Expenditures Expected to Outpace Revenue for Dearborn Public Schools
Three-year projections indicate the district could face $24 million in deficits, if actions aren’t taken to reign in expenditures and create revenue.
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The Dearborn Public Schools Board of Education now has a better idea of how its finances will look during the next three schools years after its chief financial manager gave them the fiscal lay of the land at the regular Monday night school board meeting.
Bob Cipriano, the director of business services for Dearborn Schools, said that if no cash-saving strategies are implemented, the district would face $24 million in deficits during the next three school years.
“Obviously, we’re going to do something about this,” said Cipriano before the meeting. “But, if nothing were done, this is what we would be looking at.”
The most pressing concerns for the district, at least fiscally, include stubbornly stagnant state dollars and the escalation of pension obligations, among other issues, Cipriano said.
Budget Breakdown
The district’s financial analysis assumes a handful of assumptions; namely that Michigan school districts will not receive additional help from Lansing, and that there will not be a huge influx of students, which would bring with them additional per-pupil funding.
For the current school year, the district lists $230 million in resources, which include state and federal funds for specific, earmarked purposes, such as food services, physical improvements and adult education.
The district’s general fund for 2011-12 equals $169.5 million, but for 2012-13, that revenue is projected to fall to $165.6 million in 2013. The district’s per pupil allotment will likely stay at $8,332 per student, according to the district’s analysis.
At the same time, expenditures for 2013 are expected to increase to $171.6–about $6 million beyond revenue projections. In 2014, expenditures will outpace revenues by $8.8 million, equaling about $174.4 million, and in 2015, the district will face $174.9 million in expenditures; or $9.3 million more than the 2012 revenues.
Additionally, the district will exhaust federal Qualified School Construction Bonds, which provided the schools with additional monies to make major and minor improvements to school facilities. In Dearborn, the district made improvements at several facilities during the summer months of 2010 and 2011, and more improvements will be made this summer, Cipriano said.
That means additional improvements will have to come from the general fund, which cannot support the cost of annual improvements, Cipriano said.
“We need to continue to invest in our buildings,” he said. “The QSCB funds were a one-time thing, and the remaining funds will be used this year.”
Mitigating Factors
Increases in pension and health care costs–among other reasons–are contributing to increased expenditures for the schools.
In 2013, the district’s pension costs will increase by 2.9 percent. The following year, those costs will increase another 3 percent; and in 2015, by 1 percent.
Because there is a projected surplus in Michigan’s School Aid Fund, it is possible that local districts will get some relief, but there could be a catch.
“I think (the additional funds) would be tied to some behavior (required by the state),” he said.
This year, the state set up provisions where additional aid could be procured by schools if certain criteria were met, such as bidding out services or sharing services with other governmental units.
Board Secretary Hussein Berry questioned why the potential for increased enrollment–the district netted $4 million in additional funding for 2011-12 because of an increase of more than 450 students–was not factored into Cipriano’s analysis.
“That (enrollment increases] has been a trend,” he said. Cipriano said that increases cannot be factored into projections.
On the upside, the district was able to get health care and wage concessions from its largest unions. The schools will not be required to retain $2.7 million in reserve funds on hand for health care costs because its two major labor unions will manage their own health care systems.
Budget fixes are subject to approval of the school board, which will take on the 2012-13 budget during the next several months.
marooned in Dbn
8:00 am on Thursday, January 26, 2012
OK, somebody tell me precisely why we had a tax increase in a Nov/2011 vote? Was it to secretly aquire for the mayor and the school board commisars, a new executive office bldg., or was it for "operating expenses", such as for the purpose described in this latest bad news story above. Why are pension expenses going up 7 % by 2015. What kind of sweetheart deals were made with the unions that were overlooked by the public of this fair city? I confess that I for one wasn't aware of any, if you were, why did you approve the tax increase , unless you were in on it.
Enough is enough. Instead of continuously pillageing the tax payers, it is time to institute a form of tuition payment for the parents who send their kids to Dbn public schools if the crisis is that bad. (shared sacrifice). If the "district" was able to get healthcare and wage consessions from "the largest unions" explain exalctly to us, the taxpayer...how much consessions. And if there were consessions, why are pensions going up 7 % by 2015 ? That is really NOT a meaningful "consession" to the taxpayer of this city who are up against a wall.
