Utica Community Schools adopts balanced $278M budget for 2016-2017

The Utica Community Schools Board of Education on June 13 unanimously adopted a balanced 2016-2017 general fund budget totaling $277.6 million.

The budget, which meets all contractual and state legal obligations, while maintaining the district’s core academic and extracurricular programs, was balanced through budget reductions, cost containment, revenue enhancements and the use of fund equity – or reserves.

“We have been able to preserve programs and balance that tension between variables out of our control and what we know is right for our students and what we really want in our hearts for our school district,” Board of Education president Dr. Carol Klenow said.

District officials continue to address gaps between the district’s revenue and expenditures resulting from enrollment decreases, staffing costs and ongoing structural challenges related to Michigan’s funding formula for schools.

Adjustments included in the adopted budget include areas such as:

• Reductions - Totaling $1.3 million including: the elimination of three administrative positions ($489,000); energy cost reductions ($300,000); reduction of high school campus monitors through establishment of secured entranceways ($35,000); reduction of a clerical position ($50,000); technology reductions ($116,500); and other reductions ($342,000).
• Cost-containment – Totaling $6.4 million including: an audit of employee dependent health care ($300,000); enrollment-based staffing adjustments ($2.6 million); reassignment of English Learner teachers to address instructional needs of students and an increasing English Learner population ($2 million); operational efficiencies ($300,000), reduction of digital learning platform ($500,000) and other efficiencies ($744,142).
• Revenue Enhancements – Totaling $867,000 including: the transfer of Community Education funds to the operating budget ($600,000); increased rates for school age child care, athletics and facility usage ($267,000).
• Fund Equity – The use of $11.8 million in reserved funds.

The enrollment-based reductions will include teacher layoffs next year due to declining enrollment.

Revenue for UCS this year is projected to be $265.8 million. Revenue levels for Michigan schools are established by state lawmakers through a “per pupil foundation allowance” that is based on overall student enrollment.

Michigan schools receive funding for each student based on a “foundation allowance” – a rate annually established by state lawmakers. The district’s foundation allowance next school year is $7,684 – a rate lower than the 2007-2008 school year.

While UCS has implemented a successful schools of choice program - totaling nearly 2,000 students or $14.9 million annually – schools of choice has not offset continued enrollment declines through declining birth rates.

Enrollment decline is projected to continue into the future, with student enrollment expected to fall 440 students for 2016-2017 and nearly 1,132 additional students over the next four years. This will result in an annual funding loss of $12 million.

The State of Michigan and Macomb County are both experiencing significant declines in the number of births. The impact of declining birth rates on UCS is reflected in the more than 300 student difference between graduating seniors and incoming kindergarten students.

The district also experienced a $480,000 revenue loss through a Headlee Amendment rollback. The rollback requires local governments to reduce millages if property values grow at rates higher than inflation. This year’s inflation rate is 0.3 percent.

“The budget is balanced for the next year,” superintendent Dr. Christine Johns said. “Our district will continue to provide a quality education within the resources the state legislature has provided.”

In addition to the general fund budget, the Board of Education also adopted 2016-2017 special revenue, debt service and capital project funds budgets.

Student meal price increases were approved to meet federal requirements with lunches at $2.75 elementary, $2.90 junior high and $2.95 high school. Due to increased student demand, breakfast will be available at all schools for $1.75 per meal.

More information on the district’s $277.6 million total operating budget, approved reductions, cost-containment measures, revenue enhancements, enrollment projections and other district supplemental budgets visit this link: http://www.uticak12.org/districtinfo/1617budget.asp