msd of mt. vernon

MSD of Mt. VernonMSD of Mt. Vernon

Referendum RecommendationReferendum Recommendation

The ProblemThe Problem

Based on projected revenue Based on projected revenue decreases, the school district’s ability decreases, the school district’s ability to carry out its public education duty to carry out its public education duty will be in serious jeopardy. These will be in serious jeopardy. These funding decreases are due to two funding decreases are due to two problems that will have a huge problems that will have a huge impact on education locally.impact on education locally.

1. What is happening?1. What is happening? 2. What does this mean for MSDMV?2. What does this mean for MSDMV? 3. What do we do?3. What do we do?

1. What Is Happening?1. What Is Happening?

The financial problems facing MSDMV The financial problems facing MSDMV are in two parts.are in two parts.

Caused by legislative changes in Caused by legislative changes in 2005 regarding the way money is 2005 regarding the way money is distributed to schools.distributed to schools.

Change #1-Funding based on Change #1-Funding based on enrollment.enrollment.

Change #2-Transition to base.Change #2-Transition to base.

1. What Is Happening?1. What Is Happening?

Funding based on enrollment.Funding based on enrollment. No more minimum guarantee. Money now follows No more minimum guarantee. Money now follows

the child. For every drop of one student, the district the child. For every drop of one student, the district loses approx. $6,000.loses approx. $6,000.

MSD of Mt. Vernon - Historical Student Enrollment

2,200.00

2,300.00

2,400.00

2,500.00

2,600.00

2,700.00

2,800.00

2,900.00

3,000.00

School Year

No.

of S

tude

nts

ADM

Enrollment

ADM 2,662. 2,695. 2,688. 2,707. 2,731. 2,730. 2,796. 2,764. 2,759. 2,723. 2,758. 2,711. 2,738. 2,696. 2,636. 2,555. 2,510. 2,441. 2,441. 2,367. 2,321.

Enrollment 2,770 2,764 2,718 2,757 2,794 2,805 2,842 2,858 2,884 2,868 2,827 2,795 2,839 2,815 2,836 2,818 2,731 2,662 2,615 2,547 2,531 2,438 2,407

1987-1988

1988-1989

1989-1990

1990-1991

1991-1992

1992-1993

1993-1994

1994-1995

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

1. What Is Happening?1. What Is Happening? Funding based on enrollment.Funding based on enrollment.

No more minimum guarantee. Money now follows the No more minimum guarantee. Money now follows the child. For every drop of one student, the district loses child. For every drop of one student, the district loses approx. $6,000.approx. $6,000.

Transition to base.Transition to base. Schools who spend under the approx. $5100 amount Schools who spend under the approx. $5100 amount

established by the state receive “extra” money. That established by the state receive “extra” money. That money comes from schools who spend over that $ money comes from schools who spend over that $ amount. (MSDMV) To get to “base,” MSDMV will need amount. (MSDMV) To get to “base,” MSDMV will need to lose an to lose an additional $3 millionadditional $3 million in revenue. in revenue.

What has been the impact of this revenue What has been the impact of this revenue loss?loss?

General Fund Budget, Revenue, Expenditure, and CashMSD of Mt. Vernon

$15.0

$16.0

$17.0

$18.0

$19.0

$20.0

2005 2006 2007 2008 2009 2010

Mill

ion

s (B

ud

get

, Rev

enu

e, E

xpen

dit

ure

)

Budget Year

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

Mill

ion

s (C

ash

)

Budget

Total Receipts(Adjusted taxes tocorrect calendaryear)

Expenditures

Cash Balance

2009 and 2010 values are estimated based on current information.

General Fund Budget, Revenue, Expenditure, and CashMSD of Mt. Vernon

$15.0

$16.0

$17.0

$18.0

$19.0

$20.0

2005 2006 2007 2008 2009 2010

Bu

dg

et, R

even

ue,

Exp

end

itu

re in

Mill

ion

s

Budget Year

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

Cas

h B

alan

ce in

Mill

ion

s

Budget

Total Receipts(Adjusted taxes tocorrect calendaryear)

Expenditures

Cash Balance

2010 values are estimated based on current information as of Jan 2010.

1. What Is Happening?1. What Is Happening? The two funding changes have caused an immediate The two funding changes have caused an immediate

problem and present us with a future problem.problem and present us with a future problem. Immediate problem: Get cash balance stable.Immediate problem: Get cash balance stable. Future problem: How to handle an impending $3 Future problem: How to handle an impending $3

million additional loss of revenue.million additional loss of revenue. The $1 million in cuts made in December will help The $1 million in cuts made in December will help

with the immediate problem.with the immediate problem. HOWEVER: State is cutting approx. $801,000 HOWEVER: State is cutting approx. $801,000

ADDITIONAL revenue for 2010, lowering the “Base” ADDITIONAL revenue for 2010, lowering the “Base” and causing the district’s $3 million problem to and causing the district’s $3 million problem to become a $3.8 million problem. (More cuts for this become a $3.8 million problem. (More cuts for this year are needed.)year are needed.)

