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HomeMy Public PortalAbout03-25-2014 ESSM report corrected_201403281031195457 Town of Watertown Town Council Committee on Education and School Systems Matters Wednesday, March 5, 2014 at 7:00 PM Third Floor Conference Room Minutes Committee Members Attending Councilor Aaron Dushku, Chair, Councilor Kenny Woodland, Vice Chair, and Councilor Tony Palomba, Secretary. Town Councilors Members Attending Town Council President Mark Sideris, Councilor Susan Falkoff and Councilor Vincent Piccirilli. School Committee Members Attending School Committee Member John Portz and School Committee Member Guido Guidotti. Please note that Town Councilor Sideris also serves on the School Committee. Town Representatives Attending: Mr. Tom Tracy, Town Auditor Residents Attending Please see attached list of twelve individuals. (Appendix A.) Councilor Dushku introduced the members of the Committee, Town Councilor and School Committee Members, and the Town Auditor. He expressed his appreciation to the residents for attending and reviewed the three topics the Committee hoped to address. Financial and Administrative Vehicles for Public/Private Partnerships 1) Amy Donohue, President of the Watertown Education Foundation(WEF) reviewed the Foundation's successful fundraising efforts and the recent awards to PTOs and teachers. a. Raised$30,000 in 2013 with a small board of eight mothers. This represented an increase from the year before and a substantial increase from previous years. b. Funds were raised from events included the annual Spelling Bee and the upcoming Dancing with the Stars as well as contributions from businesses including Watertown Savings Bank, Belmont Savings Bank and Primary Source. c. The Foundation was concerned about the lack of coordination between the requests from PTOs and teachers with the needs of the District. Ms. Donohue concluded her presentation with a plea for more volunteers to join WEF. 2) Tom Tracy explained school funding sources that were outside the annual budget allocations including revolving funds and gift funds. He gave particular attention to a revolving technology fund started in the early 80's that had a goal of raising $250,000 - $500,000, but was disbanded in 2008 after distributing$64,000. This was started through donations from the Harvard/O'Neil partnership at the Arsenal property. Mr. Tracy also mentioned that internships for WHS students are also always a possibility. -2 3) Mr. Tracy's presentation generated a lively discussion among those present about private sources of funds and vehicles for accepting and allocating these funds. Key points from that discussion included: a. Revolving funds could be structured in various ways that addressed minimum principle requirements, use of interest, guidelines for allocation, etc. b. There are a number of organizations, including the Friends of Watertown Music and each of the PTOs that organize events and seek corporate support (between $1,000 - $5,000) to fund school projects and buy school supplies. c. The proposed large developments in Watertown provide a unique opportunity to create a new public/private vehicle to support education in Watertown. Possibly named the `Watertown Corporate Education Fund', this vehicle could be structured such that corporations would make annual six-figure contributions, (for targeted use or for general use) and that the funds could be used to address a variety of needs including technology, music and arts, and school-based gardens. d. In some towns, residents are given an option printed on their tax bill to add voluntary and additional contributions to education funds like these. This may be a good idea for Watertown. Councilor Palomba made a motion that the Committee on Education and School Systems Matters continue to discuss a Watertown Corporate Education Fund in cooperation with the Watertown Education Foundation and similar volunteer-based organizations, representatives of the School District,the Budget and Finance Committee of the School Committee, the