Management Discussion & Analysis
Fiscal Year Analysis
Management Discussion and Analysis For the Fiscal Year Ended June 30, 2019
Factors Bearing on the District’s Future
At the time these financial statements were prepared and audited, the District was aware of the following items that could significantly affect its financial health in the future:
The uncertainty of student foundation funding levels, as well as funding for other K-12 education programs, reflects the economic difficulties faced by the State of Michigan and the District. One of the most important factors affecting the District’s budget is student count. General Fund revenue is generated from the State’s per pupil allowance, and a combination of State aid and property taxes. Under State law, the District cannot assess additional property tax revenue for general operations.
In November, 2018, county voters approved a 0.9 mill enhancement millage where the funds will primarily be used to maintain current academic and extra-curricular offerings, improve mental health and social-emotional learning services district-wide with additional staff, and ongoing upgrades to district safety and security.
Demographic projections indicate that enrollment is likely to continue growing slowly over the next several years. While this is good news, especially compared to most districts within the State, the lack of stability in the funding stream from the State, and rising costs in many areas including employee health insurance, retirement contribution costs, and utilities, District administration continues to remain diligent in its decision-making as the Board desires to increase its level of reserves (fund balance) that will allow the District to stop the practice of short-term borrowing for cash flow needs. Measures to accomplish this include, but are not limited to, cooperative agreements with the Ottawa Area Intermediate School District as well as neighboring public and parochial schools and strategic changes to how the District handles its non-instructional support services.
In 2007, Allendale voters approved utilizing the School Bond Loan Fund, (a program created by the Michigan Legislature to assist school districts in bonding for new facilities) to construct new school buildings in order to accommodate the District’s growing population of students. New legislation passed in December 2012 obligates school districts to annually review their outstanding debt beginning in the fall of 2013 and levy a millage to ensure that the bond debt will be paid within a newly appointed 30-year period. House Bills 4496 and 4497 were signed into law by Governor Snyder in June 2015 which amended the 2012 legislation allowing the District to refinance $95 million of outstanding debt saving taxpayers approximately $25 million of future interest expense. District administration will be working with its financial advisors and bond attorney to determine if continued favorable interest rates will allow future refunding possibilities.
In May, 2017, voters approved a $29.6 million bond proposal focusing on growth, safety and security, educational technology and building and site improvements. Over $18.2 million has already been spent on these projects with the remaining funds being spent gradually over the next four years to provide for the continuing needs of the district. The largest project, the Allendale Early Childhood Center, will be open for the 2019-20 school year.
Contacting the District’s Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have questions about this report, or need additional information, please contact the Chief Financial Officer at Allendale Public Schools, 10505 Learning Lane, Allendale, MI 49401.