Concerned Dearborn resident
1:01 pm on Thursday, January 26, 2012
Marooned in Dbn- The Tax increase was for the City not the schools. You are probably right it is for the city to move to a new City hall and not for the reasons that were publicized (ie. police and fire). But the millage passed was for the Cities operation not for the schools in any way. Each year the % of Salary put in a fund for the school employee to retire goes up. So yes in the next 3 years it will go up 7% and go to a total of about 25-27% of the employee's salary in the retirement fund. What questions you need to be asking instead of complaining about the pillageing of tax payors are these: 1) Why does the Superintendents Secretary 2 years ago make 62K a year without benefits. 2) Why does EVERY SCHOOL EMPLOYEE get 20+% put into a retirement fund for them? And yes I mean EVERY EMPLOYEE from the Superintendent down to the bus drivers and custodians.
It is one thing to give a perk like that to the teachers but for it to cover EVERY SINGLE EMPLOYEE is ridiculous! You should question why our school Administration is SO LARGE and Make the Saleries that they do. I mean that same Superintendent's Secretary that made about 62K 2 years ago and her total compensation with all benefits, SSI, and Retirement came to over 90K. Sorry but no Secretary deserves to be making with all benefits over 90K!!!! Especially when some of our teachers do not make that.
Lee Jacobsen
2:06 pm on Thursday, January 26, 2012
A $$ shortfall coming in the schools?? Again!!!!
It's time to take another look at privatizing some of the school services, to put those services back into the competitive market. We can keep the schools halls clean with $20,000 Janitors rather than union $33,000-$43,000 janitors. Here is a link showing averages arount $20 thous tops in the Dearborn private sector.
http://www.indeed.com/salary/q-Janitor-l-Dearborn,-MI-48128.html
This site shows the lowest level entry janitor at hfcc, in the same union as Dearborn employees, at $33,000. Most are at $43 thous.
http://www.collegiatetimes.com/databases/salaries/university-of-michigan-dearborn?order=year,desc&;
For every current janitor, we could hire 2-4 private 'custodians' in the private sector.
This is just janitors. We haven't discussed bus drivers, food service, etc.
Plus, instead of putting in 20% into a retirement account, at tax payer's expense, the private sector would have a 401K where the taxpayers may match whatever the employee contributes , up to 5%. That is a huge savings across the board.
So , who do we address these cost savings ideas to.? They are obviously not reading these forums, or we would have some answers.
GVSU ALUM
2:51 pm on Friday, October 12, 2012
I am reading this post long after the fact however, it outrages me. OVERPAID???????? I happen to be related to one of those janitors. Since when is ANY SALARY below 40K even remotely underpaid? Between housing, medical and gas, the person I know cannot even afford to have a normal food budget. There is no wasteful spending, no cable, no internet, old cars, etc.... Just basic necessities are met with this salary for someone supporting a small family. Perhaps you should job shadow for a day and see if they earn their pay. I am damn sure that they do.
marooned in Dbn
2:10 pm on Thursday, January 26, 2012
Concerned Dbn resident. You are right. Thanks for the fine details I overlooked in the heat of anger. I didnt know the finer details of the points you raised. But rest assured, I agree. Now...watch the powers that be in this city say in a few months..."we need another vote to increase property taxes for schools in our fair city." As a matter of fact, they just might say...."we need an increase for operating expenses again too". As for your point about the salary/bennies of city beaurocrats, all these deals are done almost in secret. They do them and hope nobody notices. In the meantime, they live large. As for your enumerated questions, they fall under the catagory of sweetheart deals.
Concerned Dearborn Resident
5:37 pm on Thursday, January 26, 2012
marooned in Dbn- Not a problem. There are many times that my anger over a situation makes me not see all the details. I do understand your frustration. I am very frustrated myself because I see a lot of waste with the Large administration and I am constantly getting hit up for money and fundraiser after fundraiser. I buy a lot to help support the school. I also have bought supplies for my son's teacher so that she would not have to. A lot of us parents help out and pay for as much as we can. But we can not make up for all of the money that the bloated administration takes up.