Town Auditor and other Town officials recommended by the Town Manager. Councilor Woodland seconded the motion and it was passed 3 —0. Progressive Report on the School Department Budget Development In the following summary: SD = School District, SC = School Committee, TC =Town Council, TM=Town Manager, B&F= School Committee's Subcommittee on Budget and Finance, and B&FO =Town Council's Committee on Budget and Fiscal Oversight. Councilor Dushku opened this part of the meeting by reading a letter from the Chair of the SC, Eileen Hsu-Balzer which outlined the present situation vis-a-vis the SD's budget, explained the SC's budget process and expressed a desire to continue discussions with the Committee, the TC and the Town. (Letter attached as Appendix B.) What followed was an unusually free-flowing discussion that was encouraged by the Chair and the members of the Committee. It is not an exaggeration to say that the dialogue that ensued was characterized by a high-level of information searching and the expression of ideas in a manner that was both respectful and emotionally charged. The elected members of the TC and SC provided a comprehensive explanation of how the SD and Town budgets were developed. Key points included: -3 3) Mr. Tracy's presentation generated a lively discussion among those present about private special education costs), March 20 (fees and enrollment projections), and March 24 (summary of budget). The B&F might hold one additional meeting before presenting the budget to the full SC at in a meeting in early April. The SD will present the final budget to the TM during the second or third week of April. 2) The TM presented the TC a preliminary budget in late October. The TC, through B&FO, created Budget Guidelines for expenditures and revenues in December to be used by the TM in his final budget presentation. The TM presented the Capital Improvement Program budget to the TC in early February and the B&FO holds hearings on the capital budget, including the SD's capital budget in March. 3) On April 22 the TM will present his budget to the TC and throughout the month of May the TC President will schedule meetings of the full TC to review each budget, including the SD's budget with department heads and administrators present. On June 10, the TC will approve the Town's FY '15 budget. 4) It was noted that by stature the SC plays a more formal role in drafting the School District budget than the TC does in the drafting of the Town budget. However the TC can make suggestions/motions to amend the TM's budget during the public meetings held to discuss each departmental budget. Motions presented by a town councilor must be passed by the full TC. The discussion also touched on important issues related to Town finances in general and the Town and District budgets. 1) The District budget has benefited from unexpected cost savings (e.g. reduced fees for trash disposal), as has the TC reserve fund, a line item in the TC budget. The reserve fund is used for emergencies, labor contract settlements, a supplemental budget requirement from a particular department, overtime, town studies, etc. Near the end of the fiscal year unused reserve funds can be transferred to stabilization funds, such as the capital project stabilization fund, the unfunded pension liability, or the collective bargaining stabilization fund. An anticipated supplemental budget request from the SD will mostly likely be funded through the TC reserve fund. 2) The SC faces a variety of"unknowns" as it develops a budget in collaboration with the SD, including state aid, Chapter 70 funds, increased special education services, changes in enrollment, increased tuition rates for out-of-district placements, etc. These unknowns make their task very difficult. 