Kent Cartwright, CPAChief Financial OfficerPublic Schools of PetoskeyApril 15, 2011

* Spring 2011 Budget Update and Projection for the Public Schools of Petoskey

*School State Aid Summary FY 2011-12 – Based on Governor's Proposal

*Foundation allowance reduced $470 to $6,846

*Categorical Funding reduced or eliminated

*Declining enrollment = $22,000

*Districts expected to find 10% savings in consolidation efforts

*Retirement rate moves from 20.66% to 24.46% (Cost to Petoskey = $468,541 or $163 per pupil)

Feb-06 Sep-06 Feb-07 Sep-07 Feb-08 Sep-08 Feb-09 Sep-09 Feb-10 Sep-10 Feb-11

Elementary 1281.93 1268.39 1253.93 1250.13 1253.91 1269.95 1255.95 1233.32 1241.82 1222.74 1238.42

Middle School 702 673 678.76 683.51 681.74 685.76 692.25 672.66 666.38 656.47 666.78

High School 1070.73 1065.33 1036.66 1053.83 1029.03 1020.66 1001.82 1025.16 1006.46 1007.65 986.84

Total 3054.66 3006.72 2969.35 2987.47 2964.68 2976.37 2950.02 2931.14 2914.66 2886.86 2892.04

550 650 750 850 950

1,050 1,150 1,250 1,350 1,450 1,550 1,650 1,750 1,850 1,950 2,050 2,150 2,250 2,350 2,450 2,550 2,650 2,750 2,850 2,950 3,050

Public Schools of Petoskey – Enrollment by Level

Property Taxes61%

State Aid Paid Directly by State24%

Local1%

ISD7%

State2%

Federal4%Public Schools of Petoskey

2010-11 Estimated Revenue

Administration & Business 10.37%

Operations and Main-tenance8.53%

Transportation4.26%

Support Services7.42%

Community Services0.15%

Athletics1.52%

Basic Programs50.66%

Added Needs17.08%

Public Schools of Petoskey2010-11 Projected Expenditures

*FY 2011-12Assumptions Used

*Governor’s cut of $470 is enacted = Foundation allowance of $6,864

*Pupil count loss of 13 FTE

*ARRA Funds expire, not renewed (This may impact some of our Aides’ positions)

*Edujobs used 100% in FY 2011-12

*Steps included; no other pay increases

*Insurance costs increase 10%

*MPSERS rate moves from 20.66% to 24.46%

2011-12 Fiscal ProjectionPublic Schools of Petoskey

April 21, 2011

Estimated Beginning Fund Balance (Undesignated) July 1, 2011 $2,335,339 9.3%

2010-11 Budgeted Revenues (Feb. 2011 Budget Revision) $25,136,132

Changes Projected for Next Year:ARRA Funds   ($417,375) Edujobs Funds   $653,676  Enrollment Decrease (13.00) ($88,998)Declining Enrollment Categorical Cut ($23,331)Governor's Recommended Cuts ($470) ($865,800)Other adjusts ($121,924) Total Changes ($863,752)

Estimated 2011-12 Revenue $24,272,380

2010-11 Budgeted Expenditures (Feb. 2011 Budget Revision) $25,371,676

Changes Projected for Next Year:MPSERS Rate Increase to 24.46% 3.80% $468,541 Staffing Needs 3.0 FTE $210,000 Step Cost Increase   $209,000 Health Insurance Rate Increase 10.00% $390,105 Other adjustments 10.00% ($23,816) Total Changes $1,253,830

Estimated 2011-12 Expenditures $26,625,506 $0

Projected Operating Surplus (Deficit) for 2011-12 ($2,353,126)

Projected Ending Fund Balance June 30, 2012         ($17,787)                -0.1%

* Observations and Recommendations

*In my opinion, public school employees are likely, or highly likely, to be required to contribute for health care to some degree due to pending legislation.

*A prudent employee should begin to consider the impact on their personal finances if the State required each of us contribute between $2,000 and $7,000 annually for insurance, beginning possibly as early as July 1, 2011.