gppss 2010 financial state of the district

PUTTING THE 2009-10 FISCAL YEAR AUDIT INTO CONTEXT

NOVEMBER 22, 2010

B R E N D A N WA L S H , B O A R D O F E D U C AT I O N T R E A S U R E R

Grosse Pointe Public School System

Financial Transparency Series

Financial Transparency Series - 2009-10 Year in Review

2

What does the Audit tell us (among other things)?

Provides 3rd party validation of our financial condition and associated controlsEstablishes actual final numbers for the most recently closed financial year• As opposed to the adopted budget that

projects what the numbers should be


3

Why might an Audit vary from the Budget?Some examples to highlight

•At time of adoption, 2009-10 budget anticipated 20J and higher Foundation Allowance

State Aid

•Significant shift of aid recognition from ARRA and other Federal funds

Federal Aid

•Special Ed reconciles past expenditures with revenues

Act 18

•In response to these variances, other expenditures are often affected

Other Expenses

4

Formula Driven Hold Harmless Millage RateIn GPPSS the variables will adjust to yield $1,893/pupil

Financial Transparency Series – School Funding and Taxes

Increasing Enrollment

Decreasing Enrollment

Increasing SEV’s

DecreasingSEV’s

Dow

nw

ard

Milla

gee

Pre

ssure

Up

ward

Mill

ag

ee

Pre

ssure

Proposal A self corrects tax rates to ensure fixed per pupil funding

Counter Balance

5

GPPSS School Per Pupil Foundation AllowanceYears of flat or nominal increases hit a low point in 2009-10

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

$22,000

Real Dollars Nominal Dollars


6

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

$200,000,000

$220,000,000

$240,000,000


10 Year History of General Fund Expenditures2010 budget same as 2005; but 24% lower than 2001 in real dollars


7

Local Foundation Allowance Revenue (Per Pupil x Enrollment)Combined Real Local Homestead & Non-Homestead Tax Revenue lower than 1999

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

$23,100$25,700

$22,865

$17,962

$23,974


Th

ou

san

ds


8

Combined Local Homestead, Technology and Sinking Fund

In real dollars homeowner tax revenue is 25% less than high-water mark of 2004

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$20,300

$24,000

$16,319$18,153


Th

ou

san

ds


9

GPPSS Student Enrollment – 1992 to 2011Has been declining since 2004; but 2010-11 still 10% higher than 1992

19921994

19961998

20002002

20042006

20082010

6,500

7,000

7,500

8,000

8,500

9,000

9,500

7,407

8,986

8,186


10

State of Michigan and GPPSS Student Enrollment Year over year percentage change shows GPPSS’ correlates with state’s pattern

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

GPPSS State of MI


11

GPPSS Teaching and Non-Teaching Staff LevelsIn Proposal A era districts MUST scale staff to enrollment

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

250

300

350

400

450

500

550

600

650

700

6,500

7,000

7,500

8,000

8,500

9,000

9,500637

432

Teachers Non-Teachers Enrollment

FTE E

mp

loyees

En

rollm

en

t


12

Ratio of Teaching and Non-Teaching Staff to EnrollmentTeacher ratio consistent; zero-based approach reduced non-teachers in

2010

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

12.0

14.0

16.0

18.0

20.0

22.0

24.0

26.0

28.0

30.0

14.514.9 14.9

20.7

25.428.3

Pupils to Teachers Pupils to Non-Teachers

Em

plo

yees t

o P

up

il R

ati

o


13

What Didn’t We Do in Face of Budget ChallengeMI districts have all had tough choices. Our decisions require context.


Close Elementary

schools

Merge High Schools

Change high school bell schedule

Outsource Custodian

Staff

Cut teachers mid-year

Substantially raise class

sizes

Raise Extracurricul

ar Partic. Fees

Reduce Performing

Arts or Athletics

Spend down Fund Equity

(with no end game)

14

GPPSS 13 Year History of General Fund EquityAs state finances worsened conservative local budgeting was required

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

$22,000

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

Fund Equity Value Fund Equity % of Expenditures

Fu

nd

Eq

uit

y in

Th

ou

san

ds


15 1. State tax

revenue linked to

state economy 2.

Foundation

Allowance (FA)

linked to state tax revenues

3. Local district

revenues linked to FA and

enrollment

4. District staffing linked to enrollme

nt

5. New contracts link staff compensation to FA, other variables

Significance of the new contracts:

Staff compensation was formerly

uncoupled to the very economic

system upon which it should have been

primarily dependent.

The new contract fixes this. We now have a closed-loop

system.


This was the

missing link.

16

Summary

We are very well-positioned for the short and long-term

Taxpayers enjoy reduced tax and fee burden while benefitting from a high-performance district

New contract structure enables innovative shared risk/shared reward model – rapidly being emulated by other districts (e.g. Ann Arbor, Farmington)

New contract provides ability to leverage strong fund equity position in a controlled fashion for student benefit

Stable financial position, adjustable to variables beyond local control, allows for primary focus on the educational program, not finances


gppss 2010 financial state of the district

Government & Nonprofit