3) Traditionally the TM's preliminary budget for the coming fiscal year includes a 2.5% increase in every department. Sometimes the SD gets a 3% increase. However there is no requirement that each Town department be given an annual 2.5% increase. -4- 4) There is a source of money available to the Town referred to as the"unreserved fund balance" aka"free cash". (While there maybe a small difference in the amounts of the unreserved fund balance and free cash, it is the latter amount that is certified by the Mass DOR and therefore the amount that is legally available to the Town.) The amount of free cash certified as of July 1, 2013 (FY 14) was $9,142, 621. The Town traditionally uses between$1,500,000 and $1,750,000 of free cash for the operating budget in the following fiscal year. In addition, the TC has established a budget guideline that a free cash reserve, including stabilization funds, total 7% - 10% of the annual budget. In addition there was an exchange of ideas about how to increase the SD's operating budget without pitting one department against another(e.g. if you want another teacher, you need to give up a firefighter). These ideas, which are not mutually exclusive, included: 1) Override of Proposition 2 1/2 or pass a debt exclusion proposition. It was noted that the latter would be for a capital improvement, as was done in 1995, thus not increasing the operating budget. 2) Use a portion,possibly a percentage, of free cash on an annual basis. It was noted that the amount of free cash available was not the same each year, thus the % for the SD would not be "guaranteed". 3) Establish a SD stabilization fund, similar to other stabilization funds, which would be available to the SD when there were unexpected increases in the operating budget. The stabilization fund would be funded by monies remaining in the TC's reserved fund, free cash or revolving private partnership funds (as discussed earlier). Finally, the issue of special education funding was briefly discussed. There was a suggestion that the Town enlist the support of a professional negotiator to increase the amount the Town receives from payments in lieu of taxes (PILOTS) from non-profit organizations (a resident mentioned the Perkins School, in particular). It was also noted that it should be the Town's responsibility, not the SD's responsibility, to pay for an unexpected increase in special education services during a school year. The Committee agreed to continue this discussion at its next meeting and acknowledged that the third agenda item, "report on the school district infrastructure study" could not be discussed at this time. The meeting adjourned at 9:30 PM. Appendix C, FY14 Budget Presentation Summary which was prepared by Town Auditor Tom Tracy was not mentioned in the minutes. However it was distributed at the meeting. Minutes prepared by Councilor Palomba ► 1 y�v,r, a►�a+ at chcandkr ba- �r�rrro� r155or/ 1� LoC� Lco� P rQ ?�A'4 614 4,4f -'I S r�CP c_elrlf i F/ Cc / r-/ -7e—)u� Co L,-,,l c-,e' / ���� �- t1A/1,0A1 sr. To the Honorable Members of the Town Council subcommittee on Education: I am unable to attend your meeting tonight, March S, 2014,but I am grateful for yQur interest in promoting dialogue between the School Committee and the Town Council. There appears to be some community confusion about the budget process,which might be leading to misunderstanding about the roles of the Council and the School Committee. With your indulgence,I would appreciate your reading this note at the meeting,to place it into the record,and to address this misunderstanding. Last autumn,the Town Manager presented his preliminary budget to the Town Council. In that presentation,he forecasted a 3% increase for Education. Sipce then,the Schools have been working on developing the FY 15 budget numbers. Some or that material was presented at the February 24,2014, School Committee meeting. Slides from that meeting are posted on the School Department website.We do not yet know what that budget will contain. Now that the School staffhas developed a list of its most pressing needs,we have a series of Budget and Finance subcommittee meetings planned in March, to which you and the public are invited. They will be March 17,20 and 24,at 6:30. All meetings will be posted.At these meetings,various parts of the budget will be analyzed and