Presented April 23Presented April 23rdrd & 24 & 24thth , 2009 , 2009

for stakeholders in the for stakeholders in the Swartz Creek Community School DistrictSwartz Creek Community School District

SWARTZ CREEK SWARTZ CREEK COMMUNITY COMMUNITY

SCHOOLSSCHOOLS FINANCIAL FORUM FINANCIAL FORUM

Inform Board Members, Staff, & Community

PURPOSEPURPOSE

Budget for both near and long term goals

Encourage communication between Stakeholders of the Swartz Creek Community School District

Michigan School Districts’ Michigan School Districts’ Financial ChallengesFinancial Challenges

Enrollment IssuesGrowing Health Care CostsState Retirement Rate

FluctuationsFederal Stimulus Mandates

State and national economy concerns

PROBLEMPROBLEM

During the past 6 years only During the past 6 years only

1 school year (2006-07) did the 1 school year (2006-07) did the state aid percentage increasestate aid percentage increase

exceed the inflationary exceed the inflationary percentage increase.percentage increase.

DATA COMPARISONDATA COMPARISONFiscal Fiscal YearYear

2002-03 2002-03

Foundation Foundation Allowance Allowance IncreaseIncrease

+$140 (2%)+$140 (2%)

RetiremenRetirement Rate %t Rate %

ChangeChange

12.9912.99

Healthcare Healthcare Costs % Costs % increaseincrease

2003-042003-04 -$16 (-.24%)-$16 (-.24%) 12.9912.99 14.1314.13

2004-052004-05 +$76 +$76 (1.13%)(1.13%)

14.8714.87 1.921.92

2005-062005-06 ++$175(2.6%)$175(2.6%)

16.3416.34 9.569.56

2006-072006-07 +$210 +$210

(3.05%)(3.05%)

17.7417.74 3.143.14

2007-082007-08 +$119 +$119 (1.7%)(1.7%)

16.7216.72 12.4312.43

2008-092008-09 +$112 +$112 ProjectedProjected (1.5%)(1.5%)

16.5616.56 10 10 ProjectedProjected

Exert control over our spending

Improve communication & collaboration with stakeholders

Increase revenue

Attract new students

Reduce expenditures

What can we do to weather the storm?

EXPENDITURESHow we allocate resources

Expenditure Assumptions for 2008-09:

Diesel fuel costs rising from $226,763 to $260,000

Health insurance estimated 10% increase

Retirement rate projected 16.56% of gross wages from 16.72%

Utilities estimated 10% increase

2% pay increase for most employee groups

Audited figures for 2006-07Audited figures for 2006-07

REVENUE $34,007,675REVENUE $34,007,675EXPENDITURES $33,529,348EXPENDITURES $33,529,348REVENUE OVER/(UNDER) EXPENDITURESREVENUE OVER/(UNDER) EXPENDITURES $ 478,327 $ 478,3272006 FUND EQUITY 2006 FUND EQUITY $5,864,168$5,864,168

June 30, 2007 June 30, 2007 BalanceBalance $6,342,495$6,342,495 18.92 of expenditures 18.92 of expenditures

Audited figures for 2007-08Audited figures for 2007-08

REVENUE $34,240,115REVENUE $34,240,115

EXPENDITURES $34,521,560EXPENDITURES $34,521,560

REVENUE OVER/(UNDER) EXPENDITURESREVENUE OVER/(UNDER) EXPENDITURES $ $ (281,445)(281,445)

2007 FUND EQUITY 2007 FUND EQUITY $6,342,495$6,342,495

June 30, 2008 June 30, 2008

BalanceBalance $6,061,050$6,061,050 17.56% of expenditures 17.56% of expenditures

DueDue From State & Other Governmental From State & Other Governmental Units - General Fund as of June 30,Units - General Fund as of June 30,

