Chippewa projects budget surplus of $1.2 million
MACOMB TOWNSHIP/CLINTON TOWNSHIP — Chippewa Valley Schools is in solid financial shape for the upcoming budget year, but district officials remain cautious about the future.
The Board of Education unanimously approved the district’s proposed 2013-14 budget at its regular meeting on June 17. The new budget, which will go into effect on July 1, features no significant cuts to school programs and no layoffs to the district’s staff of roughly 1,500 employees. It includes total projected expenditures of about $141.5 million and total projected revenues of about $142.7 million.
If those projections hold true, the resulting surplus of more than $1.2 million would be added to the district’s fund balance, which currently stands at about $16 million. According to Scott Sederlund, assistant superintendent of business and operations for Chippewa Valley Schools, financial experts recommend that school districts maintain a fund balance that amounts to between 10 and 15 percent of their overall operating expenditures.
The district’s debt millage rate, which is levied on all properties within the district, also remained at 7.65 mills for the upcoming fiscal year. However, Sederlund noted that although that sum has not changed in several years, it could be modified by the time property owners receive their summer 2014 tax bills.
Members of the school board thanked district administrators for their hard work in preparing this year’s budget and keeping the district financially stable.
“Our business office did a really nice job of putting this budget together,” said School Board President George Sobah. “It’s great to see our revenues exceeding our expenditures like this.”
Still, the board recognized that a number of sacrifices had to be made in order to get the district to this point. Trustee Frank Bednard pointed to the impact that Michigan Public Act 152, which has been in place since January 2012, has had on public school districts and their employees.
“It doesn’t get by us that a lot of these savings were achieved because of the hard cap on employee health care (benefits),” he said. “We fully realize that that has been a major factor in helping us lower our costs.”
In a subsequent interview, Superintendent Ron Roberts cited recent negotiations with the district’s labor unions as another big reason Chippewa Valley Schools finds itself on sturdy ground this year.
“We’re in relatively good condition financially, but it’s taken a lot of work by a lot of people to get our budget to where it is right now,” he said. “We’re very fortunate that our employee groups have stepped up and made that possible. Those negotiations really provided us with a sense of security and stability about the future and gave us something positive to think about as we move forward.”
Sederlund agreed. “We’re glad that we were able to reach agreements with all of our major unions,” he said. “There was some financial relief for the district that came out of it, but there was also some additional compensation for our employees to recognize the sacrifices that they’ve made in previous years.”
In March, the school board approved a three-year contract extension with its teachers union, the Chippewa Valley Education Association. The agreement is estimated to save the district about $2.4 million over that period, mostly due to the aforementioned hard cap on employee health care benefits. On the other side of that contract, teachers will receive a one-step increase in salary during the first year, which amounts to a 3.5 percent wage boost.
Later that month, the board supported similar contract extensions for the Chippewa Valley Support Personnel Association — which includes the district’s bus drivers, custodians and other support staff — and the district’s secretarial and paraprofessional unions, which are both represented by the American Federation of State, County and Municipal Employees. Wages for support staff and paraprofessionals were restored to their 2011 levels, which will result in a 1.25 percent increase for the former and a 4 percent increase for the latter. Secretaries will receive no pay increases but will get a decrease in the number of annual furlough days from five to one.
Another positive development in this year’s budget was the level of funding from the state of Michigan. In recent months, Chippewa Valley administrators had been concerned about a potential reduction in the district’s foundation allowance, which currently amounts to $7,168 per student and constitutes the vast majority of its revenue. Sederlund noted that the district had originally been preparing for a cut of up to $45 per pupil this year; instead, he and his colleagues were surprised when the state’s final education budget included a $60 increase.
“Based upon the original proposals from the state,” he said, “we were anticipating a slight decrease in our foundation allowance. But then at the 12th hour, we received some good news from them about our funding.”
Sederlund added that Chippewa Valley Schools is budgeting to receive additional revenue from the state’s “best practices” financial incentives, a high school student performance grant, a one-time equity payment and other areas. When all the numbers are calculated, the district should end up with a total increase of about $75 per student — or greater than $1.2 million overall — compared to 2012-13.
Still, Roberts is disappointed by what he views as a lack of reliable support from Lansing. He pointed out that even with this year’s increases, his district is still about $240 per student below where it was four years ago and about $800 below the Macomb County average.
“This is a nice start, but it’s something that needs to continue on a consistent basis,” he said. “We’re still not really seeing a strong commitment to public education by the state. We need to improve our academic performance, and that’s hard to do when we’re receiving less funding than we used to. It’s been very difficult to plan and prepare for the future when our primary funding source is so unpredictable.”