WWCSD Waterfall Slide

The financial problems facing Wayne Westland in 2022-2023 are discussed. Revenue increased by $35 million, but $8.5 million was passed through from the state. Federal sources increased by $12 million due to federal ESSER's money. Expenses increased by $53 million, with $8.5 million going to pension debt. $30 million of the increased spending went to instruction. Other expenditures also contributed to the problem. The district should have controls in place to understand and track spending. The number of employees by position should be tracked and published for transparency. We're bringing more focus now to the change from the 2022 year to 2023, which is when most of the financial problems affecting Wayne Westland took place. On the left-hand side, what you see is what were the changes in revenue in those different categories from 2022 to 2023. So you can see that in total, revenues increased by $35 million in this time. One thing to point out is that the state of Michigan issued quite a bit of money through the local school districts to pay down legacy pension debt in the public school employee retirement system. So even though $35 million increased in spend from 2022 to 2023, about $8.5 million of that was just passed through money that would show up in state sources. So in reality, for money that Wayne Westland was free to spend in whatever way they wanted, the state sources was closer to about $12 million, which is about equal to what the federal sources were. So the reason why federal sources went up $12 million from 2022 to 2023 is that is the impact of the federal ESSER's money that you probably have discussed quite a bit as a board. But in total, it's quite a bit of revenue increase. Now we move over to the right-hand side and look at expenses and what were the changes from 2022 to 2023. And I think this has been a hot topic, understandably, in the Wayne Westland community because people are understandably concerned about how spending could have increased so much. And this slide on the right tells you exactly where it went. So interestingly, between basic and added needs instruction, you had the $22.3 and the $5.9 million, and you are at about $30 million of the increased spend went to instruction. So I think that should be of some interest to the community that has been concerned about where this money could have gone. Now that doesn't necessarily mean that it all went to employees or specifically teachers. There can be non-human resources expenditures that go into instructional costs, but it's not as though the money did not flow in great proportion to instruction, which should be of interest to the Wayne Westland community. But elsewhere from there, you can see quite a length of expenditures that went up from roughly $2 million to $4.5 million. And it's not as though any single one of them contributed that much substantially to the overall problem, but you can see that by having so many categories that went up some significant amount that in total, this was going to contribute to the problem. So in total, from 22 to 23, expenses increased by $53 million, and of that, about $8.5 million went to that public school employee retirement system pass-through. So in actual increased spend that was under the control of the district, that totaled about $45 million. Given that there was such surprise by the increase in spending, I think one of the takeaways needs to be what controls does the district, and particularly the Board of Education, have in place in order to understand how much is spending increasing and where is it going. And I would go further to say it would be worthwhile for the district to begin keeping track of and publishing its number of employees by position so that over the course of from year to year, that the board in particular can see where the changes are coming from and ultimately whether they're affordable, depending on whether the district runs an operating surplus or deficit for that year. I'm sure there will be a lot of questions about this, and again, I would gladly take them in the public setting or individually before the meeting or at any time.