Novi School District Expects Declining Enrollment, Budget Deficits in Future

The continues to face financial challenges as enrollment is expected to decline over the next five years and as the district dips more into its rainy day funds.

The Novi Board of Education discussed the projected 2012-13 budget at its work session meeting Thursday night. The budget must be officially adopted by the board by June 30.

The district is asking the community for input on the budget process. You can share your ideas by emailing budget2012-13@novi.k12.mi.us.

Enrollment expected to decrease

A study done by Plante Moran Cresa forecasted enrollment in Novi schools until 2016 based on live births, historical data, community trends and demographics.

"The pupil count is an integral part of our budget planning, and we never know exactly what it's going to be, but we do know our best statistical estimate of what it's going to be," said Assistant Superintendent of Business and Operations Steve Barr.

The study predicts a total decrease in enrollment of 5.6 percent by 2016, which Plante Moran estimates will be 99.4 percent accurate.

The decrease in enrollment is largely a result of a decrease in birth rates.

Kindergarten enrollment is expected to drop by 6.3 percent, grades 1-4 are expected to decrease by 16.4 percent and grades 5-8 are expected to go down by 9.2 percent. Pre-primary enrollment is expected to increase by 18.9 percent, and the high school enrollment is expected to increase by 7.4 percent.

Decreases in enrollment are estimated to cost the district $469,506 in 2012-13, $611,349 in 2013-14 and $353,983 in 2014-15.

Approximately 93 percent of K-12 school-aged children in Novi attend public schools; the other 7 percent attend private schools.

Amendment to current school year budget

The board also discussed the district's second amendment to the 2011-12 budget, which would include an $118,000 increase in expected revenue and a $782,000 increase in expenses.

Approximately $374,000 was added to expenditures because the district did not have any snow days this year, which is when staff was expected to take furlough days.

Tax tribunals, which is when a taxpayer can dispute his or her assessed property value to possibly lower his or her property taxes, have resulted in a net loss of approximately $100,000 for the Novi school district. 

Bus repairs, building repairs and paying off the copier lease cost the district another $121,000.

The board will vote on whether to approve the amendment at its next meeting on April 26.

A was made to the budget in January, and a final amendment will be made in June.

Long-range budget forecast

District staff currently does not know enough information to put together the exact budget for next year, but Barr presented his budget projections based on the information he does have at the meeting.

Forecasted Budget Summary 2011-12 to 2014-15

The Novi Board of Education aims to keep at least a 10 percent fund balance.

Barr said the district will not know how much money it will receive from state aid until June 1, but several funding incentives are proposed. 

"All hope is not lost," Barr said. "It doesn't mean we don't have a big job to do for this year coming up, but there is hope in my mind."

The district might also have to adjust the budget if a proposed change in the kindergarten birth date cutoff is passed by the state legislature, Barr said. Currently, students must be 5 years old by Dec. 1 to enroll. The proposal would require students to be 5 by Nov. 1 in 2012, by Oct. 1 in 2013 and then by Sept. 1 in 2014. This could result in lower enrollment.

A retirement reform is also proposed in the legislature, which could save the district some money, but at the expense of its current and former employees, Barr said.

The district will also begin negotiations with the transportation union within the next few weeks, whose contract includes the option of a change in pay going forward.

Currently, staff salary and benefits comprise approximately 84 percent of the budget.