Birmingham Public Schools Board Presentation February 2, 2010

Budget Development Guiding Principles 1.Prioritize Classroom Instruction 2.Support the Implementation of the Strategic Plan 3.Adapt/Restructure Instructional Support Programs 4.Ensure the Financial Stability of the District

School Funding Update

State School Funding Update : 1.On October 20, 2009, the Governor formally signed the State School Aid Act which included a mid-year budget reduction of $165/pupil in foundation allowance ($1.3M for Birmingham Pubic Schools). 2.The Governor also line-item vetoed Section 20j funding for Hold Harmless School Districts ($1.0M additional for Birmingham Public Schools). 3.On October 22, 2009, the Governor notified the legislature of an additional $127/pupil reduction in foundation allowance to balance the budget, delayed implementation, then rescinded officially on January 11, Stay tuned for the May 2010 Revenue Estimating Conference! BIRMINGHAM PUBLIC SCHOOLS BOARD OF EDUCATION FEBRUARY 2, 2010

Mid-Year Budget Actions… 1.Implement a hiring freeze for all vacant positions 2.Freeze all spending on District purchases, except those necessary for safety and functionality 3.Eliminate all non-emergency staff overtime 4.Restrict all capital outlay projects, except those funded with remaining bond proceeds 5.Continue to aggressively implement energy management policy, including “pay to plug” program 6.Continue to implement travel and conference guidelines, including new pre-approval form

BUDGET SENSITIVITY DATA GENERAL FUND Sensitivity Examples BaseChangeAmount 1 FTE = $ 8,600 Enrollment8,053 FTE'S10 FTE = $ 86,000 $50/pupil = $ 402,650 State Aid Foundation Grant $ 11,644$100/pupil = $ 805, % = $ 367,700 Salary Changes $ 58,694,9801.0% = $ 735, % (0.80%+) = $ 58,700 Retirement Rate Changes17.64%(0.70%+)17.94% (1.00%+) = $ 176,100 1% = $ 137,250 Health Insurance $ 14,410,7112% = $ 274,500 1% = $ 46,400 Utilities $ 4,643,85010% = $ 464,400

Budget Development Plan Expense Reductions TotalInstructionalSupport $ 721,550 $ 276,500 $ 445, $ 3,854,786 $ 2,078,750 $ 1,776, $ 3,381,390 $ 2,551,500 $ 829, $ 2,939,572 $ 2,189,462 $ 750, $ 2,659,950 $ 1,760,000 $ 899, $ 2,317,494 $ 1,503,250 $ 814, $ 3,869,582 $ 237,872 $ 3,631, $ 3,063,675 $ 1,702,044 $ 1,361,631 TOTAL $ 22,807,999 $ 12,299,378 $ 10,508, Budget $ 105,147,340 $ 81,860,416 $ 23,186,924 % Cut22%15%45%

Feedback from ….

Community Conversations 1.Consolidation of services or programs 2.Concessions in compensation and benefits 3.Reducing or eliminating transportation 4.Pursuing sponsorships and advertising 5.Strengthening energy management 6.Expansion of pay to participate to extra-curricular activities

Faculty, Staff and Retirees 1.Use of fund equity 2.Reduce or eliminate transportation 3.Increase rental of facilities 4.Increase and expand pay to participate fees 5.Investigate sponsorships and advertising 6.Expand open enrollment options 7.Provide more tuition based programs

Faculty, Staff and Retirees 8.Add a sinking fund ballot proposal 9.Investigate 4-day work week, shorter school year 10.Reduce administrative levels and costs 11.Investigate and lower costs of programs 12.Eliminate secondary classes with small enrollment 13.Review cost and use of substitute teachers 14.Review delivery of professional development

Work Areas to Review….

Restructuring Programs and Services Concessions from Staff Use of Fund Equity Lobbying Lansing Partnering with BEF and Parent Groups Energy and Asset Management Generating Revenue

Preliminary Reductions and Restructuring...

