April 02, 2014 - Part 5 on Clarkston schools' new five-year Strategic Plan is on its fourth focus area, Finance.
Clarkston schools' second amended budget shows $1 million surplus. How to use those extra funds is what the Strategic Plan is all about, officials say.
"We need to have meaningful dialogue to understand all our needs in the district and decide on how to apply the surplus that has been identified," said Joan Patterson, school board treasurer.
Superintendent Dr. Rod Rock recommends spending it on critical needs, including teachers, technology, and building, maintenancece, and other capital projects, while mainaining a five percent reserve fund balance.
The school board will review the recommendations based on the new strategic plan, Patterson said
"It has been a problem in the past when the administration spent resources on initiatives the entire board was not aware of and may not have supported," she said.
Board President Rosalie Lieblang agreed.
"A Strategic Plan should help prevent making financial decisions based on personal preferences," Lieblang said.
One example is the Fast ForWord program, which the district purchased in 2009 for about $300,000, Lieblang said.
"We didn't have a Strategic Plan but this was a priority of our previous superintendent," she said. "When Dr. Rock arrived, this program was not his priority so the use of the program decreased significantly but, unfortunately, the $300,000 was sunk cost."
The $1 million surplus was a result of over budgeting for insurance premiums for the staff, said Board Vice President Susan Boatman.
"As it turned out, numerous employees decided to drop their district health insurance which resulted in under spending our budgeted amount for health insurance," Boatman said. "This is likely a one-time event though there is no guarantee that employees may change their mind and request district insurance in the future."
While the district has $1 million savings this year, last year it lost $2 million on healthcare, which came directly out of fund equity, Lieblang said.
"One thing to keep in mind about the projected $1 million surplus – we believe we will achieve the surplus based on employees not selecting the district's healthcare. "We have many priorities and employee compensation is one of them."
Teachers and school employees attending school board meetings have asked the surplus be used to restore pay and benefits lost over the years.
"We did not go into this job for the money, but we do expect our salary to value our sacrifice," said Ryan Eisele, teacher at Clarkston High School at the March 24 school board meeting.
Success of the plan depends on transparency from administration, said board Secretary Craig Hamilton.
"The limit on how much money can be spent before board approval is just over $20,000," Hamilton said. "It is shocking how many transactions are just below that amount, and who knows how many are broken up into multiple smaller transactions to avoid having to get board approval for purchases; essentially circumventing the board and board approval."
Patterson agreed, "The process is dependent on accurate data provided before, during, and after the process to drive our decisions. In the past, the data was not provided in a timely fashion or to the level of detail requested. Hopefully through leveraging the strategic plan development process, we can obtain the data needed to operationalize resolution of our needs and to evaluate the effectiveness of our decisions."
Student Achievement is the number one board priority, the treasurer said.
"Using that and the other components of the strategic plan, we can evaluate, in an open way, alignment of an initiative to the district goals; and be held accountable for doing so," she said. "Is this initiative the best use of our funds or is it the program or idea of the day?"
One of the goals of the strategic plan is to develop long-term, multi-year financial planning, including financial forecasts, trends, and impacts, audit results, and recommendations for savings.
"I would hope that we use the strategic plan to develop a multiyear map/plan of what we would like to do and when based on how urgent those needs are," Hamilton said. "This is just me hoping, since we are yet to be provided with anything but the generalities you have seen at the board meetings."
"I am hopeful that with the development of a strategic plan and annual operating plans that the board and administration will be united in our focus on district initiatives," Boatman said.
Focus-area strategies also include developing ways to maximize resources and funding, and budget parameters as a framework for discussion and decision-making; review and manage reserve fund balance policy and all potential revenue sources and expenditures, including athletics, community education, facilities, shared time partnerships, and future debt including refinancing options; and explore new ways to fund technology, equipment replacement, and repair and maintenance schedules, and increase revenue.
Hamiton has learned a lot from last year's budget process.
"The foremost being Dr. Rock telling me, months after the fact, that we approved the elimination the director of technology position because the board approved a budget without salary for that position in it," said the board secretary. "I thought that was a underhanded way of doing it, but I have learned that it is how things are done with this administration."
Each year, the administration should identify priorities from the strategic plan and create an annual operating plan, Lieblang said.
This annual operating plan provides more specifics on how the administration will address the selected strategic plan priorities, she said.
"My vision would be that we stack rank the priorities and associated budget related solutions to these priorities," she said. "We would fund the priorities in order until we reach the amount of available budget we have for the year. We need to be cautious, however, that we understand not only how much surplus we may have but we also need to understand, is it one time or recurring surplus."
Clarkston Community Schools receives $7,140 per student from the state during the 2014 school year, reports administration. With an estimated student count of 8,246, revenue from the state will be about $58.88 million. Total revenue is budgeted at $76.2 million, up from last year's $72.85 million.
Last year's per-pupil funding was $7,082 and student count, 8,024. The district's reserve fund balance this year is estimated at $3.32 million, 4.3 percent of total revenue. In the 2008 school year, the fund balance was $14.46 million, 19 percent of the total budget.
Retirement costs for 2014 is an estimated $12 million, about 30 percent of the budget, up from $7.69 million in 2008, 16.72 percent.
Insurance costs will be an estimate $7.255 million in 2014, down from $10.9 million last year due to restructuring and employee concessions, administration said.
Total salaries are an estimated $42.21 million in 2014, down from $48.4 million in 2010.
Total general fund expenditures will be an estimated $75.9 million in 2014, down from $77.4 million last year.
Phil is editor for The Clarkston News. He is a veteran of the first Iraq war, having served in the U.S. Army.