On Wednesday, April 20, 2016, School Board <SchoolBoard@gpschools.org> wrote:

________________________________
From: Ismail, Ahmed (GPPSS)
Sent: Wednesday, April 20, 2016 6:24:11 PM (UTC-05:00) Eastern Time (US & Canada)
To: Brendan Walsh
Cc: School Board
Subject: Fwd: FW: Salary Reductions and Fund Equity

Brendan,

First, thank you for taking the time to attend our school board meeting on the 2016-17 budget this past Monday night and for sharing your insights and firsthand knowledge of how our staff contracts came about and the value they hold for maintaining our schools with all of us on the school board.

I know that you are very busy and traveling extensively with your work.  Please stay in touch and continue to share your viewpoints with us, as none of us ever has all of the answers.  As you well know, I can't speak for the other board members.  Please know that I sincerely appreciate the investment of time you make in tracking our financial trajectory and that you are sharing it with the community.

Best wishes and safe travels,

Ahmed


Ahmed Ismail, Trustee
Grosse Pointe Public School System
Phone: 313-343-9060 (The Portrait Place - 10am-5pm)
Email: ismaila@gpschools.com<mailto:ismaila@gpschools.com>

Notice to Recipient:  The views expressed in this transmittal and its attachments (if any) are those of its author individually and are not necessarily shared by the other members of the Grosse Pointe Public School System's Board of Trustees and/or its administration.


---------- Forwarded message ----------
From: Brendan Walsh <brendanwalsh68@gmail.com<mailto:brendanwalsh68@gmail.com>>
To: School Board <schoolboard@gpschools.org<mailto:schoolboard@gpschools.org>>, "Niehaus, Gary" <gary.niehaus@gpschools.org<mailto:gary.niehaus@gpschools.org>>, Jon Dean <Michael.Dean@gpschools.org<mailto:Michael.Dean@gpschools.org>>, Chris Fenton <Christian.Fenton@gpschools.org<mailto:Christian.Fenton@gpschools.org>>
Cc:
Date: Wed, 20 Apr 2016 17:50:22 -0400
Subject: Salary Reductions and Fund Equity
Members of the School Board and Administration,

Thank you for hearing my comments on Monday. I wanted to make a couple of points based on closing comments from Dan and Judy. Note here I am not arguing, but wanted to share facts.

I am attaching the GPPSS Audit Review decks I create after the annual audit is published. Attached are my reviews of 2014 and 2015.

Dan accurately stated that the Board has done a good job seeing fund equity return to its current 7.8% from the 2% at the end of 2013. This comes as the result of two years of operating surplus, first of $3.7M in 2014 and then $1.8M last year. This year, you project almost no change in fund equity (a moderate surplus of $124k). If you look at my 2014 analysis, it breaks down the source of that surplus specifically on page 4.
[cid:ii_in9d2hkw2_1543589a994064dc]
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Given that the actual number of employees increased from 2013 to 2014 and that this was the year the 4.9% pay reduction took place, there is no question that reductions in Instruction, Instructional Support and Administration were completely attributable to contract based salary reductions. The gains were halved the next year as Other Variable spending increased by $0.5M, non-UAAL MPSERS costs increased by $0.6M, Added Needs Instruction increased by $0.6M and non-UAAL revenue decreased by $0.3M. And now we see this year that the $3.7M structural surplus is gone.

So try to reconcile what Dan said against Judy's call to never wanting to see any employee pay cuts again. The ONLY reason there was any surplus the last two years was the contract based salary reductions. Now salaries are increasing (and MPSERS with them). Like Judy, I do not relish our employees having to take pay cuts. But what is your alternative? And how do you justify to taxpayers that the $10M reduction in THEIR fund equity to buy the contract deal of 2010 is being ignored. And now worse, you tried to tax them more. This is why people are angry.

Second key point on salary reductions. There are only two ways you can reduce salary and MPSERS costs. You either reduce that cost through contract/negotiated means (enabled by the 10% clause or its modified temporary replacement) or you cut staff. The budget you are headed towards is certainly the latter. Even if you can accomplish a $1.4M+ in teacher cost reductions through retirement this year, this is not a long-term strategy AND at the end of it, you are simply increasing the ratio of students to teachers. Your plan projects a 1.4% decrease in student enrollment and a 2.6% reduction in General Ed teaching staff. This is what your predecessor Boards tried in the horrible years leading to the 2010 deal. This is why I memorialized that pattern in this graph:

[cid:ii_in9doma13_1543599690aade14]
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That is a 32% reduction in non-teaching staff and a 12% reduction in teaching staff. These guys got hammered. I'll never forget the Board meeting where the house was packed with teachers were outraged at increasing workload and "doing more for less."

This is where you are headed. If even finding $200,000 to $400,000 was harrowing enough to not even share your plans, I don't want to tell you what you are in for.

All this begs the questions: Why is it so sacrosanct to protect an individual's salary, yet completely eliminate the salaries of hundreds of employees? Do we not care about those people?

Who exactly wins in a scenario where staff ranks are slashed 30+%? The teachers and support staff who simply have a higher volume of students/square footage to support? The administrators who manage angry and disillusioned employees? The students who have fewer choices? The parents who pay higher fees or higher taxes?

This is why evenly and proportionally distributed responsibility (duly achieved in good faith bargaining) is infinitely wiser and more fair.

This was the circumstances of the 2010 deal that Cindy rightfully reminded everyone was overwhelmingly approved by staff. Why? Because it gave them EVERYTHING they asked for: Two new steps on their salary grid, which meant raises for nearly everyone plus an early retirement incentive that was funded with millions of taxpayer dollars. The Board willfully released $10M taxpayer dollars knowing it was not likely to come back (and still hasn't). As I always remind: The Board and taxpayers got ONE thing - the 10% clause - and now it is being ignored and publicly dismissed by the Board.

This note is here to remind you the only reason the district is not under EFM control IS that clause. You are abandoning it not at your own risk, but that of the community and taxpayers. I strongly urge you to review the facts and numbers.

Thanks for listening.

Brendan