Budget Development Plan (BDP) 2010/11 ActionSourceBudget Amount Staffing Impact (FTE) Restructuring Business Services Business$664, Reviewing Transportation routes for both public & non-public Transport.$166, Eliminating Building & Site transfer from the General Fund Bldg & Site$1,064, Transfer Cash Flow Stabilization interest CFS Fund$30, Implement Energy Management program, including the “Pay to Plug” program Facilities$ 250, Elimination of one AD position and restructuring of secretarial support. Remainder of reductions based on Athletic Advisory Committee recommendations for reorganization of game/event management, reductions in equipment and transportation and changes in pay to participate fees Athletics$277, Transferring Community Service Organizers (CSO) salaries to the local council funds Community Education $ 250,

Budget Development Plan (BDP) 2010/11 ActionSourceBudget Amount Staffing Impact (FTE) Reduction in Unemployment Costs Human Resources $ 100, Reduction in Workers’ Compensation Costs Human Resources $ 110, Reduction in Administrative Team salaries Executive Administration $51, TOTAL $2,963,2409.0

Budget Development Plan (BDP) 2010/11 SUMMARY SUMMARY OF REDUCTIONS & REVENUES Total Projected Deficit for $8,076,021 Less Preliminary Reductions/Restructuring$2,963,240 REMAINING BUDGET DEVELOPMENT PLAN (BDP)$5,112,781 Pending Issues: Remaining Budget Development Plans Use of Fund Equity Contract Negotiations

Additional Reductions and Restructuring...

Budget Development Plan (BDP) 2010/11 ActionSourceBudget Amount Staffing Impact (FTE) Restructuring professional development Educational Services $25, Reviewing High School staffing needs Educational Services $210, Reviewing Middle School staffing needs Educational Services $140, Reviewing BCS (Birmingham Covington School) staffing needs Educational Services $100, Restructuring Project 2000 program services Educational Services $ 40, Reviewing Elementary School staffing needs Educational Services $420, Instituting a “Pay to Participate” fee for student activities Educational Services $50,

Budget Development Plan (BDP) 2010/11 ActionSourceBudget Amount Staffing Impact (FTE) Restructuring Middle School administration Educational Services $140, Increasing the fee for BCS Choice Hour activities Educational Services $50, Expanding the Tuition Enrollment Program (TEP) Educational Services $520, Eliminating the Cable Playback Technician position Technology$45, Eliminating a Technology Operational Assistant position Technology$ 45, Increasing teaching time for Department Chairs Instruction$140, Consolidating services for Environmental Education Instruction$200,0002.5

Budget Development Plan (BDP) 2010/11 ActionSourceBudget Amount Staffing Impact (FTE) Restructuring Elementary Support Services Instruction$315, Restructuring Instructional Department administration Instruction$100, Implementing Service Plans for Non-Public Schools Special Education $100, Contracting Noon Aide positions Human Resources $20, Contracting Paraprofessional Substitute positions Human Resources $10,000TBD Reviewing Substitute Teaching costs Human Resources $30, TOTAL $2,700,

Budget Development Plan (BDP) 2010/11 SUMMARY SUMMARY OF REDUCTIONS & REVENUES Total Projected Deficit for $8,076,021 Less Preliminary Reductions/Restructuring Less Additional Reductions/Restructuring $2,963,240 $2,700,000 REMAINING BUDGET DEVELOPMENT PLAN (BDP)$2,412,781 Pending Issues: Remaining Budget Development Plans Use of Fund Equity Contract Negotiations

Budget Development Timelines

BIRMINGHAM PUBLIC SCHOOLS BOARD STUDY SESSION FEBRUARY 2, 2010 DateActivity November Collect financial data, staffing, finalize enrollment forecasts, etc. December 2009Continue to compile restructuring/repurposing information January February 2010 Present final forecast; budget development targets Amend current fiscal year results (June 30, 2010) Review preliminary budget reductions/revenue enhancements January 2010 – March 2010 Prepare preliminary budget, review forecast assumptions Continue to gather feedback, restructure and repurpose budgets TentativelyCommunity Conversations March 23 and 25

BIRMINGHAM PUBLIC SCHOOLS BOARD STUDY SESSION FEBRUARY 2, 2010 DateActivity March 2010Review budget progress Release staff allocations based on enrollment, restructuring/repurposing March Disseminate preliminary budget and impact information to May 2010the staff and community Receive feedback and modify where appropriate May 2010Update taxable value information Finalize budget development process and review preliminary budgets June 2010Public Hearings on budgets and millages Adopt budgets and millages

Budget Development Guiding Principles 1.Prioritize Classroom Instruction 2.Support the Implementation of the Strategic Plan 3.Adapt/Restructure Instructional Support Programs 4.Ensure the Financial Stability of the District

Summary Points We have been good fiscal stewards. We are facing a significant problem over the next two years. Although the financial problems will cause us to restructure, we will continue to provide a first-class education