Wednesday, December 19, 2012

Joint Council/School Committee meeting: Finance & Operations and Education: finance

We've got a phone call going into DESE: Jeff Wulfson, Deputy Commissioner of Education; Jay Sullivan, Executive Director, School Finance and District Support Center; Roger Hatch, School Finance Programs Administrator are "here" by phone.
posting as we go...

Foley: agree to meet on a regular basis over the next few months, not just on budget, but capital improvements and facilities
consensus around foundation budgets and net school spending
why foundation budgets were created under the education reform act: adequacy
understand completely fiscal challenges faced by the city
"sound expenditures that focus on the classroom"
O'Brien: apologize for daytime meeting
try to get this meeting done before the holiday season
started a good discussion last night on the City Council level: reconcile the books
a baseline from which we go forward
long-term plan, some of our funding needs
capital needs as well
"real concrete plan that we can rally the community behind"
DelSignore: $799,361 in arrears
thinks that DESE is off by $154 (rounding and "something they did wrong")
Foley invites Wulfson to take us through the foundation formula and what is in or out
Wulfson: challenge of doing this without charts and graphs
before 1993, spending on K-12 education strictly a local matter
McDuffy found education spending being only local unconstitutional
1993 Education Reform Act: new school finance system
foundation budget determined to represent the minimum amount a district needed to educate its students
developed by educators and municipal finance experts
enrollment in district: numbers, grade level, demographics are represented
formula adjusted each year based on inflation
"whole debate going on..." if it is adequate
districts choosing to spend more: "represents floor below which we do not expect districts to go"
combination of state and local dollars for the funding
based on fiscal capacity of each town
"tinkered with it and adjusted it over the years...richer communities to contribute more"
Worcester is asked to pay for about 30% of foundation; the state pays 70%
"have to get you at least to foundation..."
"basic operating instructional costs for the districts"
does not include everything a school district would spend: transportation, capital construction costs, adult and community education
set Net School Spending requirement: measured to be sure each district is funding at that level
measure for previous year: at, above, or below NSS
leeway over the course of the year...shortfall carried over into the next year
if it becomes greater than 5% gets deduced from next year's Chapter 70 aid
"rarely happens, does happen on occasion"
Total budgeted shortfall just under $800,000; a quarter of a percent
"time of year when the city and the schools need to be reviewing actual expenses
charter school numbers: first quarter numbers are now out based on actual October 1 numbers (rather than projections)
now being estimated at about $500,000 than previously estimated for first quarter
(well, except we sort of already did)
will reduce Net School Spending number further and put you in even greater deficit for the year
Foley: asks that city/school work together on numbers around charter
freefall of 80's and 90's
O'Brien: city's initial contribution, subtract out transportation and other things: "fairly complex formula"
additional resources put forward, address needs in schools
a number of things that come out of the city side of the ledger
can be counted, or are always counted
(those are in 603 CMR 10)
Sullivan: had numerous conversations with schools
once that agreement is in place, only has to be revisited once there are major changes in the categories
so that everyone's aware of it, transparent process
Boone: yes, we have such an agreement
p. 341 of the budget has the services provided by city administration
(and that's the 54% that was spoken about last night. Or wasn't. But should have been)
Rivera: that's what the city is providing
Zidelis: yes, there's been an agreement between city and schools since 2007
checks issued by city treasurer
that's the 54% (it's 54.39% this year)
Boone: community perception is that we're increasing admin
"how do we fully outline those administrative costs for the community"
Sullivan: "there's a number of different ways that districts can" figure it out
can use a per pupil costs
can be negotiated
no requirement that methodology is reported: no verification
Wulfson: require signatures as verification of those numbers
Economou: all under same umbrella; here for greater good of the community
greater efficiencies
plan as to how we hold the floor
thinks that public knowing ins and outs of dollars may create confusion
how to implement into budget
where the OPEB funding comes into play
Foley: not made a determination yet on if it counts to Net School Spending?
Wulfson: becomes a double dip
can't be counted twice (as it will be counted as it is spent; it can't be also counted when it is set aside)
"merely a transfer of funds for a future expense"
can't charge same expense twice
O'Brien: can't have back and forth every year
don't want to defer OPEB obligations to a later date
Rob Cohane: (co-chair of CPPAC)
balance where we're at, learn from others
City Manager mentioned a comparison to Gateway Cities, that we're in a similar place to them
tried to find some numbers; most recent numbers went back to a Q2 number on FY11
had lowest above foundation of original 11; had second lowest of full 25
would like to understand where we stand among those Gateway Cities
Foley: lower level
"not a place any of us want to be"
Economou: only so much money in the pot
pulled in many directions
Novick: are there cases in which districts repeatedly year-after-year where the state gets involved?
yes, though they prefer not to; attorney general, talk to Department of Revenue at setting tax rate
most communities find that foundation budget is inadequate; statewide average is 20% over foundation
Johnson: Medicare reimbursement costs
why are those not returned to the schools?
Zidelis: reimbursement returned to schools
comes into city as general funds revenue; appropriated out to the school department budget
Wulfson: experience in many towns is that if the municipality is willing to share those funds with the district, increases wish to fully claim those funds
Boone: reimbursement style changed which impacted revenue
Zidelis: general fund revenues declined
Monfredo: how may give money back to school districts?
Sullivan: not reported separately
Monfredo: 20% above foundation
Wulfson: yes
Monfredo: urban average?
Hatch: lower than state average
Zidelis: once the new numbers come out, we can run that report
O'Brien: urban communities hover around minimum contribution
Talley: communication to public at large; need to show efforts being made
what's being done?
Boone: done in the budget executive summary, as well as in each category
proud of how we have shepherded schools through down economy
no fees, no loss of services
state and federal grants going away
Talley: to city as well as to schools; not readily clear
Foley: changes made in the city and school sides
more of a revenue gap: city required to meet a certain level of spending
Zidelis: as we go forward and develop our FY14 budget
"not as easy as additional revenues...we may not have the ability to provide additional resources"
"transparency...getting the word out...first time I've ever seen a document where all of the finance people agreed on"
may change the format of our budget presentation so our City Council understands the school spending, so everyone is clear on exactly what we are talking about with dollars
as we approach the issuance of our budget, we'll make sure that our documents are in sync
Foley: change of WPS budget timeline to early May
"chock full of great information and very transparent"
O'Brien: meeting of mayor with City Manager and Superintendent try to identify additional resources for schools

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