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Home My Public Portal About03-13-2011 Joint BFO-ESSM Town of Watertown Town Council Committee on Budget and Fiscal Oversight Town Council Committee on Education and School System Matters Report of the Joint Committee Meeting of March 30,2011 The Joint Committee convened on March 30,2011 at 7 pm at the Phillips School first floor conference room. Present at the meeting were:Vincent Piccirilli,chair of Budget and Fiscal Oversight and secretary of the Education committee;Cecilia Lenk,chair of Education and secretary of Budget and Fiscal Oversight;Angie Kounelis,vice chair of Budget and Fiscal Oversight,Town Manager Michael Driscoll,and Town Auditor Thomas Tracy. Also present were the School Committee Budget and Finance Subcommittee members,Chair John Portz, Anthony Paolillo(chair of the School Committee)and David Leon. Present in the audience were Council President Mark Sideris;Councilors John Donohue,Susan Falkoff,and Anthony Palomba; Principals Anne Hardiman and Darilyn Donovan; Debra King,President of the Watertown Educators'Association; several Watertown parents;and reporters from the Watertown TAB,Watertown Patch, and Boston Globe. The purpose of the meeting was to discuss the School Department's proposed FY2012 budget that was presented by the Superintendent on March 21 and its impact on the Town's FY2012 budget,to discuss the projected FY2013 budget impact,and for the Joint Committee to make monetary, non-binding budgetary recommendations to the School Committee. In their introductory remarks,Mr.Piccirilli and Ms.Lenk expressed the Town Council's goal of working with the School Committee to support the Watertown schools and to minimize any impact on classroom teachers in the FYI budget. Mr.Portz presented a revised set of FY12 budget scenarios(see attached). The school system has a gap of approximately$1.8M from the FYI bbudget including:unbudgeted FYI I personal increases($95K);Unit A,B,D step increases($466K);proposed Unit A 1.5%raise and tuition reimbursement increases($270K);proposed set aside for other staff($100K);loss of ARRA funds($440K);and loss of other grant funding($70K). To maintain level services,additional funds above the FYI I budget are proposed for Special Education($425K);three additional elementary school teachers($165K);and computer hardware($33K). As proposed by the Superintendent,a level service budget will require a 6%Town appropriation increase over FYI 1. This level of increase is not possible under the Town's proposed revenue projections. The Superintendent has proposed significant cuts in teaching staff are to meet scenarios of a 2.49%(cut 9 FTE),2.0%(cut 12 FTE),and 0%(cut 25 FTE)Town appropriation increases over the FYI I school system budget. Mr.Paolillo announced that the administration had looked into the potential cost savings of closing the Cunniff School and that they had found that this was not a viable option;therefore the Cunniff School would not close. He further noted that in creating the proposed budget the School Committee was committed to maintaining programs and the recommendations in the budget scenarios were based on the principal's input about what was best for each school. Mr.Driscoll expressed disappointment that the Superintendent had announced the potential closing of the Cunniff School before the cost analysis was done,and this created unnecessary worry among parents. Ms.Kounelis anticipated that Superintendent Ann Koufman and Business Director Allie Altman would be present at the meeting,but Mr.Piccirilli stated that Mr.Portz had told him earlier in the evening that both would be unable to attend,and we would still be able to have a productive meeting. The Joint Committee had numerous questions about the budget scenarios. They noted that no policy changes had been incorporated into the current scenarios from those presented earlier on March 14t'. Mr.Piccirilli and Ms. Lenk asked that the Council be provided with an all-funds budget for the schools,including revenues from grants and fees,in addition to the Town appropriation,as well as an accounting of where these other revenues were used as offsets to expenses. Mr.Piccirilli further asked for clarification of the impact of potential circuit-breaker revenues and what specific costs are allowed to be offset with these funds. Mr. Tracy reported that he had prepared budget reports from the Town's accounting system,MUNIS,and that these FYI actual costs did not match the budget handbook presented by the Superintendent on March 21 st. Mr. Portz