Goodrich school deficit could top $5 million
By the time the 2010-11 school year starts the
per-pupil funding will be reduced to $6,716.
November 25, 2009 - Goodrich- It's not a great picture.
That's how Superintendent John Fazer described the financial forecast spanning the next three years for the school district, during the Nov. 23 school board meeting.
Despite a healthy $3.7 million fund balance concluding the 2008-09 fiscal year which ended in June, Fazer outlined a significant decline in funding through the 2013 school year—a dip that could end with a $5 million deficit.
From an original budgeted per-pupil funding of $7,316, a drop of almost $600 per student is the result of a bill currently being considered by state lawmakers that chops $292 in per-pupil funding from districts statewide. In addition, the district is currently receiving $308 per student in stimulus money that will expire early next year. By the time the 2010-11 school year starts, the per-pupil funding will be reduced to $6,716.
The scenario may worsen if student enrollment continues to drop. The district realized a decline in enrollment of 35 students in the September count—an enrollment drop of about 100 over the next three years is projected.
"By the 2013 school year we could be as much as $5 million in the red," said Fazer. "This projection is as if we spend the way we do now. We have to change our spending habits."The rather dismal "recipe for disaster" is the result of several factors including no new revenues to offset new fixed expenses which include an estimated 4 to 10 percent increase in health care, the need for additional capital outlay for buildings, and fuel cost for buses.
"A 1 percent increase in health care costs the district $25,000," said Fazer.
Another factor that will cost the district over the next three years is a 2008 ruling from a Michigan Employment Relations Commission (MERC) judge that the school district illegally removed 12 days from the school calendar without collective bargaining. The decision stems from an April 2005 proposal to the Goodrich Education Association by the board of education, promising no layoffs of certified teachers if they agreed to work 14 fewer days. The calendar reduction would save the district as much as $50,000 for each day school is not in session, said school officials.
The legal fees and settlement for the case now total more than $500,000, said Fazer.
"The question becomes, 'how do we stop the slide?'" he said. "It becomes a matter of restructuring the district—ideas including outsourcing jobs, seeking new revenues, to collaboration with other districts are all possibilities."
School Board Trustee Jim Bertrand said the answers can be fairly simple.
"We need to open our doors to Schools of Choice," said Bertrand.
"Right now our numbers are limited—we need to be part of the competition with other districts to enroll students. Another 100 students over the next three years is $700,000 —that will save jobs. Rather than looking at the expense side of the equation—let's look at the revenue side."