May 21, 2014 - By Meg Peters
Review Staff Writer
To try and close a nearly $1.5 million deficit, Lake Orion Community Schools is squeezing what they can from four different avenues.
Step one: layoffs
The school board approved 11 teacher layoffs Wednesday, May 14 at the all day board workshop. This number does not include non-teacher layoffs, which the cabinet and human resources department will be analyzing until the end of the school year for positions that could be restructured for efficiency purposes. Some courses may or may not be offered at the high school next year, for example, allowing the district to leave that Full Time Equivalent (FTE) position un-staffed.
"I don't think we will end up with 11 layoffs in the end, but you do it now for formality purposes," Assistant Superintendent of Business and Finance John Fitzgerald said. Come August the district will decide if they can hire any back. "Otherwise you're locked in for pretty much half a year before you realize you have too many teachers and not enough kids," he said.
Step two: negotiations
The Human Resource department is negotiating with school groups and unions, including the American Federation of State, County & Municipal Employees (AFSCME), for fiscal year 2014-15 contracts. Ninety-nine percent of teacher contracts are up after this year, which gives the district bargaining room.
"That's the big thing that's going to close our deficit," Fitzgerald said. "We will get some cross-relief based on how we stretch it to save money one way or another."
Currently contracts are set up schematically on different salary levels. It works as a pre-meditated raise: teachers move up a step after working so many years. Fitzgerald's first revision to the budget includes a 'step-up' for teachers, which hasn't taken place three out of the five last years. However HR could negotiate something different with that.
Union administrators have given the HR department direction of what they are requesting in terms of changes, and negotiations could be complete as early as June or by the end of summer.
"We have a good relationship with them. The teacher's union is our biggest union," Fitzgerald said.
Step three: Schools of choice
From April 14 until May 13 a grand total of 277 students applied for the Schools of Choice program. The program was offered for students in grades pre-kindergarten to eighth grade and the learning options programs for grades 10 through 12. Kindergarten students through second grade were accepted for the current year.
If 175 of those students enroll, the $1.5 million deficit would drop to $1 million Fitzgerald said. If 225 students enroll, that's another $300,000 for the district from state aid, assuming voters approve the non-homestead millage request renewal this fall.
The non-homestead millage is an 18 mill tax on non-homestead residential and commercial properties renewed every 10 years in the Lake Orion district, and ensures the full amount of state aid for per-pupil funding.
Fitzgerald is anticipating at least 175 of the students who applied to enroll in the program.
"We know that 41 of the kids are students who are here now that are moving out, and their parents want them to stay," he said. "So that's a lot as far as I'm counting."
Step four: pending legislation
Fitzgerald is planning the fiscal year 2014-15 budget now which is due in June with four different funding proposals hanging over his head.
Thus far he is planning the budget according to Governor Rick Snyder's Executive Recommendation of increasing state aid by $65 per student. The House passed budget would increase rates to $70.50 per student; senate passed budget would increase it by $75, and the Classrooms for Kids, a state wide educational association, estimated net dollar change would be $113.
The district chose to go with the most conservative amount.
The student foundational allowance is currently $7,877 and would go up to $7,972 according to the first draft of next years budget, which is still capable of changing.
"Instead of that net $65 we could end up with a net $100. It's an election year and it wouldn't surprise me if they gave numbers a little more kind to their constituents," Fitzgerald said, which would bring the deficit down a bit further.
"It's my goal to have a balanced budget coming into next year," he continued.
The extended five-year forecast projects the district to be clear of an operating deficit for fiscal year 2017-18, which largely depends on how many new students move into the near 747 houses expected to pop up in Orion Township.