The Grosse Pointe Public Schools Board of Education will approve the 2014-15 budget tonight in a form largely unchanged from my May 18th analysis. Some highlights based on the various financial available on the district’s budget website:
- Revenue is increasing by 0.5% most largely attributable to a $50 per pupil increase in state aid per pupil.
- Expenditures increase by 1.5% ($155,000) due mainly to a $500,000 increase in expenditures for Computer Technology. (This is on top of the $1.1 million flowing to technology in the 2014-15 Sinking Fund budget).
- Total employee compensation costs (salary and benefits) drops by 0.5% in total, however…
- Average total compensation per employee increases by 4.3% due mainly to an increase in retirement investment by the district on the employees’ behalf. Total average retirement investment by the district per employee will be $15,727.
- The aggregate drop in total compensation costs is attributable to a reduction of 8.5 full time equivalent staff (from 876.7 to 868.3). Of these 8.5, only 2.5 are teachers, the rest are various other staff categories.
- The district will run a $2.25 million General Fund surplus, increasing on the $2.0 million surplus it ran in 2013-14.
- Fund Equity will increase to $6.2 million or nearly 6.5% by the end of 2014-15 and is projected to breach 10% by the end of 2016-17.
Much continues to be made of the Fund Equity measure of a district’s financial health. I addressed this issue in depth in a June 2012 post on the topic that is worth revisiting.
The district’s budget narrative makes note, accurately, that “the more (fund) equity a district has, the less short term borrowing a district has to do for cash flow purposes.” It’s worth noting the district reports total annual Interest Expense for 2014-15 of $220,000, or 0.2% of the total budget. This is a small price to pay for maintaining district standards through the financial downturn.
The district’s bond rating remains a strong AA- and the district is quick to note that they are “confident that the rate will increase as our fund equity increases.”
Time continues to show the financial strategy of leveraging a strong fund equity position to return structural balance to the district budget has worked well. Our employees remain very well compensated. The ratio of pupils to teachers is a mere 2% higher than it was 8 years ago. No schools were closed, no staff outsourced, no school of choice policy adopted.
In short, the 2014-15 budget is essentially a roll-over budget. It has very little variance to preceding years and applies increased state aid to technology.