Topics for Discussion

Legislative Update

School Aid Budget

Highlights of State of the StateImpact for Kalamazoo RESA Knowns and Unknowns

Employee Compensation and Benefit Changes

For Kalamazoo RESA 2013-2014 school year

Program Highlights and New Initiatives

Kalamazoo RESA

Snapshot: Michigan’s Economy

Modest growth in revenues

Surplus expected for 2013 & 2014 budget

One of the biggest pressures on the budget is the increased cost of MPSERS – we expect much of the surplus to be directed here.

Road funding debate could play a big part in the decision making which could effect revenues to schools – watch for tax policy changes

Unemployment rate has been steady at 8.5%

Modest gains in employment in the private sector but continued decline in the governmental sector

Positive growth in real estate and auto markets

Statewide estimate for wage and salary growth for FY 2014 is 0.8% With overall personal income projected to grow 1.9%

EAA

Possible ISD Role

Roads

Impact on School Aid Fund Budget

Common Core and SBAC

Uncertain future

Skunkworks project

Now assigned to MDE

School Aid Budget Process

Conference report draft issued May 23rd

Governor has set goal of June 1st for completion

Legislation to watch

Three varying versions:Executive, House, Senate

Major Factors:Foundation allowance $0-$100/pp for lowest funded districts ($30-60 in conference report)Equity payment - $0-$34/pp for lowest funded districts (up to $50 in conf rpt)80-100% funding for cyber schools (not included in conf rpt)Pupil Count Changes80/20, 80/20 current year, 90/10 current year, new online enrollment options(90/10 current year – conf rpt)Best Practices Language $0-$16/pp for LEAs ($52 conf rptPerformance $30/$30/$40)Consolidation of Services incentive grants eliminatedTechnology Readiness Grants$0-$50,0000,000 ($50 M conf rpt)

ISD State Aid Same as

2012-2013 with 0-3.2% if Best Practices met (3.2% in conf rpt)

GSRP various levels of Increased slots and per pupil allocation

MPSERS contribution rate 20.96%-24.79%Balance to be paid from 3% escrow fund and $150 million reserve fund

Continues transfers to community colleges and universities

Continues most categoricals at current year funding

Kalamazoo RESA’s strategy is to balance the budget through various approaches

State Budget: Proposal

General Fund Revenues No increase in taxable values No increase in State Aid (possible reduction) Grant changes – reductions and increases Reduction in Federal revenue due to Sequestration Changes made in Fee for Service Models

Special Education Revenues No increase in taxable values No or minimal increase in State Aid Reduction in Federal revenue due to Sequestration

KRESA Budget Highlights

Approved by the Board of Education on May 16

Average of 2% increase in salary schedules

Steps frozen for all employees

Add Step 25 to Grade 17 salary schedule to maintain competitiveness with local districts along with other market adjustments for interpreters, braillists,

Approved new salary schedule for technology positions and early childhood education positions

Commitment to moving to a Performance pay system for all employees vs. increases based on seniority. A study will be conducted during the 2013-2014 school year. The board is implementing this concept for Grades 21 and above for the 2013-2014 school year.

Total cost to the budget for all recommendations approved by the Board of Education - approximately $ 759,000

Kalamazoo RESA Compensation and Benefit Changes for 2013-2014

Health Insurance Plan decisions for current employees delayed until October 2013

Estimated 9% increase in employee health/dental/vision/life/long-term disability insurance January-June 2014 for budget purposes

Comparison to Cap unknown until Oct or Nov 2013

Affordable Health Care Reform – Next phase effective January 1, 2014KRESA’s measurement period will run from April 2013 – October 2013. Our administration period will be November and December of 2013 and our stabilization period will be January – December of 2014.

Implement Tier 2 benefit plan for all new hires as of July 1, 2013

Single subscriber coverage for Grades 9-12Reduced paid time away benefits

Costs: Health Insurance

Increased Compensation CostsWages – 2% raise = $ 393,061Market Adjustments = 41,028Retirement = $ 187,243Health Insurance = $ 178,565Other Benefit Costs = $ 38,898Increased Costs = $ 838,795

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Special Education fund budget projectionTotal Revenues = 36,382,729Total Expenditures = 36,382,729Excess/(Deficit) = -0-Unassigned Fund Balance = 700,000

2%Combined fund balance = 7%Reduction in $’s paid to LEAs = 4,769,026

General fund budget projectionTotal Revenues = 31,524,665Total Expenditures = 31,646,292Excess/(Deficit) = (121,627)Unassigned Fund Balance = 4,142,515

13%

State aid act?

Foundation allowance?

MPSERS reform?

Any Time, Any Place, Any Way, Any Pace initiatives

Still up in the air

Rebalancing budgets

Eliminating positions through attrition wherever possible

Pursuing more grant funding

Taking on new initiatives

Spending down fund balance

Cost Containment Strategies

What we’re doing

Early Childhood

Starting July 1, 2013 Kalamazoo RESA anticipates it will become the grantee for the Kalamazoo County Head Start program.

We will be hiring approximately 80-90 employees to staff 20 classrooms throughout the county and provide support services to students and families.

Kalamazoo RESA will also be operating the GSRP preschool programs in some of our districts next year

Education Reconnection

YOU is implementing a new program in collaboration with our local school districts to reconnect students who have left their educational programs to reconnect them into a program that will lead to a High School Diploma coupled with paid employment experience

Technology Consolidations and CollaborationsKalamazoo RESA will be managing and staffing the AAESA technology services.

Kalamazoo RESA will be managing and staffing Galesburg-Augusta technology services.

Kalamazoo RESA is providing IT Engineering services to Portage, Mattawan, VBISD, AAESA, and others.

The Learning Network’s Efforts to Outcomes

New Initiatives for 2013-2014

http://animoto.com/play/cBNlc84uniC1olH13hMhvA

Contact informationRon Fuller, Superintendent

(rfuller@kresa.org)

Holly Norman, Deputy Superintendent (hnorman@kresa.org)

Question & Answer