Budget Considerations and Outlook for 2022-23 and Beyond

To: All BHS Staff

From: Pat Watson, Superintendent

Date: October 6, 2022

RE: Budget Considerations and Outlook for 2022-23 and Beyond

Since March 2020, it has been a district-wide all hands on deck approach to ensure learning continues, from virtual to returning in person, with additional support, while keeping students and staff safe. A result of doing so has been unsustainable increased spending.

As we progress into this new school year, together we will need an all hands on deck approach to thoroughly examine our spending habits to reduce expenditures throughout the district. As a team, we must collectively reduce our operational spending. Together, we have reduced spending before, and together, we will do it again.

How you can help

For those that are seasoned BHS staff, please help newer BHS staff with ways in which we can reduce spending this school year.

Continue to focus on essential purchases only, in other words, student learning is the priority. Significant budget balancing targets continue and every dollar counts. Connect with your direct supervisor regarding spending decisions and thresholds for approval prior to incurring a cost.

Below are just a few examples of how many have nibbled away over the years.

Memberships and Subscriptions: It is easy to allow e-publications, printed subscriptions, app renewals, and individual or organizational memberships to renew year after year, but many have shared that they took a hard look at their memberships and related costs. District paid memberships should add value and should be utilized on a regular basis.

Qualifying considerations include:

Is the membership or subscription required? If so, do we need multiple members or just one designated member or subscription from the district?
If not required, what are the benefits to the district and how do the membership or subscription benefits align with our mission and strategic goals? Do we need multiple members or accounts, or will one designated membership or account suffice?
Overall, let’s make sure we can justify the return on investment using public monies for membership and subscription costs.

Student and Staff Recognition: The gift of a handwritten note, investing time to connect with team members, offering kind gesture or words, private accolades and/or public recognition for a job well done are all examples of valued recognition that tend to go further and be remembered longer than any BHS branded item could ever be. With years of service recognition being handled at a building level for 2022-23, please consider exploring no cost ways to recognize your staff. Central office will be providing personalized certificates to distribute at staff meetings.
Professional Development (PD) - Much has evolved with PD and making sure the PD is connected to our mission, vision, and strategic plan goals. For support team member PD, many are reviewing the PD content and making sure it is connected to the staff person’s role. Identifying one person to attend and bring back content to share with others is a strategy some have used when weighing value and financial impact.
Travel - Out of state travel remains paused for fiscal year 2022-23 for all district staff. Requests for consideration to the travel exemption must be presented to and approved by the superintendent and assistant superintendent of finance and operations prior to any travel arrangements or conference planning. As a reminder, make sure to review the Conferences section of the Finance web page for the process, including a link for Supervisors to review and denote approval (or not) of conference requests.
Supplies - Some have shared the price shopping benefits of checking multiple vendors including Staples, Amazon, Oakland School Purchasing Pages group of consortiums, etc. See the Finance Procurement webpage for more cost saving ideas.
Sales Tax - The District is tax exempt and sales tax should not be incurred/paid. The Finance team web pages include the District’s tax exempt information and forms:
- Michigan Sales and Use Tax Certificate of Exemption
- Verification of Tax Exempt Status Letter
Food - Review the District Spending Guidance on the Finance webpage. While the district embraces the benefits of district purchasing cards, it is not meant to provide an easy way to buy lunch. The District Spending Guidance will help inform what is appropriate. Many staff meetings and lunches have been structured as a potluck or privately paid. For those with Hills Funds, there is a focus on using Hills monies in other valuable ways beyond food, especially when the district has a structural deficit. Important Note: Federal grants, including those passed through the State of Michigan, no longer allows any food, snacks, beverages for reimbursement.
Printing - The district has evolved and embraced many paperless processes. Gone are the days of needing more filing cabinets to house binders of paper. Can’t find the electronic copy? Consider an electronic folder structure in Google Drive or on the district’s network of folders. Happy to brainstorm on this one!
- BusinessPLUS users: Documents are housed electronically. We should not be printing items from BusinessPLUS since it is readily available to look up and drill into the supporting documentation.
- For instructional materials, Oakland Schools printing services have been a cost effective resource for many, saving labor costs standing at the printer.
- The leased copiers should have a default to black & white printing. If not, submit a helpdesk ticket to IT for default. Color printing is very costly and should not be the norm. Make sure there is a good reason to print in color please.
Gifts, flowers & similar items - Please remember that gifts and flowers may not be purchased with public monies. Buildings and departments may choose to take up collections and coordinate purchases for celebratory events, or last minute events such as an illness or funeral.

Background on Structural Deficit Contributing Factors

The following factors contribute to the structural deficit:

1. Enrollment drives the majority of operational funding. Enrollment declines that began during COVID have not rebounded. It is important to note that BHS is not alone as peers and the state experienced significant decline over the past few years. In addition, ongoing factors contribute to lower enrollment, including lower birth rates across the state, movement to private/parochial schools as the economy improved, and the median age of a homeowner in our district continues to increase and fewer families with school-aged children are moving into the district boundaries, especially with very little new housing available. The district is funded based on full time equivalents (FTEs) using 90% of the fall count & 10% of the previous spring count.

2019-20 FTEs: 5,555
2020-21 FTEs: 5,380 (Note: the State recognized the decline & allowed a bump through a Super

Blend formula that funded the district based on 5,511 FTEs)

2021-22 FTEs: 5,338

2022-23 FTEs projected in the original budget: 5,271

For example, based on this year’s foundation allowance of $12,985, a loss of 40 students reduces revenue by over $500,000.

2. Funding - The majority of the district’s funding is dependent on the State’s School Aid Fund (SAF) budget. We are fortunate to have increases from the SAF budget for this year.

3. Spending increased during the pandemic with many costs funded by additional federal, state and interdistrict sources that are mostly exhausted through last year and this past summer’s programming. The District focused on utilizing pandemic funding on nonrecurring costs to the extent possible. For any recurring costs, the District must make adjustments in our spending, both in the short term and the long term. While the District focuses annually on budget balancing actions, both with spending reductions and potential revenue increases, it is not enough to counter the post pandemic realities of current enrollment levels and inflationary cost increases.

4. BHS HAS A POSITIVE HERE…Property value increases in BHS have created a revenue issue that was projected to result in a loss of state funding next year. Called “Headlee Rollback,” this 1978 Michigan Constitutional amendment limits the amount of revenue that can be collected to an inflationary increase. As a result of ongoing monitoring of the Headlee impact, the potential revenue loss was identified early, placing a restoration millage request on the August 2 ballot, which passed. Thank you to all who helped share the facts and answer questions!

Thank you for your continued support in reducing costs and being mindful of spending.