1. What Is Happening?1. What Is Happening? The “Future Problem” is more difficult. Due The “Future Problem” is more difficult. Due

to the “Transition To Base” in the current to the “Transition To Base” in the current distribution formula, MSDMV is projected distribution formula, MSDMV is projected to lose an to lose an additional $3 millionadditional $3 million in revenue. in revenue.

Do not know how soon or how fast Do not know how soon or how fast transition will occur.transition will occur.

DOE tells us to expect the funding base to DOE tells us to expect the funding base to again be lowered in 2011.again be lowered in 2011.

Enrollment is projected to continue to Enrollment is projected to continue to drop.drop.

Legislature will not review school funding Legislature will not review school funding until 2011. Any changes made will not until 2011. Any changes made will not occur until 2012.occur until 2012.



1. What is happening?1. What is happening? 2. What does this mean for MSDMV?2. What does this mean for MSDMV?

2. What Does This Mean For 2. What Does This Mean For MSDMV?MSDMV?

For the “Immediate Problem” the District For the “Immediate Problem” the District has been making cuts, such as…has been making cuts, such as…

What Has The District Done So What Has The District Done So Far?Far?

In December School Board cut spending by $1 In December School Board cut spending by $1 million .million .

Plan A Closing Hedges Central

Planned Cost Reductions GF SavingsAdministration 161,313Eliminate 1.5 positions (2.5 including HC principal position-see below)Reduce extended contracts (14)Move salary to other payment source

Secretary 5,125Reduce extended contracts (9)

Special Education Reductions 225,855RIF 6 1/2 teaching positions

Other Education Reductions 107,029RIF 2 teaching positionsReduce extended contracts (5 teachers)

Total Planned Reductions 499,322

Low HighHedges Closing Reductions GF Savings GF SavingsHedges Central Positions Reduced 591,785 758,696

PrincipalSecretaryNurseCustodian - 2 1/2Teacher Assist. - 3Classroom Teachers- (Range 4 1/2 to 7) Specialty Teachers (?)Food service - 4

Average class size:2009-2010 22.72010-2011 21.5-25.2

Total Hedges Central Reductions 591,785 758,696

Low HighTOTAL Range of GF Savings 1,091,107 1,258,018

What Has The District Done So What Has The District Done So Far?Far?

In December School Board cut spending by $1 In December School Board cut spending by $1 million.million.

Will soon reduce another $800,000 in spending.Will soon reduce another $800,000 in spending. Reduced Certified Staff. (15%)Reduced Certified Staff. (15%) Transferred allowable expenses to CPF and other Transferred allowable expenses to CPF and other

funds, including grant funds.funds, including grant funds. Spent Cash Balance. Spent Cash Balance. ($3.5 million to $1.5 end of 2009)($3.5 million to $1.5 end of 2009) Held Down Salary Increases. Held Down Salary Increases. (0% for 2 yrs*)(0% for 2 yrs*) Increased Cooperative Purchasing.Increased Cooperative Purchasing. Changed vendors for supplies and services.Changed vendors for supplies and services. Audited utility billings.Audited utility billings. Met with various individuals (state/local) to seek Met with various individuals (state/local) to seek

out possible solutions/suggestions.out possible solutions/suggestions. DOE says MSDMV is “step and a half ahead of DOE says MSDMV is “step and a half ahead of

most schools.”most schools.”

For the “Immediate Problem” the District has For the “Immediate Problem” the District has been making cuts, such as…been making cuts, such as…

Now, we need to make plans to handle future Now, we need to make plans to handle future cuts in revenue. ($3 million or more)cuts in revenue. ($3 million or more)

DOE agrees we have a $3 million “Future DOE agrees we have a $3 million “Future Problem.”Problem.”

The plan must be flexible. The $3 million loss The plan must be flexible. The $3 million loss of revenue could be less, could be more, of revenue could be less, could be more, might not happen.might not happen.

Must either decrease spending or raise Must either decrease spending or raise revenue.revenue.


Either-Decrease Expenditures:Either-Decrease Expenditures: Eliminate all assistant admin. ($321,000)Eliminate all assistant admin. ($321,000) Eliminate/reduce the number of after school programs Eliminate/reduce the number of after school programs

such as sports, music, etc. ($538,000)such as sports, music, etc. ($538,000) Close another school. ($600,000 - $800,000)Close another school. ($600,000 - $800,000) Eliminate electives/remedial programs. ($570,000)Eliminate electives/remedial programs. ($570,000) Reduce the number of school nurses. ($181,000)Reduce the number of school nurses. ($181,000) Increase elem. class size to maximum of 36. Increase elem. class size to maximum of 36.

