gppss and state fund equity analysis 2013
TRANSCRIPT
Michigan Public School Districts and GPPSS Fund Equity AnalysisBRENDAN WALSH - WWW.BRENDANWALSH.US
FEBRUARY 1, 2015
ww
w.b
rend
anw
alsh
.us
2
Disclaimer and notes
This report and those like them are developed by the author alone.
The author has no official affiliation with the Grosse Pointe Public School System (GPPSS) other than as a resident, taxpayer and parent of students.
All data used in this report are from the State of Michigan and GPPSS publicly available data.
About the author:
Brendan Walsh served on the Grosse Pointe Public School System Board of Education from 2005 to 2013.
He served as President from 2006 to 2008, Vice President in 2009, and Treasurer from 2010 through 2013.
He resides in Grosse Pointe, Michigan and maintains a website where he writes about issues relating to the GPPSS.
www.brendanwalsh.us
ww
w.b
rend
anw
alsh
.us
3
Introduction
Traditional Public School Districts mean non-charter schools.
No charter school data are referenced in this report.
All data used herein is in reference to all districts’ General Fund only.
Fund Equity percentages are stated as a percentage of districts’ General Fund Expenditures and Transfers
Years stated indicate the financial year ending that year (e.g. 2013 refers to the 2012-13 school year).
For more information on GPPSS financial performance in the 2013-14 budget year, please review my previous analysis.
www.brendanwalsh.us
4Statewide distribution of districts by annual revenue (550 total)
Detroit $100M to $250M $50M to $100M $25M to $50M $10M to $25M $5M to $10M <$5M0
20
40
60
80
100
120
140
160
180
200
1
21
37
90
189
112
100
GPPSS Category
$700M+
www.brendanwalsh.us
5Average Fund Equity of statewide district categories by revenue
Detroit $100M to $250M $50M to $100M $25M to $50M $10M to $25M $5M to $10M <$5M
-12.9%
8.9%
5.9%7.5%
11.3%
13.4%
17.4%
$700M+
GPPSS Category
Explanation: Of the 37 districts with annual revenues between $50 and $100 million, the average fund equity is
5.9%.
www.brendanwalsh.us
6Dramatic changes from 2005 to 2013(data for all MI school districts)
2005 2013
$14.4 $13.5$14.3 $13.6
Total Annual Expenses and Revenue (in billions)
Revenues Expenditures
2005 2013
$1.8
$1.1
Ending Fund Balance – All LEA Districts Total (in bil-
lions)
$736 million
drop
• 12.6% avg. Fund Equity
2005
• 7.9% avg. Fund Equity
2013
GPPSS General Fund Expenses and Revenues 2005 to 2014
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$95.5
$103.2
$106.0
$100.8
$104.2
$103.0
$95.4
$96.3
$107.2
$100.1
$96.6
$99.2
Total Expenses and Transfers Total Revenuewww.brendanwalsh.us
7
$3.7M actual surplus in 2014
$2.2M surplus budgeted in 2015
Numbers in millions
www.brendanwalsh.us
8GPPSS Fund Equity – 2005 to 2014
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* 2016* 2017*
16.5%
14.0%
18.0%
19.7% 19.4%
16.6%
14.0%
6.0%
2.0%
6.1%
8.3%
10.9%12.3%
2013 State Avg. for all MI districts (7.8%)
*GPPSS Projections
2013 Avg. for districts of GPPSS size (5.9%)
www.brendanwalsh.us
9Various Statistics
In 2013, 61% of state districts ran deficits.
43 districts (7.5% of all) have a negative fund
balance
Districts that ran deficits in 2013 consumed $269M of fund equity in aggregate.
211 districts ran a surplus in 2013 adding a total of
$129M back to fund equity.
In 2013 among 37 districts similar in size to GPPSS
($50M to $100M) only 15 have Fund Equity above
10%.
13 of those ran deficits in 2013. The average deficit among them was $1.2 M.
The average fund equity among all 37 of the
districts is 5.9%
GPPSS’ 2014 fund equity is 6.1%. - will exceed 10%
within 2 years.
GPPSS’ $3.7M surplus in 2014 would rank 7th
highest on the 2013 list.
The projected 2015 surplus of $2.2M would rank 12th
highest 0n 2013 list.
Only 12 districts ran a deficit in 2013 greater than
GPPSS’ $4.2M.
In GPPSS, the operational turnaround from 2013 to
2014 was $7.9M.
www.brendanwalsh.us
10Summary
Statewide data shows that a clear majority of Michigan districts continue to struggle with financial challenges of the Lost Decade.
Aggregate fund equity reductions (12.9% to 7.8%) from 2005 to 2013 show most districts have not reduced expenses commensurate with their revenue loss.
With 61% of districts continuing to operate at annual deficits, most districts have serious cost cutting efforts ahead of them.
GPPSS’ cost reductions enabled via the employee contracts of 2010 and 2013 are rapidly replenishing the fund equity losses of 2008 to 2013. (Full summary of these can be found here.)
With a $3.7M surplus in 2014 and a $2.2M projected surplus in 2015 (and beyond), GPPSS continues rapid return to financial strength.