$3,300,000

$3,600,000

$3,900,000

$4,200,000

$4,500,000

2004 2005 2006 2007 2008

DISTRICT REVENUEFiscal Year 2007-08

TOTAL: $34,240,114

State Aid $23,189,308

Local Sources $9,404,043

Federal Sources $1,273,508

Other Sources $373,255

Working DefinitionsWorking DefinitionsRevenues:Revenues:

Local SourcesLocal Sources: Property Taxes, Tax Penalties, Adult Ed. : Property Taxes, Tax Penalties, Adult Ed. Tuition/Fees, Bank Interest, Rentals Leases, United Way, Tuition/Fees, Bank Interest, Rentals Leases, United Way, Gifts, Community Ed. Funds, etc.Gifts, Community Ed. Funds, etc.

State SourcesState Sources: State Aid, Special Ed., Transportation, : State Aid, Special Ed., Transportation, Drivers Ed., Vocational Ed., Gifted/Talented, At-Risk, Adult Drivers Ed., Vocational Ed., Gifted/Talented, At-Risk, Adult Ed., etc.Ed., etc.

Federal SourcesFederal Sources: IDEA (Sp. Ed.), Grants, Title 1 & 2, Indian : IDEA (Sp. Ed.), Grants, Title 1 & 2, Indian Ed., JTPA, Eisenhower, etc.Ed., JTPA, Eisenhower, etc.

Other SourcesOther Sources: Act 18 (County Sp. Ed.), Sale of Assets, CDC : Act 18 (County Sp. Ed.), Sale of Assets, CDC & Café Reimbursement, etc.& Café Reimbursement, etc.

DISTRICT OPERATING EXPENDITURESFiscal Year 2007-08TOTAL: $34,521,560

Basic programs $17,929,431 Added needs $3,579,595

Support $3,516,188 Administration $2,713,156

Business $690,082 Operations $3,425,722

Transportation $1,518,930 Central Services $573,457

Transfers $574,997

Working Definitions: Working Definitions: ExpendituresExpenditures

INSTRUCTION:INSTRUCTION: Basic ProgramBasic Program: Insurances/Benefits (Health, Dental, Vision, LTD, Life, Retirement, FICA, : Insurances/Benefits (Health, Dental, Vision, LTD, Life, Retirement, FICA,

Unemployment, Workers Comp.) Classroom Teacher Salaries, Aides, Substitutes, Unemployment, Workers Comp.) Classroom Teacher Salaries, Aides, Substitutes, Teaching/Office Supply & Materials, Repairs, Travel, Capital Outlay (Furniture & Equipment), Teaching/Office Supply & Materials, Repairs, Travel, Capital Outlay (Furniture & Equipment), etc.etc.

Added Needs:Added Needs: Insurances/Benefits, Special Ed. Teachers (IDEA & Regular), Aides, At-Risk, Insurances/Benefits, Special Ed. Teachers (IDEA & Regular), Aides, At-Risk, Substitutes, Title 1 & 2, Vocational Ed., Indian Ed., Supplies/Materials, etc.Substitutes, Title 1 & 2, Vocational Ed., Indian Ed., Supplies/Materials, etc.

SUPPORT SERVICES:SUPPORT SERVICES: PupilPupil: Insurances/Benefits, Counselors, Psychologists, Speech Teachers, Substitutes, Special : Insurances/Benefits, Counselors, Psychologists, Speech Teachers, Substitutes, Special

Programs, Personnel, Graduation, etc.Programs, Personnel, Graduation, etc. Instruct. StaffInstruct. Staff: Insurances/Benefits, School Improvement, Textbooks, Librarians, Library : Insurances/Benefits, School Improvement, Textbooks, Librarians, Library

Supply/Material, Assistant Superintendent for Instruction, Special Ed. Director, Athletic Director, Supply/Material, Assistant Superintendent for Instruction, Special Ed. Director, Athletic Director, Secretaries, Substitutes, System capitol-Outlay, Eisenhower, etc.Secretaries, Substitutes, System capitol-Outlay, Eisenhower, etc.