($240,000)($240,000) Total savings = $2,650,000Total savings = $2,650,000

Or-Increase Revenue:Or-Increase Revenue: Tax Referendum.Tax Referendum.


Tax ReferendumTax Referendum

Referendum is good for 7 years.Referendum is good for 7 years. Caps the referendum tax rate.Caps the referendum tax rate. Only raise what is needed for each year.Only raise what is needed for each year. Allows for flexibility to match need.Allows for flexibility to match need. Approved once by vote of the public.Approved once by vote of the public. Allows the public the opportunity to Allows the public the opportunity to

decide the direction of its schools.decide the direction of its schools. Soonest it could be voted on is May Soonest it could be voted on is May

2010.2010.

Either-Decrease Expenditures:Either-Decrease Expenditures: Eliminate all assistant admin. ($321,000)Eliminate all assistant admin. ($321,000) Eliminate/reduce the number of after school programs Eliminate/reduce the number of after school programs

such as sports, music, etc. ($538,000)such as sports, music, etc. ($538,000) Close another school. ($600,000 - $800,000)Close another school. ($600,000 - $800,000) Eliminate electives/remedial programs. ($570,000)Eliminate electives/remedial programs. ($570,000) Reduce the number of school nurses. ($181,000)Reduce the number of school nurses. ($181,000) Increase elem. class size to maximum of 36. Increase elem. class size to maximum of 36.

($240,000)($240,000) Total savings = $2,650,000Total savings = $2,650,000

Or-Increase Revenue:Or-Increase Revenue: Tax Referendum.Tax Referendum.




1. What is happening?1. What is happening? 2. What does this mean for MSDMV?2. What does this mean for MSDMV? 3. What do we do?3. What do we do?

3. What Do We Do?3. What Do We Do? Recommendation:Recommendation:

Tax referendum. (DOE recommends referendum)Tax referendum. (DOE recommends referendum) Let community decide the future direction of Let community decide the future direction of

MSDMV.MSDMV. Maximum Rate of 25.1 cents per $100 of A.V.Maximum Rate of 25.1 cents per $100 of A.V. Future cuts of $3 million plus the $1.8 million we Future cuts of $3 million plus the $1.8 million we

have (or soon will) cut will be devastating.have (or soon will) cut will be devastating. Program cuts will be extensive. (both ECA & Program cuts will be extensive. (both ECA &

Electives)Electives) Class size will dramatically increase.Class size will dramatically increase. Another $ 3 million in cuts will drastically change Another $ 3 million in cuts will drastically change

MSDMV and have an overall negative effect on the MSDMV and have an overall negative effect on the local economy.local economy.

3. What Do We Do?3. What Do We Do?Financial Impact of Referendum on Local Taxpayer.Financial Impact of Referendum on Local Taxpayer.

Based on 2009 assessment: Maximum Rate of Based on 2009 assessment: Maximum Rate of $.2510.$.2510.

$100,000 Home = $100,000 Home = $82.20 per year$82.20 per year$1.58 per week$1.58 per week$0.2252 per day$0.2252 per day

1 acre of land = 1 acre of land = $3.51 per year$3.51 per year$0.07 per week$0.07 per week$0.0096 per day$0.0096 per day

100 acres of land =100 acres of land = $351.40 per year$351.40 per year$6.76 per week$6.76 per week$0.9627 per day$0.9627 per day

3. What Do We Do?3. What Do We Do?Financial Impact of Referendum on Local Taxpayer.Financial Impact of Referendum on Local Taxpayer.

Money stays local to use for the general Money stays local to use for the general fund of the school district.fund of the school district.

Each year only raise what is needed to Each year only raise what is needed to match cuts based on “transition to base” match cuts based on “transition to base” in order to maintain school district at in order to maintain school district at current level.current level.

Money would not be used to offset Money would not be used to offset reductions due to declining enrollment or reductions due to declining enrollment or used for salary increases.used for salary increases.

3. What Do We Do?3. What Do We Do?QuestionsQuestions

Will passing the referendum guarantee Will passing the referendum guarantee that there will be no more cuts?that there will be no more cuts?

Will defeating the referendum guarantee Will defeating the referendum guarantee that there will be cuts?that there will be cuts?

How much will the rate be each year?How much will the rate be each year? Why not make more cuts first?Why not make more cuts first?

MSD of Mt. VernonMSD of Mt. Vernon

Referendum RecommendationReferendum Recommendation

msd of mt. vernon

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