Teachers - SharpSchool

Financial Update and Impact Pinconning Area School District January 2010 Michigan and National Economy National recession is expected to last until at least into the first quarter of 2010 Michigan recession projected to bottom out in the summer quarter of 2011 Michigan - Lost 540,000 jobs since 2000 Michigan - Projected additional job loss of 397,000 through year 2011 Unemployment rate of 15% for 2009 Data from University of Michigan and Dana Johnson, Chief Economist Comerica Bank and Maureen Maquire, economist and President of ThinkResearch and CSNews Research Parnter on the Forecast Study Effect on PASD since 2002 Per pupil funding Increased 1.8% per year

Employee retirement Increased about 3.5% per year Health insurance Increased over 5% per year (even with benefit adjustments) Student enrollment Declined 3.1% per year General Fund revenue - $13.9 million for 2008-09 Revenue has decreased an average of 1% per year for seven years. Why is enrollment declining? Birth counts in Michigan were 153,000 in 1990 and were 122,000 in 2008 (about 20% decline) PASD Kindergarten down about 20% since 2001 Parochial enrollment is down 40% from 2001 PASD graduates around 135 seniors each year, but only has about 100 kindergartners. Cumulative Cost of Declining Enrollment

Year Foundation Year/Year Allowance Enrollment Decline Year/Year Lost Revenue Cumulative Enrollment Decline Cumulative Lost Revenue 02-03 $6,700

83 $556.100 83 $556,100 03-04 $6,700 54 $361,800 137 $917,900

04-05 $6,700 27 $180,900 164 $1,098,800 05-06 $6,875 65 $446,875 229

$1,545,675 06-07 $7,085 86 $609,310 315 $2,154,985 07-08 $7,204 70

$504,280 385 2,659,265 08-09 $7,316 34 $248,744 419 $2,908,009 09-10 $7,151

88 $629,288 507 $3,537,297 Total $15,378,0311 Budget Adjustments 2001-2009 Teaching and support positions reduced or eliminated to reflect reductions in enrollment Administrative positions eliminated and combined Health Insurance benefit changes and staff premium contribution

Single bus route for transportation Closed Garfield Elementary Food Service charged more for overhead Budget Adjustments 2001-2009 Implemented Pay to Participate for HS and MS Athletes Staff wage freezes Reduced school/calendar days Community Education programs eliminated Sub-contracted out teacher substitutes Reduced Building and Department Budgets Advantages and Disadvantages of a Buyout Advantages Avoids layoffs Avoids unemployment costs Saves money over one or two years

Significant short-term savings Disadvantages Disrupts normal retirement patterns Mass exodus of experienced teachers Costs the district money over time Why Doesnt a Buyout Work? Generally, people cant afford to retire more than two years early Buyout gives away the savings between step 10 and step 0 Each subsequent year, the replacement teacher is one or two steps ahead on the salary schedule (prematurely hired instead of the normal replacement process) What is the Biggest Issue Facing PASD? Health Insurance? Retirement Rate?

Lack of Funding From the State? Fuel or Utility Costs? Although all of the above are important, one of the biggest issue facing PASD is: DECLINING ENROLLMENT History of Declining Enrollment Fall K-12 Enrollment Counts 2002-09 2045 1962 1908 1881 1816 1730

1660 1626 1538 2001 2002 2003 2004 2005 2006 2007 2008 2009 Enrollment by Level Fall 2002 & 2009 932 Loss of 24% Loss of 8% 704 648 594 Loss of 32% 349 238

Elementary Enrollment Middle School Enrollment Fall 2002 Fall 2009 High School Enrollment Enrollment Decline by Level Fall 2002 to 2009 228 111 51

Elementary Enrollment Decline Middle School Enrollment Decline High School Enrollment Decline Elementary Enrollment % Decline by School - 2002 to 2009 438 18% Loss 362 36% Loss 25% Loss 255

