GPPSS 2012-13 Financial State of the District_FINAL

7/30/2019 GPPSS 2012-13 Financial State of the District_FINAL

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2012-13 FINANCIAL STATE OF THE DISTRIC T

P R E P A R E D B Y: B R E N D A N W A 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


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Key General Concepts

Source Data

Michigan Dept. ofEducation, Bulletin

1014

GPPSS BudgetModeling Utility

2008 through 2011agrees to audit. 2012

and on are projections.

Compensation

Direct compensation issalary and any

additional paymentsmade to employees,governed by contract

Indirect compensationis net health care, FICA

and state mandatedretirement (MPSERS)

SchoolFunding

State dictates per pupiloperating revenue

Health care isnegotiated locally, but

state laws affect

Retirement rate(MPSERS) and FICA arenon-negotiable locally.

2


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Employee contracts Key Concepts

Theme &Intent

Emphasizes totalcompensation rather thanjust direct compensation

Shares risk and rewardproportionally across all

employees

Ties total compensation toschool funding variables

beyond our control

Triggers &Effect

Agreement with employeesthat a 10% Fund Equity level

is necessary

If Fund Equity drops below10%, compensation is

reduced proportionally.

If Fund Equity exceeds 15%,compensation increases

Implications& Benefit

The districts financial

health is protected by thecontracts not Fund Equity

itself

Allows the district to makeinvestment decisions guided

first by best interests ofstudents, not compensation

or budgets

3


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GPPSS and statewide proportional investment by function4

47.4%

55.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Basic Instruction Added Needs

Instruction

Instructional

Support

Business &

Admin.

Operation Maint. Transport.

Statewide Avg. GPPSS

(Source: Michigan Dept. of Education)


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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 655Total $ 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


*Not all expenses are listed, but total is complete


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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 5Combined 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.



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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

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$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

AnnualDeltainM

illions

AnnualRev.,

Exp.

inMillions

Total Revenue Total Expenses Annual Delta

General Fund Annual Revenue and Expenses

8


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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

NISParapros

TA's

Clerical

Plant

Bldg Admin

Teachers

9


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Ratio of Employees to Blended Student Enrollment8% workforce reduction from 2008 through 2012

14.2 13.8 14.1 14.3 14.3 14.3 14.3 14.3

24.723.4

24.4

26.2 26.0 26.1 25.826.5

7,800

7,900

8,000

8,100

8,2008,300

8,400

8,500

8,600

8,700

10.012.0

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

StudentEnrollment

R

atioofEmployee

stoStudents

Student to Teacher Ratio Student to Non-Teacher Ratio Enrollment

10

Includes General and Special Education Teachers


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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

dEquityas%ofExpenditures

FundEquity(in$

000s)

Value % of Expenditures

11


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Cost represented on Per Pupil basis by CategorySmall 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

PerPupil($000s)

Direct Comp. Health Care Retirement/FICA All Other Revenue/Pupil

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Major expenses per pupil as a % of revenue per pupilRetirement 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. Salaryreduction is only way to reduce retirement costs.


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Average total compensation per employeeand 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

Di

fferencefrom20

08baseline

Avg.

Tota

lCompensationinThousands

Direct Comp. Health Care MPSERS/FICA Change from 2008

14


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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


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Potential Employee Compensation Changes in the

Context of our Communities' Changing Economy16

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)


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GPPSS: Striking the right balance

17

Current Path

Salaries scale proportionally torevenue

No change in student to teacherratio

10% projected reduction in direct

compensation over three yearsGrosse Pointe Public Schoolsoperates at a structural surplus

Without

Large class sizes

Reduced programming

Outsourced custodians

Higher student fees

Schools of Choice


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We should still investigate other options

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GPPSS loss of students is out of alignment with likedistricts, even those not reliant on School of Choice.Enrollment

GPPSS cost per pupil rising dramaticallyhigher/faster than benchmark and state average.

Added NeedsInstructional Costs

GPPSS dramatically out of alignment; salaries,ratios/schedules, programs should be evaluated

Basic InstructionalCosts

Currently this is a $1M annual expense. There hasgot to be a better way.

Staff Development/ Substitute Costs

GPPSS 2012-13 Financial State of the District_FINAL

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