GPPSS BOE narrows superintendent field

Larry Lobert, consultant with School Exec Connect, addresses GPPSS Board

Larry Lobert, consultant with superintendent search firm School Exec Connect, addresses the GPPSS Board

The next superintendent of the Grosse Pointe Public School System will be either Dr. Gary Niehaus or Dr. Steve Matthews.

This was the conclusion after last night’s Board of Education meeting at which the third finalist, Mr. Matthew Wandrie, was eliminated from consideration.

In an hour long meeting marked by civil exchanges the consensus pointed to Niehaus having the edge given that he appeared to have been a top choice of all seven trustees. In fact two trustees, Judy Gafa and Dan Roeske, at first named just Niehaus as their finalist and not even a second, but both later supported a motion by Ahmed Ismail to move Matthews and Niehaus forward as the two finalists.

That motion passed 5-2 with the dissenting votes coming from Lois Valente and Brian Summerfield. Interestingly both Valente and Summerfield advocated for Wandrie as their lead finalist and thus their dissenting vote. Neither had Matthews as a finalist.

This is noteworthy as we try to determine a front runner. To the extent this Board does have a center, Valente and Summerfield are it. With their support and that of the other five trustees, Niehaus has a wider and more firm base of support. This is also relevant given the strong likelihood that the Board will want a unanimous vote to appoint the next superintendent given the strain induced by the last selection – an infamous 4-3 vote for former superintendent Dr. Tom Harwood.

The support for Wandrie, current superintendent of Lapeer Schools, seemed to rest on his charisma and frequent reference to innovation. The Board’s comments betrayed a tension between hesitance for broad-based change and the drive to innovate. This was in odd juxtaposition to frequent reference by many board members to “good being the enemy of great.”

That catch phrase is the product of the Jim Collins book, Good to Great, which cautions “good” organizations to avoid complacency. A common strategy to address this is indeed innovation.

Putting that altogether, this tension would seem to further support Niehaus’ candidacy, as clearly Matthews is the more traditional, and thus “safe”candidate. He’s better known to the Board and was once himself a trustee on the GPPSS Board of Education – ironically losing his seat to Ismail (during his first successful run for the Board) and Angela Kennedy.

As a side commentary, it is odd that there would have even been an effort to narrow the field. The upside of reducing options is not evident – particularly when the one eliminated was the top choice of two trustees. But perhaps this points to the desire to have a unanimous choice for the finalist – in which case Dr. Gary Niehaus has to be considered the prohibitive favorite.

More details on the search process and timeline can be found at

Stay tuned.

The simple math of GPPSS budgets

These charts will help readers understand the relationship between how much the Grosse Pointe Public School System spends per pupil – and where that money goes – and the ultimate effect on fund balance (or fund equity).

This first chart shows the basics. If we spend above 100% of what we receive in revenue per pupil, the district will run an annual deficit. No shocker there, but sometimes we lose sight of this basic truth.

I highlight three examples in the chart below:

  • In 2007, the district spent about 96% of its revenue and ran a $4 million surplus.
  • In 2009, the district spent 100% of its revenue per pupil and had no change in fund balance.
  • In 2012, the district spent 108% of its revenue per pupil and ran a $7.6 million deficit.

Spend Percent and Fund Balance

So now let’s look at a couple charts that show where that spending per pupil is going. Here’s a simple view showing percentage spend by instructional (general education and special needs education) and non-instructional (administration, business services, instructional support and transportation).

Instruct and Non Spend Percent

In 2009, the total instructional and non-instructional spend was about 95% of the total spend. In 2012 that number grew to 106%. A balanced budget of 2009 grew into a $7.6 million deficit as the proportional spend on instruction increased from 63% to 70% of revenue and non-instructional spend increased from 32% to 36%.

So what constitute instructional and non-instructional expenses? As the chart below shows, it’s mostly salary and benefit costs.

Salary and Benefit PercentWhat this tells us in that in years that the GPPSS ran balanced budgets or even moderate annual surpluses, the percentage of spend that was allocated to salaries and benefits ranged from about 82% to 85%. The years where the district spent more than 85% on salary and benefits (2010, 2011, 2012 and 2013) it ran an aggregate deficit of $18 million – a four year span that saw fund equity drop from $20 million to $2 million.

We see now that last year, where salary and benefit costs accounted for 83% of total revenue per pupil, the district ran a $3.7 million surplus. As a result, fund equity will gradually return to 10% within the next couple of years.