239 179 CENTRAL LINWOOD Fall 2002 Fall 2009 163 MT FOREST Fall K-12 Enrollment Projected Through 2013 1,549 Loss of 8% 1,521

1,467 1,432 2010 2011 2012 2013 Major Changes in States Demographic Composition Ahead -3.9% 7,000 Thous a nds

6,000 5,000 4,000 3,000 2,000 2007 ---14.3% +31.5% -8.5% 1,000 0 5-17 18-24 16-64

Age Groups 65+ 2017 Outlying Elementary School of Choice Currently four students with school of choice at Linwood Elementary. Currently two students with school of choice at Mt. Forest. Elementary/Middle School Grade Level Comparison of Districts K-4 Elementary / 5-8 Middle School Standish K-5 Elementary / 6-8 Middle School

Arenac-Eastern AuGres Bangor Bay City Essexville K-6 Elementary / 7-8 Middle School Pinconning Elementary Building Configuration Central Linwood Mt. Forest

Total 23 14 13 Grade K-6 14 9 8 Young 5 1 0

0 Sp Ed 2 1 1 Library 1 1 1 Computer Lab

1 Lab In Library 1 Music/Health 1 2 1 ISD/Sp Ed Itinerant 1 0 0

Title 1 1 1 Empty 1 0 0 So, What Does This Mean? District-wide, there are 11 elementary rooms not being used for core K-6 classrooms. Taking all the classrooms and an average of 27 per class, student capacity for elementary is

over 1,200. Elementary is currently at a level of 60% capacity. Enrollment at the elementary level is such that the district can operate two elementary schools instead of three. What About Other Levels? Enrollment will continue to decline at middle school and high school levels over the next few years as the low numbers trickle upward. Enrollment at the middle school is such that we could move 6th grade up to middle school, which would compare with other districts in the area. Adjustments will continue to be made each year with staffing levels. We will continue to take advantage of opportunities to reduce expenses in all areas. Cumulative Cost of Declining Enrollment Year

Foundation Year/Year Allowance Enrollment Decline Year/Year Lost Revenue Cumulative Enrollment Decline Cumulative Lost Revenue 10-11 $7,316

54 $395,064 54 $395,064 11-12 $7,316 28 $204,848 82 $599,912 12-13

$7,316 54 $395,064 136 $994,976 13-14 $7,316 35 $256,060 171

$1,251,036 Total $3,240,988 Budget Projections 2010-11 Decline in Enrollment (54 x $.6,900) $372,600 Step Cost $120,000 Health Insurance Increase Cost (5% increase) $86,000 Retirement Rate Increase (1.5% increase)

$20,200 Structural Deficit from 2009-10 $800,000 Decrease in Foundation Allowance $250 per student $385,000 Total Negative Adjustments $1,663,8 00 Consideration of Facility Consolidation Board has been informed about the issue Board meetings and worksessions will continue to communicate the issue publicly Plan for elementary facility consolidation at the

end of 2009-10 Cost savings of approximately $250,000 to close one elementary Closing one school may affect the other school attendance boundaries Board Meetings/Worksessions Will continue to review information such as enrollment history and projections, boundaries, building information, utilities, mechanical systems, staffing, technology Purpose Communicate to the Board and community that an elementary school needs to be closed at the end of the 200910 school year Potential Timeline January Board Meeting Presentation February Site Committee to review current quality of all elementary buildings February On-Line Budget Survey available February/MarchUpdates and information at

Board Meeting and Worksessions March 8 Committee reviews information to close an elementary school building March 22 Board Vote on recommendation to close an elementary End of March Kindergarten Registration begins Late Spring 2010 Transition meetings are held Communication about the Process Link to presentation information will be on the Pinconning Area School's Website at www.PASD.org Updates at each Board meeting On-Line Budget/Financial Survey Presentations to staff and community during February/March Strategic Goals Strong Fiscal Foundation Quality Extra-Curricular Programs Facilities K-12

Quality Technology Plan Appropriate Staffing/Professional Development Quality Curriculum

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