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No layoffs, 1% raises in districtís proposed $48.9M budget

by Trevor Keiser

June 18, 2014

Oxford School's proposed $48.9 million budget for the 2014-15 fiscal year contains no layoffs and no pay cuts, according to Assistant Superintenent of Business & Finance Pamela Anstey.

All staff will receive a 1 percent pay increase, with the exception of executive salaries, which will remain at their negotiated contract level.

"We know that's not adequate and we're going to keep moving forward to try and figure out how to take care of that," she noted.

"It's a balanced budget," Anstey said. "The state came through with additional revenue, we've been able to maintain programs and we've also invested in intervention and assessment which is something that was priority this year."

Originally, the district estimated receiving a foundation allowance of $7,255 per pupil, a 110 per pupil increase from last year; 91 per pupil for academic performance for academic performance ($0 were received in fiscal 2013-14) and $52 per pupil (same as fiscal 2013-14) for accomplishing "best practices." However the state voted $106 for foundation allowance, $50 for best practices and $100 for academic performance grant. Anstey said the $3 difference equals an extra "$15,000 to the good" for the district.

The "biggie issues" of the budget are the rise in healthcare and retirement costs. The hard cap limits for health insurance are factored into the budget with an inflationary increase of 2.9 percent ($361,150). Retirement rates are projected at 25.78 percent, which is a .99 percent increase ($401,659), plus an unfunded liability increase of 3.06 percent ($776,593).

"What we're wrestling with is normally your salaries would be about 60 percent and your benefits 20 percent (of your total budget), our budget is currently 50/30, but everybody across the state is suffering that," explained Anstey. "So, we're going to have to figure out how we can take care of our employees and still provide healthcare benefits because right now it's non-controllable. The contract says is MASA (Michigan Association of School Administrators) and they raise the rates and we pay them."

However, benefits are a negotiated item, so Anstey said they are going to have to work with the unions to determine changes so they can reward their employees.

"One thing we can do if you can't negotiate is to come up with options," she added. "What I think we need to do is go out to market and see what options there are and have a cafeteria style plan where individuals can choose what kind of healthcare they want."

Another option would be an 80/20 plan, where the board votes to impose a 20 percent contribution to healthcare from the employees.

"Without taking care of your employees and giving increases that 20 percent contribution would really hurt, especially the lower paid ones," Anstey noted. "That's something the district doesn't want to do, but if revenues stay flat and you keep getting increases in expenditures we're going to have to do something and make some hard decisions."

However, Anstey is hopeful the housing market is going to keep rising. She would also like to build the fund balance from its current 10 percent ($5.1 million) up to closer to 16 percent.

"A good norm is 16.67 percent or two months of cash flow," she said "Because the way school districts operate and because you don't have the income in revenue influx in the summer it's good to have that (amount) to carry (you through summer).

Another area they need to look at is infrastructure. Anstey said they need to look at building issues as well as an aging transportation fleet. They had to budget $105,000 for two new short-bus replacements.

"We've always bought used, but these we couldn't, small buses are hard to buy at auction," Anstey said. "What we really have to do is look at building our fleet. Normally what the practice had been was to put in $400,000 and buy five buses a year so you had a 10 year replacement plan. It hasn't been in there in a long time because that's something easy to take out when you're trying to balance the budget."

As for enrollment, they are projecting approximately 5,244.35 students compared to the Spring Count Day of 5,337.31 students.

This is assuming the same size kindergarten as fiscal year 2014 of 328 students, 40 international students of incoming juniors in FY 15, school of choice incoming freshman of 40 and 48 Full Time Equivalent Oxford Virtual Academy students.

"We're hoping for increased enrollment," Anstey said. "(Superintendent) Dr. (William) Skilling feels pretty confident that we will have increased enrollment, but we can't really use that to balance the budget."

As far as looking forward, Anstey said they are looking at creating a three-year projection in order to look at what they need to do to "sustain the district" and keep it where it should be academically and fiscally.

"The big thing is you need to plan to increase your fund balance. You need to plan to take care of your employees (and) you need to plan changes for health insurance," she said. "All of those things will be part of the projection going forward."

A public hearing and approval of the budget will be at 6:30, June 26 at the Board of Education office, located at 10 North Washington Street.