General Admin:General Admin: Insurances/Benefits, Board Salaries, Legal Services, Audit Services, Insurances/Benefits, Board Salaries, Legal Services, Audit Services, Publications, Elections, Copy Materials, Dues/Fees, Superintendent, Supt. Secretary, etc.Publications, Elections, Copy Materials, Dues/Fees, Superintendent, Supt. Secretary, etc.

School Admin: Insurances/Benefits, Principals/Assistants, Building Secretaries, Travel, School Admin: Insurances/Benefits, Principals/Assistants, Building Secretaries, Travel, Dues/Fees, etc.Dues/Fees, etc.

Business:Business: Insurances/Benefits, Business Secretaries, Data Processing, Banking Charges, Insurances/Benefits, Business Secretaries, Data Processing, Banking Charges, Postage, System Insurances, Tax Processing, etc.Postage, System Insurances, Tax Processing, etc.

Oper. & Maint.:Oper. & Maint.: Insurances/Benefits, Food & Mail Drivers, Custodial, Skilled Trades, Overtime, Insurances/Benefits, Food & Mail Drivers, Custodial, Skilled Trades, Overtime, Substitutes, Utilities, Building Supply/Materials, etc.Substitutes, Utilities, Building Supply/Materials, etc.

Pupil Trans:Pupil Trans: Insurances/Benefits, Supervisor (1/2), Bus Drivers, Bus Trips, Shuttles, Secretaries, Insurances/Benefits, Supervisor (1/2), Bus Drivers, Bus Trips, Shuttles, Secretaries, Substitutes, Repair, Mechanics, Supply/Material, etc.Substitutes, Repair, Mechanics, Supply/Material, etc.

Central:Central: Insurances/Benefits, Assistant Super. Personnel, Switchboard Operator, Tech. Insurances/Benefits, Assistant Super. Personnel, Switchboard Operator, Tech. Coordinator, Warehouse, etc.Coordinator, Warehouse, etc.

Other:Other: Insurances/Benefits, Schedule B Activities (Coaches/Sponsors), etc. Insurances/Benefits, Schedule B Activities (Coaches/Sponsors), etc. Pupil Activities:Pupil Activities: Indian Ed., Insurances/benefits, Workers, Secretaries, Supply/Material, etc. Indian Ed., Insurances/benefits, Workers, Secretaries, Supply/Material, etc. Payments To Other Schools:Payments To Other Schools: GISD Telecommunications Classes, etc. GISD Telecommunications Classes, etc. Transfers:Transfers: General Fund Transfers to Community Education, Athletics and CDC General Fund Transfers to Community Education, Athletics and CDC

Projected 2008-09Projected 2008-09

REVENUE $34,212,341REVENUE $34,212,341EXPENDITURES $35,607,800EXPENDITURES $35,607,800REVENUE OVER/(UNDER) EXPENDITURESREVENUE OVER/(UNDER) EXPENDITURES $$(-1,395,459)(-1,395,459)2008 FUND EQUITY2008 FUND EQUITY $6,061,050$6,061,050

June 30, 2009 June 30, 2009 Projected BalanceProjected Balance $4,665,591$4,665,591

13.10% of expenditures 13.10% of expenditures

Other4%

Capital Outlay2%

Salaries & Benefits

86%

Other Expenses2%

Supplies & Materials

6%

Purchased Services

4%

General Fund ExpendituresGeneral Fund Expenditures

Dilemma for 2008-09 and Dilemma for 2008-09 and beyondbeyond

Revenues are not expected to increase for the Revenues are not expected to increase for the next two yearsnext two years

Expenditures are expected to rise more than Expenditures are expected to rise more than 3%3%

Is this an anomaly or long term trend? Is this an anomaly or long term trend?

Federal Stimulus Funds – Can they save us?Federal Stimulus Funds – Can they save us?