discussed. Until the entire School Committee has had an opportunity to examine and discuss budget issues and numbers together, individual members cannot say with any certainty what they will be. Furthermore,as you know,the budget request which the School Committee will present to the Town Manager will then be considered and adjusted by him for submission to the Town Council. The Town Council can vote to accept the Manager's budget,or can vote to send it back to the Manager to request that a given department's budget be raised. They cannot vote to request that a budget be lowered.The School Committee does not vote itself the funds. The School Committee yote is a reg,uest for fimds. The Town Council vote is the vote to authorize the funds. Following that vote,the School Committee and Administration bear the responsibility for allocating those funds,within the bottom line dollar limit voted by the Town Council. All members of the School Committee look forward to continuing fruitful exchanges with you and other members of the Town Council.We are all one town,and the more smoothly we work together,the better community we will build.Thank you. Eileen Hsu-Balzer Chairman, Watertown School Committee 14 FISCAL YEAR 2014 BUDGET PRESENTATION SUMMARY 16 CURRENT PRE-OVERVIEW OCT. 2012 MANAGERS VARIANCE 16 FY 2013 PROJECTED PROPOSED FY14 BUDGET FY 2014 FY 2014 TOF.Y13 14 REVENUE: TAXES $ 77,348,790 75.08% $ 80,550,741 75.88% $ 80,550,741 75.24% $ 3,201,951 4.14% STATE AID $ 10,109,449 9.81% $ 9,741,599 9.18% $ 10,474,554 9.78% $ 365,105 3.61% LOCAL RECEIPTS $ 10,081,517 9.79% $ 10,127,713 9.54% $ 10,271,109 9.59% $ 189,592 1.88% OTHER FINANCING SOURCES $ 5,480,724 5.32% $ 5,730,724 5.40% $ 5,761,096 5.38% $ 280,372 5.12% TOTAL REVENUE $ 103,020,480 100% $ 106,150,777 100% $ 107,057,500 100% $ 4,037,020 dill 3.92% EXP,ENDITURES: EDUCATION APPROPRIATION $ 35,335,000 34.30% $ 36,218,375 33.89% $ 36,675,000 34.26% $ 1,340,000 3.79% TOWN DEPTS. APPROPRIATIONS $ 28,015,651 27.19% $ 29,138,731 27.26% $ 28,689,552 26.80% $ 673,901 2.41% WASTE DISPOSAL $ 3,025,926 2.94% $ 3,107,860 2.91% $ 2,959,500 2.76% $ (66,426) -2.20% 11 SNOW& ICE $ 1,220,718 1.18% $ 1,155,000 1.08% $ 1,155,000 1.08% $ (65,718) -5.38% STATE ASSESSMENTS $ 2,239,561 2.17% $ 2,300,620 2.15% $ 2,253,507 2.10% $ 13,946 0.62% PENSION COSTS $ 9,437,500 9.16% $ 10,688,580 10.00% $ 10,683,126 9.98% $ 1,245,626 13.20% INSURANCE & EMPLY. BENEFITS $ 13,499,490 13.10% $ 14,164,725 13.25% $ 13,881,480 12.97% $ 381,990 2.83% III DEBT AND INTEREST $ 6,825,486 6.63% $ 7,170,884 6.71% $ 7,010,989 6.55% $ 185,503 2.72% CAPITAL PROJECTS & OFS $ 3.421'148 3.32% $ 2,930,871 2.74% $ 3,749,346 3.50% $ 328,198 9.59% TOTAL EXPENDITURES $ 103,020,480 100% $ 106,875,646 100% $ 107,057,500 100% $ 4,037,020 3.92% PROJECTED SURPLUSI(DEFICIT) R 0 % (724,869) $ 0 $ (0) FINAL MANAGER"S VARIANCE FY 2009 PROPOSED FY14 BUDGET FY 2014 TOFY09 REVENUE: TAXES $ 66,633,934 69.63% $ 80,550,741 75.24% $ 13,916,807 20.89% STATE AID $ 12,929,784 13.51% $ 10,474,554 9.78% $ (2,455,230) -18.99% LOCAL RECEIPTS $ 10,728,827 11.21% $ 10,271'109 9.59% $ (457,718) -4.27% OTHER FINANCING SOURCES $ 5,400,486 5.64% $ 5,761,096 5.38% $ 360,610 6.68% TOTAL REVENUE $ 95,693,031 100% $ 107,057,500 100% $ 11,364,469 _ 11.88% J EXPENDITURES: . EDUCATION APPR ARM_A*,000 33.28% $ 36,675,000 34.26% $ 4,829,000 15.16% TOWN DEPTS. APPROPRIATIONS $ 27,526,586 28.77% $ 28,689,552 26.80% $ 1,162,966 4.22% 11 WASTE DISPOSAL $ 3,117,793 3.26% $ 2,959,500 2.76% $ (158,293) -5.08% SNOW& ICE $ 1,756,001 1.84% $ 1,155,000 1.08% $ (601,001) -34.23% STATE ASSESSMENTS $ 2,087,290 2.18% $ 2,253,507 2.10% $ 166,217 7.96% PENSION COSTS $ 7,325,580 7.66% $ 10,683,126 9.98% $ 3,357,546 45.83% INSURANCE & EMPLY. BENEFITS $ 13,353,713 13.95% $ 13,881,480 12.97% $ 527,767 6.9b/o DEBT AND INTEREST $ 6,345,007 6.63% $ 7,010,989 6.55% $ 665,982 10.50% 1 CAPITAL PROJECTS & OFS $ 2,335,061 2.44% $ 3,749,346 3.50% $ 1,414,285 60.57% • TOTAL EXPENDITURES $ 95,693,031 100% $ 107,057,500 100% $ 11,364,469 11.88% PROJECTED SURPLUSI(DEFICIT) $ - $ 0 $ 0 11