students.  But charging for extended day kindergarten amounts to taxing residents twice.  For this and other reasons I am advocating a district-wide switch to a no-fee All Day Kindergarten program for 2010-11.

In my last post and at the Board of Education meeting on January 25th I spent a great deal of time emphasizing that Michigan public schools derive their revenue on a per pupil basis.  The per pupil funding is known as the Foundation Allowance.  The Foundation Allowance does not distinguish between between a half-day student and a regular, full-day student.  This has been a pretty good deal for school districts.

Why?  Simple.  If we receive full per pupil funding for half-day kindergarten students it means that we essentially educate them at half the cost of most of our other students.  This is good for the district and, arguably, the other district services subsidized by the business model.

But it’s not so good if you are among the ever growing group of families who prefer their son or daughter go for more than half a day of kindergarten.  In response to this demand school districts have created programs called Extended Day Kindergarten (EDK).  But many districts, including GPPSS, charge a fee for EDK.

Continue reading

3 Comments

Filed under Current Events, GPPS Academics, GPPS Budget Decisions, GPPS Policy, Meeting or Agenda Announcement

2010-11 GPPSS Budget Development: Background, Process and Timeline

The 2010-11 Grosse Pointe Public School System budget will present perhaps the most difficult challenge to the district in its history.  Approaching such a problem with stakes as high as they are will require careful planning, collaboration, and deliberation.  Above all else, it requires an understanding of the dynamics that contribute to the current economic distress.

Last night’s Board of Education meeting was the first official Regular Meeting of the Board of Education of 2010.  I am honered to have been voted by my peers to serve in the role of treasurer, but at the same time I know that the task and responsibility of the position could not be any greater than they are right now.

Having spent the last 4 and a half years on the school board, and over a year before that, educating myself on the economic factors at play for our district and all those across the state of Michigan, I approach this daunting task with a great deal of confidence and resolve.  The trite phrase is “Knowledge is Power,” but knowledge is impotent if not leveraged.  The more people who have knowledge and choose to leverage it, the better off we will all be.  My strategy will be to continue to accumulate knowledge and leverage it to the greatest extent to solve our problems.

In that context I continue to invest substantial amounts of my own time making financial information accessible – meaning not just available, but simple to understand – for as many people as possible.  That is why this blog exists.  That is why I created the Financial Transparency Series and many other tools and reports available both on this blog and on the district’s web site.

Last night I delivered the presentation below to introduce the 2010-11 Budget Development Process, but more importantly the economic backdrop to that process.  It represents an abstract of the entire Financial Transparency Series.  I welcome your questions and feedback – so much so that I announced last night I will make myself available to present to any group across the district that has an interest in the finances of the Grosse Pointe Public School System.  So if you are a part of a PTO, athletic or performing arts booster group, or any other community group please take me up on my offer. I will be there.

The actual Resolution codifying the 2010-11 Budget Development Parameters can be found here.

I am a great fan of the Citizens Research Council of Michigan, a non-partisan policy think-tank specializing in Michigan governmental affairs.  Their motto is “The right to criticize government is also an obligation to know what you are talking about.”  I take that to heart and hope everyone else does as well.  So please consume these materials so you can contribute constructively to the solutions we need.

Leave a comment

Filed under Current Events, GPPS Budget Decisions, GPPS Finances

School Employee Retirement Costs and the House of the Rising Sun

Most people know by now that Lansing is by far the most significant source of school district funding.  Lansing is also the unilateral source of our second largest expense – employee retirement costs.  Lansing sets the rates and we pay the bill – a financially lethal combination that puts local school boards in an unenviable predicament.

Last Monday, January 11th, the Grosse Pointe Public Schools Board of Education had a marathon budget planning Work Session that could best be described as miserable.  My personal projection is that we will unfortunately have to terminate the employment of over 60 district employees – all of them good people who add value to our mission and who are valued in return.  But we cannot ignore our economic reality.  The cuts are coming – hard and fast.

graphWe collectively stare down the barrel of our most daunting projected budget shortfall in the history of the district, brought about equally by Lansing’s wretched policy making combined with a Depression-level state economy.

I cannot repeat enough that Lansing is the largest source of funding for every public school system in the state of Michigan.  Lansing controls our per pupil revenue.  Lansing has cut our per pupil revenue this year resulting in the loss of $3,000,000 and is making plans now for cuts next year that will result in the loss of another $2,200,000.  Meanwhile salaries and health care costs rise and student population is shrinking.  This is the financial stew that is our sustenance.

The focus in this post is another ever increasing cost which, after salary, is our second largest expense – employee retiree health and pension costs – referred to as the Michigan Public School Retirement Systems, MPSERS.  Lansing unilaterally controls the rate of this expense.  To put this in perspective, if we receive roughly $10,000 per pupil for school funding, nearly $1,300 of it goes to employee retirement.

Continue reading

14 Comments

Filed under Current Events, GPPS Budget Decisions, State of Michigan Finances