We all also need to realize that we need to invest in these children. They are our next generation and will one day be our doctors, lawyers, teachers, ect. We should all want them to do well and contribute tax dollar back into the system so that we as we age and retire can get SSI and partisipate in the Senior Citizen programs that they will be paying for.
Unfortunately there is so much waste in the school districts and Government for that matter! So I understand your frustration.
Jim Frost
9:47 am on Friday, January 27, 2012
c
Jim Frost
9:50 am on Friday, January 27, 2012
City and Schools are 2 separate government entities.
Board of Education members are not full time employees of the district and make about $10,000 a year. No extra money to attend meetings, no benefits, and no other compensation.
The pension rate is set by the state not the local school districts.
Since Proposal A was passed in the mid 90's schools cannot go to the voters to ask for money for operations. They can ask for money to fund projects such as new schools but cannot ask for tax increases to fund items like salaries or benefits.
Out of the approximate 1,100 non-instructional staff members around 85-90% live right here in Dearborn. If having these people make less money or, not have a job at all, sounds like a plan that would make this community better then perhaps turning these jobs over to the private sector is a good idea.
All staff members have taken concessions in pay (up to 8% in 2 years for many) and turned their health care into a program similar to that of the auto companies in order to save money and keep teachers in the classroom.
The district also has one of the smallest administrations for a district this size, please keep in mind that Dearborn is the fourth largest district in the state.
Is there room to save more money? Always! Does the district need to continue to control spending? Yes! But to paint a picture of this district as a bloated government bureaucracy that is out of control is inaccurate and wrong.
Concerned Dearborn Resident
12:03 pm on Tuesday, January 31, 2012
Jim Frost- I am going to assume and I might be wrong that either you or your spouse or someone very close to you works in the school district.
Sorry but the salries that are earned by the full time custodians that are at 35K+ is ridiculous. They clean. Then when you add in that they get the same Retirement % put away that makes it even MORE RIDICULOUS!!!!! I understand the teachers getting the % althought I think it going up to almost 30% is RIDICULOUS!!!! I can see 15% to 20% but not more then that.
How can you justify the Superintendent's Secretary making over 59K in 2011? Yes that is down from the roughly 63 to 64K it was in 2010. She is a secretary. Then when you add in her benefits and retirement and Social Security on top of the 59K she is again up over 90K. Sorry but again that is RIDICULOUS!!
As for having one of the smallest administrations please! As a parent I could not care if it is one of the smallest or not! It should be down sized even more in my opinion! In fact I am all for taking the administration duties of 4 to 6 school districts and combining them! Each district does not need their own HR department, or Payroll department, ect. With this combining of Administrations would not only save money but it would actually force the Administrations to give all Education making decisions on Curriculum to the teachers where it belongs!!!!!!!!
Concerned Dearborn Resident
12:12 pm on Tuesday, January 31, 2012
As a parent I want more $$$'s going into the classrooms then into some administrator or over paid Custodian's pocket! I have not looked over all the numbers from 2011 but in 2010 they paid to have Painters, plumbers,ect on staff. Sorry but those should not be on staff. They should have a contract with painters, plumbers, ect to pay only for their services when needed.
Also, Us parents are getting hit up EVERY WEEK for more money for the schools. It is very frustrating when you pay Federal Taxes, State Taxes, State Sales Tax, and Property Taxes to be constantly being hit up for more and more money. I do what I can to buy supplies for the classroom and partisipate in the fundraisers but at some point you have to do what is best for the students and NOT what is best for the overpaid Custodian! The district can not continue to afford paying 22+% into retirement funds for Custodians, Secretaries, Bus Drivers, Lunch workers, ect. This is why there is less and less money going into the classrooms.
To be honest I am all for getting rid of bussing children to school! Parents can have some responsibility in getting their kids to and from school. Plus at the elementry level they have before and after school care that the parents pay for or the parents can opt to car pool the kids to school, or have a relative to do it. The Transportation side of the budget is VERY LARGE and can do a lot of good in the classroom. They want buses for special events then that is fine!