To go a layer deeper, the benefit that caused the greatest problem has been state mandated retirement costs. This chart shows its rising consumption of our state aide per pupil:

MPSERS as percent

In the end, the simple math is that districts like the GPPSS get only so much revenue per pupil. Expenses of all types must be managed to stay within that envelope – and the largest expense will always be salary and benefit costs.

When that simple math is ignored, the district runs a deficit and all kind of bad things ensue.

The good news now is that equilibrium has been re-established and the district has maintained very competitive compensation with favorable class size and student offerings.

Despite recent cuts, GPPSS salaries remain competitive


Avg Teacher Salary

The State of Michigan recently published updated financial information for all Michigan public schools and charter schools. I will be updating my Financial Benchmark Report shortly, but wanted to share this quick chart to show the change in average teacher salary for the Grosse Pointe Public School System as well as Birmingham and Bloomfield Hills Schools against the State of Michigan average.

The 2013-14 school year will prove to be the year with the largest salary schedule drop for the GPPSS and the results show an average 3.9% aggregate decline in teacher salaries.

As I always like to point out, this reflects a change in the average – not an across the board flat change. Many factors influence the average. Even though the salary schedule was reduced across the board, year over year changes in step and lane increases also affect the average.

Of equal importance to the average, on a year over year basis, the GPPSS employed 17 fewer teachers in 2013-14 versus 2012-13. Commonly as the number of teachers decreases, if teachers retire and are not replaced, this will drive the average down as well.

In comparison to the state, the GPPSS still ranks very high in average teacher salary. Among the 541 traditional public schools, GPPSS ranks 14th highest – one slot ahead of Birmingham schools. Both GPPSS and Birmingham average teacher pay is 21% higher than the state average and 7.6% higher than Bloomfield Hills.

I’ll close for now with the brief reminder that this entry and comments about teacher salaries are not intended to claim anyone is overpaid or not worthy of their salary. It is presented merely as a point of reference as districts struggle to maintain financial equilibrium with changing state aid and state mandated retirement costs.

We can be certain that now as the two most recent teacher contracts have run their course to return the district to 10% fund equity that the GPPSS salaries remain among the best in the state.


Enrollment trends challenge conventional thinking

Picture of the original design of Mason Elementary hung in their front hallway

Picture of the original design of Mason Elementary hung in their front hallway

Last week I published a blog that again pointed to the ongoing problem the Grosse Pointe Public School System faces in student enrollment. It had more views than many of my posts and I read some interesting comments that encouraged me to go a layer deeper on the data analysis.

Here’s a slide deck I created to share some of the pertinent views.

Despite a loss of over 1,000 students since 2005, and an expectation that enrollment might stabilize, the future looks equally troubling.

Elementary enrollment is decreasing at a rate four times greater than the secondary level. As those losses work their way toward the secondary level, aggregate enrollment will continue to drop.

Imbalance across the district is also striking, but perhaps unexpectedly. South High School feeder schools enrollment loss is occurring at a rate three times greater than North High School equivalents. If these trajectories hold, and it looks like they will, the once nearly 400 student gap between the high schools will close over the next couple of years.

A couple highlights on that front. If next year’s projections hold true, Defer Elementary, a major South feeder school, will have lost over  one-third of its enrollment since 2003. It will have a mere 19 more students that Trombly.

Meanwhile on the north end, Mason Elementary has been the only elementary school to experience an increase in enrollment from 2003 to 2014. Fellow North High School feeder Poupard Elementary is tied with Kerby as having second best enrollment trend in this same time period – even if it is a 2% loss. That is still significant because it is so much less than the district’s overall loss rate.

The only thing I like about this data is that it will challenge the overly simple, and really  misinformed, view that school test scores are the major driver in enrollment. The data doesn’t support that conclusion.

I also think the magnitude of the enrollment reductions cannot be attributed to private school enrollment or the half-day kindergarten issue. These trends are very clearly population based. In ensuing posts I hope to cross reference this enrollment data against census data to get an even better view.

The implications for budgeting are significant. District administration will need very tight projections by school and grade level, balanced against class size guidelines, to make the staffing decisions that are required in April. Missteps here can introduce major budget challenges.

GPPSS projects significant enrollment drop

If Assistant Superintendent Chris Fenton’s projections for the 2015-16 school year come to pass, the Grosse Pointe Public School System’s General Education student enrollment will fall to its lowest level since 1993.

That date is significant as it preceded the state’s landmark school funding overhaul, 1995’s Proposal A, among whose most significant characteristics is that district revenue is tied directly to student enrollment.

