From: Ismail, Ahmed (GPPSS)
Sent: Friday, May 06, 2016 1:24:03 PM (UTC-05:00) Eastern Time (US & Canada)
To: Jeanne Lizza
Cc: School Board; Howell, Keith; Niehaus, Gary
Subject: Your Questions re: School System Financial Losses On Infant and 2-3 Toddler Programs
Please accept my apology for the delay in answering the note you left for me yesterday when you stopped in. Sorry I missed you. I was at Ferry's Coney Island Day having my lunch and watching a great group of students in action.
With regards to the concerns you expressed in your note about the losses on certain levels of the pre-school program, they are valid concerns. I will try to answer your questions below. Just to make sure the information I am giving you is accurate, I am copying this email to Mr. Keith Howell, who runs the program, so that he can email you (and me) with any corrections to what I outline below.
First, attached you will find the mini income and expense statements that Keith Howell prepared and presented to the school board in November 2015.
If you review the attached, you will see that the program is basically broken down into three separate profit/loss centers. We have an Infant Program, which is for under 12 month children, a Toddler Program for 2-3 year olds and a Pre-School Program for 4 and up. I am going to try to address your questions by program.
1. INFANT PROGRAM
The income and expense statements for this program start on Page 5 of the 12 page document attached. This program can have a maximum of 8 infants per classroom per State law. As you can see from Page 5, this program is anticipated to lose $27,6412.01 for 2015-16, lose $23,342.58 for 2016-17, lose $17,379.15 for 2017-18 and lose $11,933.41 in 2018-19. The total loss the school system will incur over these four school years to provide day care for 8 infants is $80,296.15.
With regards to your question on the residency of the infants, Mr. Howell has advised me that 2 of the 8 infants presently enrolled are not children of residents. I don't have a logical answer for why we are allowing non-residents to avail themselves of a program on which we are losing money. That is a Dr. Niehaus or Mr. Howell question.
As far as how to stop the hemorrhaging, there are only two answers--either discontinue the program or raise the tuition. Here is where the tuitions should be based on having a 10% cushion for unexpected expenses JUST TO BREAK EVEN:
2015-16 was $11,080--should have been a minimum of $15,900.
2016-17 proposed to be $11,911--should be a minimum of $16,400.
2017-18 proposed to be $12,803--should be a minimum of $16,500.
2018-19 proposed to be $13,764--should be a minimum of 16,800.
As far as competition, we can't concern ourselves with it. No one of our status offers a program for infants in the area. Mr. Howell has advised me that Child Time on Moross (certainly not in the same league as us) is charging $13,200 per year. According to Mr. Howell's analysis, Birmingham is $20,750 per year and Bloomfield Hills is $14,500. My personal thought is that we should discontinue this program and use the classroom for a pre-K program. This would turn the projected $80,296 LOSS for the four years in the report for that room to a $164,656 GAIN. This is a $245,000 swing that any business would jump at.
2. 2-3 TODDLER ROOM
This program is pretty much the same scenario--our costs are out of whack in relation to what we are charging. If you review Pages 7 and 8 of the attached financials, you will see that we are anticipated to LOSE $38,600 from 2015-19 on this program. If we charged 20% LESS than the Grosse Pointe Academy charges for the same program with NO increase in the charge through 2019, we would make $99,000 instead of losing $38,600!
I hope the above and the attached answer at least some of your questions, Jeanne. If they don't, I would suggest you contact Keith Howell directly at firstname.lastname@example.org<mailto:email@example.com>. You will find Keith a real gentleman and someone who will bend over backwards to answer any other questions you may have. If you have any other questions for me, they will have to wait until Tuesday, as Alex is graduating from MSU tomorrow and we have a lot of family things going on so we have closed the studio for the weekend.
Please give my best to Michael and the kids,
Ahmed Ismail, Trustee
Grosse Pointe Public School System
Phone: 313-343-9060 (The Portrait Place - 10am-5pm)
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. If you would like the official school board position on an issue or would like to communicate to all of the members of the school board at once, please send your email to firstname.lastname@example.org<mailto:email@example.com>. Thank you.