Newaygo County RESA

STATE OF THE RESAApril 2011

Our mission to: Support    Education        Responsibly, through            Visionary                Innovative                    Cooperative                        Efforts

InstructionIncreased RigorSmartBoard Implementation & Professional Development

All Elementary Teachers Middle and High School Lead Teachers

Data to Influence InstructionCommon AssessmentsAcademic Interventions

CurriculumElementary

◦Social Studies ◦ELA Curriculum Development

Middle School◦6th Grade Science◦ELA Curriculum Development

High School◦Math Intervention◦ELA 12◦Financial Management

Grades 3-8 MEAP ScoresMATH

7189 93

2004 2008 2011

Grades 3-8 MEAP ScoresREADING

7387 91

2004 2008 2011

Michigan Merit Exam Percent of class that is proficient

65%56%

63%

90%

70%

57%

70%

87%

20092010

MATH SCIENCESOCIALSTUDIESREADING

Operations and PersonnelBond Projects Throughout the District

◦Roofs, paving, energy systemsStudent Records

◦Digitized records for better lookupEast China is The School of Choice

◦203 students in from other districts…. Only 37 going to other districts

Wellness Program◦Virgin Health Miles Program◦Rewards – over 175 employees

participating

Teacher Evaluation CommitteeEvaluate teachers/administrators annually using multiple rating categories and data on student growth as a significant factorMultiple ratings - Highly effective, effective and ineffective rubrics developedCommittee to make recommendation to respective bargaining teams so contract will comply with law.

Governor’s School Aid Proposal

Reduction 2010-11 - $300/pupilRetirement Rate 3.8 points -

$239/pupil

Reduction Projected - $539/pupil

Total cost to ECSD:

$2.5 million

Approved by HouseHB 4152Wages and benefits frozen during

contract negotiations (prohibiting step increases)

Any increase to health premium borne by employee

Prohibits retroactivity for wages or benefits

In House CommitteeHB 4306Requires school districts to bid out

support services including custodial, food service, and transportation

Other non-instructional services may be included as well including office and secretarial services

Emergency Financial Manager

Applies to school districts and citiesAllows EFM to be appointed by State

Treasurer after certain criteria are met

Big changes in this law give the EFM much more power to eliminate deficit including canceling collective bargaining agreements

Other ProposalsTenure – Eliminate or ReformReduce standard for discipline or dismissal

from just cause to arbitrary and capriciousEscrow salary instead of paid leave during

period waiting for tenure hearing

Health Premium Cost Sharing20% co-pay from employee$13,000 cap on employer share of

premium

What is Going On?More accountability than ever

Huge downturn in Michigan economy

Politicians and public do not believe K-12 education has sacrificed in

comparison to everyone else

Little credit is given for adjustments K-12 education has made

-16.0%-14.0%-12.0%-10.0%-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Michigan Per Capita Income Deviation From National Average

MICHIGAN IS 13.8% BELOW NATIONAL AVERAGE

US Dept of Commerce

What Does This Mean?The recession of 2001-2010

effectively “RESET” the income level of the average Michigan household.

Politicians do not believe the recession impacted the average ECSD or Michigan teacher/employee to the same degree

Comparison of IncomeMichigan Median Household Income2000 $44,6672009 $45,255 + 1.3%

East China MA Teacher Salary2000 $63,0442009 $77,034 +22.2%Michigan Data from U.S. Census Bureau, US Dept. of Labor

Comparison of Employer Cost of Employee Health

InsuranceUS Private Worker Increase2000 to 2009 +84%State/Local Government Worker2000 to 2009 +96%ECSD Teacher Increase2000 to 2010 +138%

US Dept. of Labor, Bureau of Labor Statistics

Comparison of Total Teacher Compensation

SALARY

FICA 7.65

%

Retire-ment

Health Dental Vision Total

2000

$63,044

$4,823

$7,313 (11.6%)

$8,067Full family rate

$83,247

2010

$77,034

$5,893

$15,915(20.66%

)

$19,200

Full family rate

$118,042

+22% +22% +118% +138%

+41.8%

Compensation and Funding

ECSD MA Step 10 Teacher2000 $83,2472010 $118,042 + 41.8%ECSD Per Pupil Funding2000 $6,6022010 $7,794 + 18.1%ECSD Funding with Enrollment2000 @5,613 = $37.1 million2010 @4,959 = $38.6 million + 4 %

How Have We Survived Without Matching Compensation to

Funding?Reduction of staffing by 31% across the district touching every area

Teachers Non-Teachers 2000 – 368 2000 – 214 2010 – 264 2010 – 135

Full Time Staff2000 – 5822010 – 399

Major Issues Facing ECSD

Declining Enrollment

Retirement Rate Charged by State

Health Premium Costs

Funding Provided by State

ECSD September Enrollment

PROJECTED

5,766 5,730 5,7175,612 5,589

5,5005,362

5,1715,072

4,9374,777

4,647

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

PROJECTED

Why Are There Fewer Students?