The GPPSS enjoyed the ride since Proposal A’s passage. In 1993, the General Education student enrollment was 7,680. It rose steadily from that time hitting a high water mark of 8,930 in 2005. But it’s been all down since then, reaching 7,914 this year and then a projected drop to 7,760 next year.

That drop from 8,930 t0 7,760, if it were to come to pass, represents an annual revenue loss of nearly $12 million since the GPPSS receives about $10,000 per pupil in revenue.

The only good news about that kind of drop is that it has been gradual and the district’s response to that kind of revenue loss has generally been staff level reduction. Historically, teaching staff reduction has been roughly proportional to student enrollment. Non-teaching staff reduction has been much more steep.

It is true that the GPPSS enrollment reduction is directionally consistent with Michigan population, but not as bad. From 2004 to 2013, Michigan’s student population has dropped about 12% while the GPPSS has dropped just over 6%. This student population drop has been a statewide phenomenon and was one of the big drivers for the growth in School of Choice programs – as districts competed with each other for a more scarce resource – students.

The GPPSS famously has not, and will not, be a school choice participant, but that factor alone cannot completely account for its drop in enrollment in contrast to other similar districts.

Select District Enrollment Trends

As the chart on the left shows (please click to enlarge), among the GPPSS, Birmingham, Bloomfield Hills, Northville, Rochester and Troy Schools, Grosse Pointe and Bloomfield are the only two whose enrollment has dropped from 2004 to present.

I have highlighted the contrast to Birmingham before. In 2004, the GPPSS had 1,000 more students than Birmingham. Today Birmingham enrollment is greater than GPPSS. Birmingham has not relied on School of Choice to increase enrollment.

Bloomfield has been more like GPPSS, in fact far worse. Within the last few years, after a protracted and divisive battle, Bloomfield closed one of its two high schools.

This is the kind of issue that requires a great deal of analysis – and probably more than the district has undertaken. But at least among the statewide data and in contrast to Bloomfield and Birmingham Schools, we cannot fairly pin the GPPSS’ enrollment drop on any one thing – and probably not even on just the school system itself.

Yes, great schools can and do attract families. But of course the schools in Bloomfield are outstanding – and I generally think GPPSS are very good schools. Birmingham and Northville are examples of communities that are solving this riddle. The Grosse Pointes have some work to do.


10 observations on proposed Michigan School Aid Fund budget recommendation

Capitol Building, Lansing, MI

Capitol Building, Lansing, MI

If it’s been a while since you familiarized yourself with state spending patterns and state school spending in particular, I suggest reviewing the State of Michigan House Fiscal Agency report embedded below along with one published by Gov. Snyder’s office, available here.

Here are my top ten observations prompted by my review of these two presentations, along with my previous years of analysis of state and local education budgets.


  1. The state has two primary funds; the General Fund (GF) and the School Aid Fund (SAF). The 2014-15 proposed General Fund totals $10.1 billion. Of that a mere $115,000 goes to the SAF. The SAF itself totals $12.3 billion – 20% higher than where state budget money goes to fund everything else but schools. Nearly 97% of the SAF goes to K-12 funding.
  2. Sales Taxes are the largest revenue source for the SAF – accounting for 46% of its total. Next highest source is Income Tax at 20%. Property Taxes, in the form of the State Education Tax, accounts for 15% of the SAF.
  3. SAF budget appropriations have increased every year since 2012, but the vast majority of those increases (almost all of it) has flowed to offset the underfunded Michigan Public School Employee Retirement System (MPSERS).
  4. In real dollars, Michigan’s SAF appropriations are down 7% from 2006 levels ($13.9 billion vs. $14.9 billion); however, student enrollment is down 11% in the same time (1.7 million to 1.51 million). So why have we struggled so much financially? One word – MPSERS.
  5. The proposed SAF budget is at its highest level since 2005. The controversy surrounding whether this is a true increase is based on such an increasing percentage flowing to MPSERS.
  6. MPSERS now accounts for 6.4% of the SAF budget and ever increasing portions of local school budgets. In 2014, 13.4% of the Grosse Pointe Public School System’s total General Fund budget was spent on MPSERS expense. Ten years ago it was about 8%. That’s about a $5.5 million increase in cost to fund legacy costs.
  7. From 2013 to 2018, the SAF is projected to grow by $2.2 billion – again reinforcing how Proposal A works well when the economy is stable and growing. But half of that revenue growth is earmarked to reduce MPSERS unfunded liability. In next year’s state budget alone, GP Schools would have been obligated for an additional $200 per student – or over $1.6 million – in MPSERS cost increase if the state did not defray that cost. This is a huge shift in how Michigan is better managing school budgets.
  8. The MPSERS reforms passes in 2012 have already reduced the unfunded liability from $47 billion to $31 billion.
  9. The proposed 2016 SAF budget with its $815 million allocation to pay down MPSERS liability translates to $600 per Michigan student. The 2012 reforms translates to $475 per student totaling $1,075 per each Michigan student. Without these reforms and investments, a district like Grosse Pointes’ would have seen $8 million in increased cost.
  10. Over the last couple of years, and into the next decade plus, local school districts will have been required to budget an incremental 25% of total salary costs to fund MPSERS. With all these reforms and pay-downs, that rate will decrease to less than 5% in 2039.

