Union crunches numbers
Capac School District employees' rep presents analysis at community meeting
March 18, 2009CAPAC — Both parties in the debate agree the Capac School District is 'living within their means.' It was a phrase repeated several times at last week's financial analysis meeting hosted by the employees' union—the Michigan Education Association.
It's a matter of opinion on how tight to hold onto those purse strings where the unions and administration differ. Both the teachers and support staff have been without a contract since last summer.
In their campaign to drum up community support, the unions hosted last week's meeting.
Arch Lewis, a research analyst with the MEA, told the crowd of several dozen that the school district seems to value other things over teachers and staff. He analyzed the school's general fund from 2004-2008.
"Teachers are not making the district go broke," Lewis said. "Capac is below what most districts of your size spend on instruction."
|Arch Lewis of the Michigan Education Association employees’ union compares Capac teacher salaries as a percentage of revenue to others in the state during Tuesday’s Michigan Education Association financial analysis meeting. The MEA and the school district have yet to reach a contract agreement. photo by Maria Brown.|
Lewis said peer groups in the state spend 58.5 percent of their general fund monies on instruction while Capac only spends 52.7 percent.
Lewis said the district shouldn't claim that rising retirement and health care costs are to blame either.
He said in five years, health insurance costs only went up three-tenths of a percent and retirement was "relatively flat." For every tax dollar the district collects, only 7.9 cents are spent on health care, Lewis said.
Superintendent Jerry Jennex said thanks to state level 'smoothing' of the retirement system they haven't seen an increase, but since that program is based on stock market trends and investments, changes are likely in the near future.
As for health insurance, Jennex said the district's rates are based on a regional formula which is expected to go up next year.
Business Manager Deb Lewis said the district spends $1.8 million in health care premiums—including dental, vision, life and long term disability—for the teaching staff alone. That's equal to more than ten percent of their $14 million budget. Support staff premiums total about $400,000 a year.
"We're glad we can provide good health care coverage," Jennex said. "We want to work with the unions to continue to provide adequate health care for our valued employees."
Arch Lewis said one of the district's biggest problems is that they're forking over general fund monies for major non-education purposes. He especially mentioned capital outlay, debt services and athletics.
"Interest on debt will never make a kid smarter," Arch Lewis said.
Jennex and Deb Lewis noted that the five year progression showed capital outlay spending from the general fund cut significantly. Charts showed that figure dropped from $250,000 in 2004 to less than $50,000. That's due to the bond voters approved in 2006. The funds have been used to purchase buses, new technology, and perform building and infrastructure upgrades.
Debt services is actually a 2003 energy bond that is being repaid through the general fund. Deb Lewis said the bond, as promised, has saved them money in energy costs.
As for athletics, Jennex said it's common for school districts to support athletics through their general fund.
"In Capac, we track every dollar spent on athletics and charge it to the athletic fund," Jennex said.
"We've been able to reduce contributions that the general fund makes to athletics because of the implementation of athletic fees and strong community support with gate receipts."
Athletic expenses have been on the rise, but Capac has offset some of those hikes by using a third party contractor for non-staff coaches which saves the district from making retirement contributions.
Jennex also argues that athletics should be considered instructional spending. Capac is only one of a few districts in the state with an athletic curriculum that emphasizes positive lessons learned through athletic participation.
Arch Lewis said the district should consider other ways to pay for athletics, possibly through a millage.
"The district's assets will cover its liabilities almost ten times," Arch Lewis said, comparing them to corporations with much lower numbers.
Jennex said the school board has been diligent to remain viable and liquid in its assets.
"Our goal is not to 'bank' money," he said.
"The position of the board is to make sure it lives within its means."
Deb Lewis said the district expects their fund balance to stand at $2.3 million at the end of this school year. That's after taking out an estimated $725,000 to cover expenditures.
Auditors recommend that fund balances are equal to 45-90 days worth of operational funds. Currently, Capac has about 70 days worth.
Arch Lewis said that when the state has granted districts an increase in per pupil funding only 28 percent of those monies has gone to teachers, while the statewide average is 49 percent.
"Obviously, what they value is not instruction," he said, adding that there are 12 fewer teachers in the district since 2004.
Jennex said that's due to declining enrollment, early retirement packages, reorganization of the special education program and some layoffs.
Arch Lewis said the overall financial picture proves the district "has failed to plan ahead."
Jennex said some things have been out of their control. Retirements have been "few and far between" at Capac in recent years and with the struggling economy that's not likely to change. For that reason natural attrition hasn't worked to balance staff to enrollment numbers. A state proposal to offer an early retirement incentive has yet to be approved.
Teacher's union president Colleen Burke said she thought the meeting went well.
"It was a real eye-opener," she said.
She said the next negotiation meeting is in the process of being scheduled.
The school board did meet with their contract negotiator Dave Hershey on Monday night, although the majority of the meeting was held in closed session.
The school board's regular meeting is tomorrow, March 19 at 7:30 p.m. at the high school.