said they were unable to go into that level of detail and that Mr.Tracy should contact Ms.Altman and work through the details. Mr.Paolillo noted that this is a work in process and that the final budget presented to the Town Council will balance correctly. Next,the Joint Committee asked to present alternative scenarios on how the$1.8M budget gap could be brought to a more manageable level of approximately$500K-$600K while minimizing teacher layoffs. Mr.Piccirilli presented an analysis as follows: • Quantify the$1,726K budget gap: $510K Loss of stimulus grant $504K Step raises $387K 1.5%FY12 Discretionary raises all units $425K Added SPED costs • Identify key reductions: $100K Retirement savings(4 teachers) $287K Do not ratify contract with 1.5%FY12 base wage raise $100K Do not grant other units 1.5%FY12 base wage raise • Review the budget for all potential non-teacher cuts identified in Superintendent's 2%budget $100K Custodial outsourcing $50K Busing fees $60K Cut(3)SPED IA's $20K Cut SPED IA/Office aide $75K Cut materials • Assume House&Senate approve Governor's proposal to restores circuit-breaker funding $400K Added revenue This analysis yields a revised$534K budget gap. Use the potential mix of strategies to close it: • Town appropriation(dependent upon final state aid and other Town department needs) • Cuts to non-teacher administrative costs • Ask for a concession on step raises from unions(as asked previously in the FYI budget process) • Use teacher layoffs as a last resort(budget of$50K/FTE) Mr.Piccirilli and Ms.Lenk indicated that it was likely$200-300K of non-teacher cuts could be found in the$33M budget. Mr.Paolillo stated the School Committee will work with their education professionals to develop an educationally sound budget and will take all these suggestions into consideration. Finally,the Joint Committee asked what the impact of ratifying the pending Memorandum of Agreement would be on the FY2013 budget. The School Committee presented an incremental cost of$1,106,000 to be added to the FY2013 budget as follows: • $545,000 in discretionary increase,including added tuition reimbursement,added sick leave bank,and a new lane for Masters-45 of about$6,200. They felt is important to add these to remain competitive with other towns • $400,000 for FY13 step raises • $166,000 for similar raises in other bargaining units Mr.Paolillo stated that if the MOA was ratified,the School Department will be looking at a significant budget gap in FY13. This would likely require additional reductions in school staff. Ms.Lenk indicated that it was critical for the School Committee and school administration to develop preliminary budgets for future years in order to better understand the school system budget needs in advance. Mr.Piccirilli stated that because of the continuing economic recession,Watertown,like all other cities and towns in Massachusetts,is facing the fourth year in a row of lower than expected revenues as a result of local aid cuts,a limit under Proposition 2-1/2 to the amount of taxes the Town can raise,as well as reduced taxes from new economic growth. This reduced revenue means the Town has been forced to ask all departments,including the schools,to get their expense growth in line with the Town's growth in revenues. Mr.Piccirilli presented a series of charts(see attached)that showed Town budget increases/decreases for FY09-11,Town revenue factors for FY09-11,and major school system cost increases in FYI and FY12. He noted that the current path the school system is on is not sustainable in the current economic climate since 2008. Ms.Lenk and Mr.Piccirilli noted that the School Committee and Superintendent need to look for ways to create a sustainable approach to school funding,including possible regionalization of some services. Following the discussion,the Joint Committee voted unanimously to make the following recommendations: 1)The Joint Committee asks the School Committee to respectfully consider our nonbinding monetary recommendation to not include the$387,000 for the discretionary 1.5%raise in the FY2012 budget. 