Blended Student EnrollmentBlended Student Enrollment

4,120 4,157 4,2174,238 4,259 4,238

4,170

2,500

2,700

2,900

3,100

3,300

3,500

3,700

3,900

4,100

4,300

4,500

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Projected 2009-10Projected 2009-10

REVENUE $34,554,464REVENUE $34,554,464

EXPENDITURES $36,607,034EXPENDITURES $36,607,034

REVENUE OVER/(UNDER) EXPENDITURESREVENUE OVER/(UNDER) EXPENDITURES $ $(-2,121,570)(-2,121,570)

Projected 2009 FUND EQUITY Projected 2009 FUND EQUITY $4,665,591$4,665,591

June 30, 2010 June 30, 2010 $2,544,021$2,544,021

Projected Balance Projected Balance 6.94% of expenditures 6.94% of expenditures

Projected 2010-11Projected 2010-11

REVENUE $34,902,029REVENUE $34,902,029EXPENDITURES $37,705,480EXPENDITURES $37,705,480REVENUE OVER/(UNDER) EXPENDITURESREVENUE OVER/(UNDER) EXPENDITURES $$(-2,803,451)(-2,803,451)Projected 2010 FUND EQUITY Projected 2010 FUND EQUITY

$2,444,021$2,444,021

June 30, 2011 June 30, 2011 $-359,430 $-359,430 Projected Balance Projected Balance

-1% of expenditures -1% of expenditures

Size and Scope of the BudgetSize and Scope of the Budget When all funds are added together the district is a When all funds are added together the district is a

one of the largest businesses in the area with one of the largest businesses in the area with revenues and expenditures exceeding $100,000 revenues and expenditures exceeding $100,000 each and every day….365 days per year.each and every day….365 days per year.

We are also one of the largest employers in the area We are also one of the largest employers in the area with over 500 employees that service our most with over 500 employees that service our most precious commodity.…our children.precious commodity.…our children.

Investment in our children is also in an investment Investment in our children is also in an investment in our community and the future of Michigan. It is in our community and the future of Michigan. It is important that all stakeholders understand the important that all stakeholders understand the importance and the responsibility of this importance and the responsibility of this investment.investment.

Challenges and PossibilitiesChallenges and Possibilities

We know that the near-term financial future is not We know that the near-term financial future is not looking good.looking good.

However, we as a district can meet this challenge…head However, we as a district can meet this challenge…head on. on.

Unlike Wall Street and other private businesses or Unlike Wall Street and other private businesses or industries we can determine our own future by not industries we can determine our own future by not shying away from creating financial choices.shying away from creating financial choices.

However we need to act soon as we are all in this However we need to act soon as we are all in this together.together.

What We Have Done Thus What We Have Done Thus FarFar

Reductions of support and custodial Reductions of support and custodial staffstaff

Reductions of Core Curriculum StaffReductions of Core Curriculum Staff Energy Conservation-lighting, heating,Energy Conservation-lighting, heating,

busing & software management busing & software management Mid-year supplies budget cutsMid-year supplies budget cuts Elimination of Drivers’ EducationElimination of Drivers’ Education Use of Fund EquityUse of Fund Equity Quarterly Board budget reviews Quarterly Board budget reviews

Future PlansFuture Plans Administrative staff reductions, other staffAdministrative staff reductions, other staff

reductions reductions Textbook budget reductionsTextbook budget reductions Reduction of subs for staff developmentReduction of subs for staff development Control of insurance and fringe benefitsControl of insurance and fringe benefits Reduce scheduled bus and technologyReduce scheduled bus and technology

purchases purchases Privatize Administrative ServicesPrivatize Administrative Services Reduce building supply budgetsReduce building supply budgets Athletic feesAthletic fees Increase class sizes and new class Increase class sizes and new class

configurationsconfigurations

Thank you for your time and for caring about the finances of

your school district, my school district…

OUR SCHOOL DISTRICT !!!

Questions & Comments