The summary, if I didn’t flog the dead horse above briskly and frequently enough, is similar to what I said so many times when I served on the Board of Education: MPSERS has been the beginning, middle and end of most of the economic trauma. It proved to be an unsustainable expense and the 2012 reforms and other Snyder administration budget and policy decisions are proving to address the root cause issue.

GPPSS budget surplus proves capacity for tech funding

Last week the Grosse Pointe Public Schools received the independent financial audit for the 2013-14 school year. I have prepared an analysis of the audit in the slide deck embedded here.

The 2013-14 financial year was particularly critical because it began with just $2 million in fund equity. Also the district ran a $3.5M deficit in 2012-13. The 2013-14 audit shows a dramatic turnaround. Here are some highlights from the 2013-14 audit:

  • The district ran a $3.7M budget surplus when it had expected to run a $2M surplus. This ended a four year run of annual deficits that saw fund equity lose over $18M (details on how here.)
  • Compared to the previous year, 2013-14 revenues came in $464,000 higher and expenses dropped by $7.8M – undoubtedly the single largest annual expense reduction the district has ever seen. This puts the district a year ahead of schedule in the quest to return to 10% fund equity.
  • If the district could maintain expense controls in the current year (2014-15) consistent with last year, fund equity could increase by $4M and fund equity would end 2014-15 at 10% – two years ahead of schedule.

Bottom line for now: There is more financial capacity in the general fund than had been expected. The knock on effect is that the district now has a budget source to continue to address technology issues – including looking at cloud based services and leasing which will have no capital investment requirements and would not be allowed in a bond based funding model.

It would not be unreasonable to earmark $1M in additional general fund budget annually to make great strides in this area. Any further talk of a tech bond should be received with very healthy skepticism. (For reference, see my post on addressing district technology needs without a tech bond.)

GPPSS fund equity increase more than expected

The Board of Education Building at 389 St. Clair

The Board of Education Building at 389 St. Clair

In the Grosse Pointe Public School Systems’ annual financial audit for operations ending on June 30, 2014 (last school year) the district’s General Fund Equity had been expected to finish at $4 million or about 4% of total expenditures.

The audit shows that fund equity ended at $5.7 million or 6% of expenditures, which were $1.7 million less than the final budget for 2013-14 and the main reason why fund equity increased more than expected. The ending fund equity then is 142% above the anticipated levels.

This is significant, and welcome, news as the district is now a year ahead of original schedule in its return to 10% fund equity levels and changes the dynamic relative to concerns about inability to make certain necessary investments.

More analysis to follow shortly. The full audit is available here.

GPPSS millage patterns worth noting

This month the Grosse Pointe Public School communities renewed two millages that constitute about 25% of the district’s operating budgets. The Hold Harmless (referenced in below as “HH”) represents about $23 million in annual revenue. The Sinking Fund (“SF”) delivers about $2.5 million. They are both important, but clearly losing the HH would be far worse than losing the SF.

The 2014 renewals generally reflect the community understands their importance. Each of the six voting communities passed both at similar proportions within their cities, but oddly the SF passed at a slightly higher overall rate than the HH millage.

Also worth noting is the higher passage rate of the millages in the City, Farms and Park in comparison to the Woods, Harper Woods and the Shores. The City’s passage rate of the HH was a 15.7% percentage points higher than the Shores.

2014 Both Millages


The pattern was different in 2009 when the HH received stronger support than the SF.

2009 Both Millages

As we look at the comparison of the HH elections from 2009 to 2014, the gradation across the cities follows the same pattern, but more noteworthy is a significant reduction in the overall passage rate, that dropped from 77.4% in 2009 to 70.5% in 2014.

GPPSS HH Millage Only

Oddly the SF did not experience the same degradation of support from 2009 to 2014 with both years showing a near identical passage rate.

GPPSS SF Millage Only

Between this comparison and the otherwise proportionally consistency across the communities, there was something about the HH millage question this year that induced a decrease in support.