Michigan had153,000 live births in 1990 and 123,000 live births in 2007

25 to 35 year old population has been relocating to other states for jobs

ECSD graduates about 500 students and will have 300 kindergartners

We bring in Schools of Choice and transfers, but not enough to overcome discrepancy between graduates and kindergartners

Retirement Rate Skyrockets

11.66%

12.16% 12.17%

12.99%12.99%

14.87%

16.34%

17.74%

16.72%

16.54%16.94%

20.66%

24.46%

27.37%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Retirement Rate Factors

Active workers decline from 327,000 in 2003 to 242,500 in 2010

Litigation over 3% charge for health care2008 stock market meltdown

◦ Unfunded pension liability due to investment proceeds not meeting the projection

Cost of the 2010 retirement incentiveIncrease in retirees

◦ Over 167,000 retirees collecting pension◦ Average pension is $19,000

Health CareThis is a huge issue for the district and

employees$5 million annual cost to the district138% increase in premium since 2000

compared to 23.9% Inflation as measured by CPI

We have 183 fewer full time staff members, but the cost of health care premiums has gone from $3.7 million to $5.0 million

District Contribution to Teacher Annual Health Insurance Premiums

2009-10MESSA

2010-11MESSA

One Year

Increase

Full Family

$15,633 $17,614 +12.7%

2 Person $13,999 $15,782 +12.7%Single $ 5,827 $ 6,619 +13.6%

Average District Contribution to

Non-Teaching Staff Annual Health Insurance

PremiumsPriority Health

Comparison to MESSA

Full Family

$11,947 32% less

2 Person $11,198 29% lessSingle $4,895 26% less

Health Savings Account PlansHigh Deductible Health Plan coupled with a

Health Savings Account (HSA)HSA is similar to Flexible Savings AccountDeductible is owned by employee and

unused balances roll overSavings accounts are tax free and governed

by IRSDesigned for employees to manage their

health plan and its cost much more than the traditional health plan

Comparison to Private Industry

Nationally, the average monthly contribution to health insurance in 2010 is $75 single…$333 Family

This equates to 19% single coverage and 30% for family coverage

The employer pays $3,837 single $9,324 familyKaiser Family Foundation – Employer Health Benefits 2010 Annual Survey

2010-11 Staff Premium Contributions

Group

$ Per Month for Full Family Coverage

Percent of

PremiumCustodians $200.00 18%Secretaries $43.34 4%Paraprofessionals

$21.66 2%

Bus Drivers $40.00 3%Teachers $60.66 4%Directors $200.00 18%Administrators

$250.00 22.5%

Projected Financial Problems for 2011-12

State Funding Reduction $1,500,000

State Retirement Contribution Increase (3.8 points)

$1,000,000

Decline in Enrollment (160 students)

$1,247,040

Average Insurance Premium Increase (15%)

$750,000

Teacher Step Cost $281,245Federal ARRA Funds Eliminated

$473,000

Total Projected Financial Problem

$5,251,285

Current Fund Equity $5,667,866

Projected Financial Problems

for 2012-13

State Funding Reduction $0State Retirement Contribution Increase (3 points)

$727,000

Decline in Enrollment (130 students)

$974,220

Insurance Premium Increase $0Teacher Step Cost $0Federal EduJobs Funds Eliminated

$450,000

Projected 2012-13 Financial Problem

$2,151,220

We Will Not Be a Deficit District

2011-12 Financial Problem $5,251,285

2012-13 Financial Problem $2,151,220

TOTAL $7,402,505

Any deficit in the 2011-12 budget will add to the 2012-13 financial problem

The funding model imposed by the state of Michigan will force school districts to change the compensation structure for employees.

We Are In This Together We have managed this financial crisis for

the past ten yearsWe need to work together and continue

to be proactive – addressing issues early will help us stay in position to continue to thrive

We will not be discouraged, we are doing important work and we are valued by our community

What is Next?Displacement Process for Teachers April 27

Layoff Notice for Teachers May 6

ECSD Budget Hearing May 9

State Revenue Update for 2010-11 May 15

Bargaining with ECEA May….

State Aid Act Target Approval June

Questions?