While Oxford Schools has seen plenty of blue skies and sunshine in past budgets, the outlook for the 2015-16 fiscal year has some gray clouds looming.
There could be a need for more than $700,000 in cost reductions just to give the district a balanced budget.
Contributing to the shortfall are compensation increases and potential grant and state-aid reductions.
The compensation increases for Oxford teachers which were approved by the school board last November are expected to go into full effect July 1. The increases are expected to raise budget expenditures by more than $1.1 million. However, the raises are contingent that a minimum of $450,000 in insurance reform would be achieved in order to offset some of the cost.
?(Former Chief Operations Officer) Pam (Anstey) was very adamant to say this is a minimum,? explained current Controller for Oxford Schools, Fred Shuback. ‘Not just hit that number and we’re happy, we need to get more (savings) really, but that’s the least we need (to give the raises).?
The raises were also approved based on assumptions that state aid would remain flat based on enrollment and that the district would also continue to get the performance bonus ($100 per student) and Best Practice bonus ($50 per student). According to Governor Rick Snyder’s current budget proposal, he is recommending increasing the state foundation allowance by $75 (Oxford currently receives ($7,251 per student) and doing away with Student Performance funding and lowering the money received from ‘Best Practices? by $30. In order to receive ‘best practice? money, districts are required to meet seven out of nine criteria that the state has deemed as a ‘best practice.? This would result in a $304,260 loss for Oxford, which would be a worse case scenario unless the state House or Senate recommend differently.
‘Things at the state change at a whim and nobody knows what’s going to be the final (outcome),? Shuback said. ‘The governor’s proposal usually comes out on top.?
Along with the compensation increases and the state aid reduction could be almost $90,000 in state and federal grant reductions related to special education and at-risk students.
‘It’s projected currently to be about $47,000 loss from (the federal government) and $42,000 from (the) state,? Shuback noted.
On a positive note, Oxford will save $348,000 on a retirement incentives that are expiring this year.
‘We had a number of retirement incentives that were paid out for a number of years,? Shuback said. ‘This fiscal year that we’re currently in is the last year we had to pay them.?
But even with minimum insurance reform and the retirement incentive expiration, the district is still left with a $726,000 problem.
How to fix the problem?
Upon returning to work this week after a week’s vacation, Deputy Superintendent Tim Throne told this reporter the budget is the ‘number on thing on my plate.?
Even though he couldn’t give a detailed plan yet as to how he plans reduce the $726,751 gap, he did speak in general terms about some possibilities.
One is to find greater ways to make the schedules at the middle and high school levels more efficient.
He used the example of a Math 101 class where they there might be a total of 60 kids taking the class, but because of the Master schedule, the classes are broken into four classes of 15 kids each.
‘If I can massage that schedule so I can combine those sections where I have two sections of 30, instead of four sections of 15, I just saved two additional teaching hours . . . and I may be able, in essence, to reduce that entire schedule by a couple of positions,? he said. ‘That’s how you save money.?
However, he was quick to add that ‘reducing positions? didn’t mean cutting teachers. ‘We continually experience growth, eighth-graders coming into ninth grade, school-of-choice kids coming into ninth grade and what have you,? he said. ‘We’ve had enough growth where we can say we’re going to fill in some of those missing sections.?
Consolidation is a problem Throne sees at many schools.
‘This is why so many districts have problems with their budgets. In the majority of districts where your enrollment is staying flat or going down, they don’t re-optimize and try and find excess teaching positions or teaching holes and eliminate that position right away,? he added. ‘What happens is they say ‘we lost 20 kids, but where those kids are at, we can’t consolidate it to one full-time teacher.? So you keep that teacher on, paying the same amount expense, but your revenue dropped by 20 times $7,000. That’s a problem.?
Making schedules as efficient as possible also includes paying close attention to the total number of students per grade, number of students in required classes and the number of students in electives.
Like consolidation, expansion works similarly, according to Throne.
‘If there are two sections of physics, (but we have a lot of students need or wanting to take physics) I may need to go to four sections this year,? he said. ‘Can I create two more sections in physics without hiring an additional teacher? That’s the key.?
He noted that one of the other things they’re looking into is offering traditional seated students the ability to take one or two classes online, which is becoming a ‘growing amount.?
While the budget has traditionally been built upon ‘zero-growth,? Throne said more enrollment is a bonus.
‘It’s been a benefit to us in that we’ve had growth (the past several years) and we’ve added revenue, even though it wasn’t budgeted,? he said. ‘That’s another avenue to fill in those holes.?
While surrounding districts, such as Lake Orion, Clarkston and Brandon, have all estimated student loss as apart of their budgeting process, Oxford’s budget is based upon the same number of students as last fall.
‘If you track their history (in other districts), you’ll probably see for the past number of years they’ve been going down (in enrollment),? Shuback said. ‘We have not. We’ve been going up.?
One of the things that have helped keep them in a state of ‘constant growth? is the Oxford Virtual Academy, which is an area Throne hopes to expand.
‘That’s where we feel we can grow numbers, provide a great experience and not impact our facilities,? he said. ‘That’s the key.?
During budget discussions back in March, it was pointed out that OIRA (Oxford International Residence Academy) took a hit of $80,405, due not getting the amount of international students that they budgeted for. When asked about the situation, Throne said it may look like they lost $80,000, but he said he can also show where they dropped their cost by more than $80,000 because they didn’t have those kids sitting in classroom seats.
‘When it comes to OIRA, I don’t care if I get one kid or I get 100 kids, my charge is to always show OIRA, not only balances, but provides opportunity and funding back into the district,? he added. ‘You got to be careful when you’re talking budget versus reality. OIRA didn’t lose money, because even though I didn’t get that revenue, I also didn’t incur more expense.?
Insurance reform status
As for the insurance reform, Throne said he and Assistant Superintendent of Human Resources Nancy Latowski met before he had left on vacation and they’re getting ‘very close.?
Throne is hoping they can roll out their proposal to the teachers, sometime this week.
‘At that some point along the road, it will be a ‘go? or ‘no go,? he said. ?(It will either be) ‘Yup, let’s get approval from our people that we want to move forward and we’ll initiate the insurance reform? or we’ll say ‘nope, we just can’t do it and it’s no go? and we’ll hold salaries steady and just move the current insurance packages forward.?
See next week’s edition for part two on the budget as it relates to strategic plans for transportation, infrastructure, curriculum and technology.