2)The Joint Committee further asks the School Committee to respectfully consider our nonbinding monetary recommendation to consider using the following potential mix of four strategies to close the budget gap,after the previously discussed actions were taken to reduce it to a manageable level: • Town appropriation(dependent upon final state aid and other Town department needs) • Cuts to administrative costs(non-teacher positions) • Request concession on step raises from unions • Teacher layoffs as a last resort Prior to adjourning,Mr.Palomba asked if the Manager could provide an estimate of the Town appropriation to the schools. Mr.Driscoll said that there are a lot of factors that are beyond the Town's control and that he is not able to provide specific numbers for the school or any other town department yet. He said he wants to provide more than 0%to the schools,but it is still unclear how much state aid will be cut,and the House has not passed a local aid resolution in March like they did last year. He also stated that the school's 6%and 8.7%budget scenarios could only be met with an operating override,and he will not support an override. He also noted that even when the economy was at its best,the most the annual budget went up was 4 to 4.5%. The meeting adjourned at 9:18 pm. WATERTOWN PUBLIC SCHOOLS PLVISLD 3/30/2011 FY2012 BUDGET SCENARIOS FY2012 ALL REQUESTS FY2012 MAINTAIN FY2012 2.5% FY2012 2.0% FY2012 0.0% PRESERVE&SUSTAIN LEVEL SERVICE FTE JAMOUNT 95,476. ]AMOUNT FTE JAMOUNT FTE JAMOUNT FTE ]AMOUNT FY11 Personnel Changes 95,475 95,476 95,476 95,476 95,476 Unit A,B, D Steps 466,000 466,000 466,000 466,000 466,000 Cust/Maini/Secretary Steps 12,000 12,000 12,000 12,000 12,000 Coaches Increase 5,000 5,000 5,000 5,000 5,000 Longevity Increases 22,000 22,000 22,000 22,000 22,000 Unit A 1.5%&Tuition Reimbursement 270,000 270,000 270,000 270,000 270,000 Set Aside for other Units and Non-Union 100,000 100,000 100,000 100,000 100,000 970,476 970,476 970,476 970,476 970,476 grant changes 70,000 70,000 70.000 70,000 70,000 Circuit Breaker Loss of ARRA 440,000 440.000 440,000 440,000 440,000 Retirement/Turnover savings (100,000) (100,000) (100,000) (100,000) (100,000) SUB TOT Base Level J 1,380,476 11,380,476 1,380,476 1.380,476 1,380,476 Teachers 2.50 145,000 1.00 55,000 1.00 55,000 1.00 55,000 1.00 55,000 IA's 6,00 120,000 5.00 100,000 2.00 40,000 2.00 40,000 2.00 40,000 Contract Services,Tuiton,Transp 309,000 270,000 270,000 270,000 270,000 a 57M.DO m :oo. -5:rsoti J :i>Q - - :Dory J 3.om 36 Classroom Teachers 3.00 165,000 3.00 165,000 (5.00) (323,636) (8.00) (488,636) (8-00) (488,636) Non Classroom Teachers 4.30 240,000 (5.70) (376,500) (5.70) (376,500) (5.70) (376,500) HS Dean of students 0.80 64,000 IA/office aide 1.00 30,000 (1.00) (20,000) (1.00) (20,000) (1.00) (20,000) Business Admin&Analyst 2.00 90,000 Busing (50,000) (50,000) (50,000) Custodians&Electrician 5.00 200,000 Custodial Reorganization (100,000) (100,000) (100,0 00 PROGRAM CHANGES _ (11.7fl) ("8�1).7"3�1 '�94.70) `"_.,(1:fl3'S:136)� ti4�0? -'" t'1.035 Teaching&Learning 139,896 (75,000) (75,000) (75,000) MATERIALS&SERVICES 139,896 (75.0001 (75,000) (75,000) Hardware 3,1()()0 33,000 33,000 33,000 33,000 HARDWARE J 33.000 33.000 33.000 33,000 � �.. 33.000 REDUCTIONS 1 BD f I J J (13.37) (668,340)] FY2011 Allocation:33,471,000 NE"I CHANGE 24.60 2,916,372 9 00 2,003,476 (8.70) 833,340 (11.70) 168,340 (25.07) - PER CENT CHANGE 8.710/: 5.99% 2.49°I 2.00% 0.00% TOTAL _ _ _ _ 36.387,372 35,474,476 34,304.340 34,139.340 '13,471,000 3/30/2011 Annual % Budget Increases FY09 - FY11 6.00% 3.5%Town raise for GIC 5.00% 4.00% 4.5% School raise for GIC 3.00% 0% School 2.00% r di 5e ■Town Budget 1.00% ■School Budget Town Depts FY09RB MY10R FY11B -1.00% 0%Town raise -2.00% -3.00% 0%Town raise -4.00% 3/30/11 V. Piccirilli Annual Budget Increases FY09- FY11 $5,000,000 $4,000,000 FY10 and FY11 $3,000,000 School Dept Increased $1,625,000 Town Depts Decreased $940,761 ■Town Budget $2,000,000 ■School Budget Town Depts $1,000,0001 1 LC ■Ins&Benefits $0 FY09RB ■ FY10RB FY11B -$1,000,000 Joined -$2,000,000 G I C 3/30/11 V. Piccirilli Revenue Factors FY09 - FY14 2,500,000 2,000,000 ' 1,500,000 { FY09 Revised Budget includes 1,000,000 ■ $774,561 Mid-year 9C Local Aid cut 500,000 0 Prop 2.5%Increase FY09RB FY10RB FY11B FY12 FY13F FY14F f New Growth -500,000 � Local Aid Cuts -1,000,000 -1,500,000 -2,000,00o FY12 Latest Estimate of 2/7/11: 7% Unrestricted Local Aid Cut Proposed by Governor -2,500,000 House Says Additional Aid will be cut -3,000,000 No Resolution on Local Aid Released by Legislature 3/30/11 V. Piccirilli School Budget Sustainability FY11 Town Budget Prop 2-1/2% Increase All other FY11= $1,735,280 sources 25,539,994 Equals 1.79% increase in the budget 26% Property Tax 71,146,821 74% L School Dept FY12 $ FY11 $ FY12%* FY11 % Step Raises 504,00 533,00 1.519/c 1.62% SPED Increase 425,00 530,00 1.279/c 1.61% Steps&SPED 929,00d 1,063,00d 2.7894 3.23% *Assuming a 0% increase budget for FY12 3/30/11 V. Piccirilli