2012-13 F INANCIAL STATE OF THE DISTRICT
P R E PA R E D B Y: B R E N D A N WA L S H , T R E A S U R E R , B O A R D O F E D U C AT I O N
N O V E M B E R 2 6 , 2 0 1 2
Grosse Pointe Public School System Financial Transparency Series
Key General Concepts
Source Data
Michigan Dept. of Education, Bulletin
1014
GPPSS Budget Modeling Utility
2008 through 2011 agrees to audit. 2012
and on are projections.
Compensation
Direct compensation is salary and any
additional payments made to employees, governed by contract
Indirect compensation is net health care, FICA
and state mandated retirement (MPSERS)
School Funding
State dictates per pupil operating revenue
Health care is negotiated locally, but
state laws affect
Retirement rate (MPSERS) and FICA are non-negotiable locally.
2
Employee contracts – Key Concepts
Theme & Intent Emphasizes total
compensation rather than just direct compensation
Shares risk and reward proportionally across all
employees
Ties total compensation to school funding variables
beyond our control
Triggers & Effect
Agreement with employees that a 10% Fund Equity level
is necessary
If Fund Equity drops below 10%, compensation is
reduced proportionally.
If Fund Equity exceeds 15%, compensation increases
Implications & Benefit
The district’s financial health is protected by the contracts not Fund Equity
itself
Allows the district to make investment decisions guided
first by best interests of students, not compensation
or budgets
3
GPPSS and statewide proportional investment by function 4
47.4%
55.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Basic Instruction Added NeedsInstruction
InstructionalSupport
Business &Admin.
Operation Maint. Transport.
Statewide Avg. GPPSS
(Source: Michigan Dept. of Education)
5
Per Pupil GPPSS Statewide Rank
2004 2011 2004
(of 744) 2011
(of 788) Enrollment 8,915 8,391 32 29
Operating Revenues Local $ 3,087 $ 3,362 82 114 State $ 7,524 $ 7,728 23 84 Federal $ 212 $ 557 555 655
Total $ 11,028 $ 11,647 42 76
Expenditures*
Basic Instruction $ 5,658 $ 6,507 28 33 Added Needs Instruction $ 1,033 $ 1,453 218 160
Instructional Support $ 1,014 $ 1,371 86 56 Administration $ 1,160 $ 1,294 300 470 Operations & Maintenance $ 1,458 $ 1,125 91 206 Transportation $ 45 $ 76 571 608
Total $ 11,043 $ 12,012 42 62
Revenues less Expenditures ($ 15) ($ 365)
Per Pupil Revenue and Expenses from 2004 to 2011
(Source: Michigan Dept. of Education)
*Not all expenses are listed, but total is complete
6
GPPSS Statewide Rank
2004 2011 2004
(of 744) 2011
(of 788)
Total Operating Revenue per Pupil $ 11,028 $ 11,647 42 76
Instructional Salaries per Pupil $ 6,536 $ 7,448 18 26
Support Services Salaries per Pupil $ 2,645 $ 2,918 90 60
Average Teacher Salary $ 66,799 $ 80,566 7 5
Combined Retirement and FICA Rate 20.64% 28.1%
General Education Pupil to Teacher Ratio
Statewide Average 22.0 23.0
GPPSS Average and Statewide Rank 18 20 144 211
GPPSS Rank among same sized districts (47 total) 3 3
Good news, bad news story of salary compensation and pupil to teacher ratios
In 2010, the 76th ranked teacher salary in Michigan was $67,380 (Lakeshore Schools) which is 16% lower than our $80,566 average.
