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GRPS Legislative Brunch Monday, February 21, 2011

Refresher on GRPS

• 3rd Largest School District in Michigan– 18,500+ students– 86%+ free/reduced lunch– 25% Special education – 20% English language learners– 43% African American / 30% Hispanic / 23% Caucasian

• 2nd Largest Employer in Grand Rapids; 10th Largest in West Michigan– 3,000+ employees (1,400 teachers)

• $283 Million Annual Expense Budget

GRPS Success StoryReforms and Rightsizing Redefine GRPS

• GRPS gaining state and national attention as a “model” for educational improvements and right sizing reforms

• Significant Academic Gains– 5 consecutive years of academic improvements (Increased

AYP; MEAP scores)– Nearly doubled # of Schools Meeting AYP - up from 26 to 49 – Nearly quadrupled # of Schools Earning “B” Grade or Better– 5 schools earn statewide recognition for “turnaround success”

• Cutting Edge Instructional Reforms– Since 2007, implementing national renowned “effort based

learning” model– Driving systemic changes through district

GRPS Success StoryReforms and Rightsizing Redefine GRPS

• Innovative New School Choices– Public-private partnerships: Amway, Spectrum, Steelcase,

MSU Med School, GRCC, GVSU, Rockford Construction, Triangle, Progressive, Michigan Tech, etc.

– “Centers of Innovation”

• Safe Schools Even Safer– New technology, relationship building, and training– Reduced number of major incidents for 5 consecutive years

• New State of the Art Learning Environments– 2004 School Construction Bond– 11 new state-of-the-art elementary and middle schools– 8 green built; 5 LEED certified; largest number in Michigan

GRPS Success StoryReforms and Rightsizing Redefine GRPS

• Sound Fiscal Management– GRPS CFO voted School Business Official of the Year– Approved and balanced budget on-time– Grew fund balance

• GRPS a Leader in Service Consolidation & Collaboration– Food Service: GRPS manages food service for East Grand

Rapids, Grand Rapids Christian, and some Grand Rapids Catholic Schools

– Special Education: In partnership with KISD, GRPS manages center-based special education programs for all KISD school districts

– Public Safety Training: Thanks to a federal public safety grant, GRPS manages public safety and crisis training for area public and private schools

– City of Grand Rapids/GRPS Partnership Agreement

Challenges: High School Reform

• Not just a GRPS issue; it’s nationwide

• High school achievement and graduation rates unacceptably low– District Graduation Rate: 52%– Comprehensive/Theme Schools: 76% (1% above state average)– Alternative Schools: 33%

• Students not adequately prepared for post-secondary challenges of global world

GRPS Budget Overview

By Lisa Freiburger, Deputy Superintendent of Finance and Operations

Fiscal ResponsibilityA History of Hard Decisions

10 Years of “right sizing” reforms, cuts, school closures, and consolidation

– Nearly $70 million in budget reductions– Closed or consolidated 20+ buildings and programs– Privatized transportation and substitute teaching – Eliminated administrative, teaching and other positions– Purchases postponed (text books, technology, academic

support)– Special education services restructured– Negotiated wage and benefit concessions– Enrollment decline from 25,663 in 2001 to approximately 18,500

today

Fiscal ResponsibilityA Decade of Budget Cuts

1999-2000 $6.5 million

2000-2001 $3 million

2001-2002 $8.5 million

2002-2003 $10.3 million

2003-2004 $9 million

2004-2005 $5.6 million

2005-2006 $9 million

2006-2007 $2.8 million

2007-2008 $1.05 million

2008-2009 $1.57 million

2009-2010 $5.66 million

2010-2011 $6.85 million

2011-2012 *$25 million

Financial History: Shrinking NumbersFewer students and declining fund balance

Year Student

Count

Fund Balance Percent of Expense

99/00 25,978.04 $ 16,644,052 7.84%

00/01 25,625.05 $ 7,671,044 3.39%

01/02 24,632.54 $ 10,116,849 4.58%

02/03 24,144.33 $ 13,862,014 6.21%

03/04 23,426.35 $ 14,240,060 6.42%

04/05 22,592.24 $ 13,726,765 6.00%

05/06 21,722.00 $ 13,731,679 6.45%

06/07 21,025.64 $ 13,157,329 6.18%

07/08

08/09

19,915.32

19,364.01

$ 12,095,061

$ 9,715,488

5.50%

4.48%

09/10 19,105.84 $ 15,684,477 7.37%

Employee Health and Retirement

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2006 2007 2008 2009 2010 2011-proj

2012-proj

Foundation allowance

Employee insurances and retirement

2011-2012 Revenue ProjectionBased on Governor’s Budget Proposal

Description Assumption Variance

Enrollment Approx. 400 student loss ($3 million)

Per Pupil Foundation Additional $300/pupil cut ($5.6 million)

Other State Funding Loss of Small Class Size (37 teachers K-3rd grade; increase elementary class sizes)

($3 million)

Other State Funding*** Elimination of Sec. 22b Discretionary Payment (Special Education Hold Harmless; Durant Settlement)

($3.4 million)

Other Funding Elimination of Categorical Funding (Bilingual, Declining Enrollment, and GRAPCEP); Act 18; Other

($1.45 million)

2011-2012 Expense ProjectionBased on Governor’s Budget Proposal

Description Assumption Variance

Salary Increases Estimated at 3%; Accounting for step change

($2.9 million)

Health Insurance Increase

Estimated at 20% ($2.6 million)

Retirement Rate Increase

Rate increased to 24.46%; up from 20.66

($2.75 million)

Other Increases Utilities, transportation, transfers, other ($800,000)

One Time Expenses Textbooks and Debt Payment $4.2 million

Loss of ARRA IDEA (Fed Stimulus Special education)

Salary and benefit expenses back to General Fund

($1.9 million)

2011-2012 ProjectionBased on Governor’s Budget Proposal

Projected Use of Fund Balance

$(1.8 million)

Total Revenue Decrease $(16.45 million)

Total Expense Increase $(6.75 million)

Projected Operating Loss $(25 million)

Issues of ConcernGRPS Disproportionately Cut

• $300/pupil cut largest of decade

• Poorest districts with highest needs students and declining enrollment hit hardest with cuts above and beyond the per pupil reduction

– Elimination of Class Size Reduction– Elimination of Bilingual Categorical– Elimination of Sec. 22 Special Education Hold Harmless***– Elimination of Declining Enrollment Categorical

• Raid of School Aid Fund violates intent of Proposal A– Voters approved dedicated funds for K-12 public education

Michigan Public School Facts

• There are 775 school districts in Michigan (2008-2009)• GRPS is the 3rd largest school district

GRPS is:• Bottom 31% in state revenue (ranked 534th)• Top 12% in total revenue from all sources (ranked 89th)• Top 36% in average teacher salary (ranked 282nd)• Top 21% in total spent on instruction (ranked 161st)

Source: MDE – Most recent data available – 2006/2007, published May 2008