1

Overview of Fiscal Year 2011-12Oakland Schools Proposed Budgets

2

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 2008 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

3Dollars in millions

4

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

5

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.

6

Oakland SchoolsTotal Revenue Summary

Dollars in millions

FY 2012 $271.4 Million

7

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

Operating Revenue per County-wide per pupil count

8

$1,240

9

Operating Revenue per County-wide per pupil count

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

10

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

11

Difference between Revenue & Expenditures

Total Difference: $12.3 Million

Capital Projects Funds $(3.5M) Debt Service payments $(8.8M)

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

13

Noteworthy Changes:

• Increased year to year “Back to School” program support• Shifted existing resources to priority services (Grants, SQ)

• Medicaid – increased distribution & reduced fee (For 6 years)

• Continue to subsidize ONE Network fees• Funding supporting Common Core Standards project• CFE-Regional Program Relief Funds – Only 2 years, ending in

FY 2013 ($1.6M for FY 2012 & FY 2013)

• Increased Production Print & Graphics capacity in order to serve more clients and maintain pricing & no operating subsidy

• Qualified School Construction Bond – projects that benefit the ONE Fund

14

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

15

Note:Reduction of (87.98) FTE from FY 2010Reduction of (8.48) FTE from FY 2011

16

Budget Highlights

Non-union salary & wages:

January 2011 we changed health care provider & loweredexpected premium by 16.8%

A wage freeze was implemented on January 1, 2010 forNon-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.

17

Budget Highlights

Union salary & wages:

The OSTCEA and the Board of Education have a one yearextension on the existing contract, expiring June 30, 2011.

The contract includes a wage freeze implemented on July 1, 2010.

3 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.

18

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

19

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

20Dollars in millions

General Fund Overview

21

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

22

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: $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

23

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%

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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

25

General Education Fund

Questions & Comments

26

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

27

Special Education Fund Overview

*FY 2004 contains “one time” operating adjustment for prior years **Dollars in millions

28

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

29 Dollars in millions

Oakland Schools Special Education Expenditure Budget Comparison

30

PA-18 Base Distribution FY 2003-2016

Dollars in millions

Trend Line: RedAfter Property Tax Decline: Blue

31

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.8) $ 2.6MFund Balance Protocol Target: $ 3.415 Million

32

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%

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Special Education Fund

Questions & Comments

34

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

35

Career Focused EducationFund Overview

Dollars in millions

36

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

37

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%

38

Career Focused Education Fund

Questions & Comments

39

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)

40

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

41

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)

42

Questions & Comments