(Source: Michigan Dept. of Education)
Total Revenue and Expenses per Pupil
$10,000
$10,500
$11,000
$11,500
$12,000
$12,500
$13,000
2008 2009 2010 2011 2012 2013 2014 2015
Total Expenditures Per Pupil Total Revenue Per Pupil
7
$107
$96 $2.0
($0.1)
($3.2) ($3.1)
($7.6)
($3.9)
$5.0
$6.9
($10.0)
($8.0)
($6.0)
($4.0)
($2.0)
$0.0
$2.0
$4.0
$6.0
$8.0
$80.0
$85.0
$90.0
$95.0
$100.0
$105.0
$110.0
2008 2009 2010 2011 2012 2013 2014 2015
An
nu
al D
elt
a in
Mill
ion
s
An
nu
al R
ev. ,
Exp
. in
Mill
ion
s
Total Revenue Total Expenses Annual Delta
General Fund Annual Revenue and Expenses 8
Projected Total compensation by employment group as percentage of total General Fund expenditure
65.7% 66.1% 66.8%
4.0% 4.1% 4.2% 4.4% 4.6% 4.6% 3.1% 3.0% 3.1% 5.5% 5.2% 5.4%
50.0%
55.0%
60.0%
65.0%
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
2012 2013 2014
Technology
Exec Admin
NIS
Parapros
TA's
Clerical
Plant
Bldg Admin
Teachers
9
Ratio of Employees to Blended Student Enrollment 8% workforce reduction from 2008 through 2012
14.2 13.8 14.1 14.3 14.3 14.3 14.3 14.3
24.7 23.4
24.4
26.2 26.0 26.1 25.8 26.5
7,800
7,900
8,000
8,100
8,200
8,300
8,400
8,500
8,600
8,700
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
26.0
28.0
30.0
2008 2009 2010 2011 2012 2013 2014 2015
Stu
de
nt
Enro
llme
nt
Rat
io o
f Em
plo
yee
s to
Stu
de
nts
Student to Teacher Ratio Student to Non-Teacher Ratio Enrollment
10
Includes General and Special Education Teachers
General Fund Equity total value and as % of General Fund Expenditures
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
$0
$5,000
$10,000
$15,000
$20,000
$25,000
2008 2009 2010 2011 2012 2013 2014 2015
Fun
d E
qu
ity
as %
of
Exp
en
dit
ure
s
Fun
d E
qu
ity
(in
$0
00
’s)
Value % of Expenditures
11
Cost represented on Per Pupil basis by Category Small margin of expense over revenue is amplified by student count
$7.4 $7.8 $7.7 $7.2 $7.4 $7.1 $6.5 $6.3
$1.2 $1.2 $1.2
$1.2 $1.2 $1.2 $1.1 $1.1
$1.8 $1.9 $1.9
$2.0 $2.4 $2.3 $2.1 $2.0
$1.7 $1.6 $1.7 $1.9
$1.7 $1.6
$1.5 $1.5
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
2008 2009 2010 2011 2012 2013 2014 2015
Pe
r P
up
il ($
00
0’s
)
Direct Comp. Health Care Retirement/FICA All Other Revenue/Pupil
12
Major expenses per pupil as a % of revenue per pupil Retirement cost escalation is clearly our biggest problem
60% 62% 63% 60% 63% 60% 55% 53%
9% 10% 10% 10% 10% 10% 9% 9%
15% 15% 15% 17% 20% 20%
17% 17%
14% 13% 14% 16% 15% 13%
13% 13%
0%
20%
40%
60%
80%
100%
2008 2009 2010 2011 2012 2013 2014 2015
Direct Compensation Health Care MPSERS/FICA Other
13
Retirement costs are a function of state set rate applied to salaries. Salary reduction is only way to reduce retirement costs.
Average total compensation per employee and average total compensation per employee % change from 2008
$67.3 $68.0 $68.7 $66.9 $68.4 $66.0 $60.0 $58.9
$16.4 $16.4 $16.9 $18.5 $21.7 $21.5 $19.0 $18.7
0% 0.9%
2.3% 2.1%
7.3%
4.9%
-5.8%
-7.2% -8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
2008 2009 2010 2011 2012 2013 2014 2015
Dif
fere
nce
fro
m 2
00
8 b
ase
line
Avg
. To
tal C
om
pe
nsa
tio
n in
Th
ou
san
ds
Direct Comp. Health Care MPSERS/FICA Change from 2008
14
Change in per pupil revenue vs. change in average total compensation per employee against 2008 baseline
-2.1%
-3.8%
-4.9% -4.8% -4.8% -4.8%
2.3% 2.1%
7.3%
4.9%
-5.8%
-7.2%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
2009 2010 2011 2012 2013 2014 2015
Revenue/Pupil Avg. Total Compensation
15
Potential Employee Compensation Changes in the Context of our Communities' Changing Economy
16
Change in Median Household Income
(2000 to 2010)
Change in Per Capita Income
(2000 to 2010)
Grosse Pointe City -15.7% -30.9%
Grosse Pointe Farms -18.2% -16.5%
Grosse Pointe Park -7.8% -17.8%
Grosse Pointe Shores -18.0% -10.5%
Grosse Pointe Woods -16.4% -19.7%
Harper Woods -26.8% -32.1%
Source: U.S. Census Bureau, American Community Survey via Southeast Michigan Council of Governments (SEMCOG, www.semcog.org)
GPPSS: Striking the right balance 17
Current Path
Salaries scale proportionally to revenue
No change in student to teacher ratio
10% projected reduction in direct compensation over three years
Grosse Pointe Public Schools operates at a structural surplus
Without…
Large class sizes
Reduced programming
Outsourced custodians
Higher student fees
Schools of Choice
We should still investigate other options 18
• GPPSS loss of students is out of alignment with like districts, even those not reliant on School of Choice. Enrollment
• GPPSS cost per pupil rising dramatically higher/faster than benchmark and state average.
Added Needs Instructional Costs
• GPPSS dramatically out of alignment; salaries, ratios/schedules, programs should be evaluated
Basic Instructional Costs
• Currently this is a $1M annual expense. There has got to be a better way.
Staff Development / Substitute Costs