Quick note on Worcester School Committee meetings this week

 There are actually three!

• on Wednesday at 5, there's a Teaching, Learning, and Student Success meeting; the agenda isn't up yet, but expect that today now posted: preK, gifted programming, and the "modern classroom" project
  
  
  
• on Thursday, there's the regular meeting of the full Committee (exec at 5; public session thereafter). The report of the Superintendent is on future ready learning, which you might remember is a part of the Vision of a Learner adopted last year. 
  Without going into a lot of detail, note that Biancheria's student safety center item was held from the last meeting. There's a public petition (though without the petition itself, so we don't know who from) on installing electric charging meters for the public in the Forest Grove parking lot (the petition language says "free of charge" though the backup does not, nor does it mention the cost of electricity). The student advisory has submitted an item on staff mental health support. There are a number of grants for approval: homeless student supports, two on supporting community childcare, Perkins (which is voke money) for software management and a robot,  and a history field trip. 
  There's a request for an easement for Verizon at Doherty.
  Biancheria wants a report on therapy dogs, and one on homeschooling.
  Guardiola wants a report "on school meals and nutrition including current vendors used by the Worcester Public Schools."
  The administration is sharing the city's annual other post-employment benefits (OPEB) report.
  And on the agenda for approval ahead of the April deadline is the district's three year Student Opportunity Act plan.
  FWIW, I won't be at this, as I have a meeting to present at that evening.
  
  
• There's also a legislative breakfast--you might remember this being proposed in February by Member McCullough on Friday morning at Worcester Tech (and yes, that's a posted meeting); no agenda posted as yet. 

Notes on the March FY15 budget update (or "the bad option and the even worse option")

I thought it would be useful to give a bit of an overview of what the March update looks like.
There have been two major changes from the information that we were given in January:

• Updates from the state have changed the federal grant projection; now projected NOT to be subject to 8% cut under sequestration, a $821,248 positive change.
• Also, WPS is projecting a budget in which the city MEETS Net School Spending requirements: a $2.75 million change in foundation (that's the gap reported out late last year), plus a $660,000 non-foundation addition.

This is thus anticipates a $4 million addition--nearly all due to meeting Net School Spending--to the revenue available from last year

While we still need $27 million in increases, administration is now, thus, projecting a $23 million gap.
(Do note that this rests on the assumption that the city will AT LEAST meet its minimum obligations.)

The first proposed solution to this continued gap is to defer all of the following needs, all of which were requested by principals:

• 16 elementary teachers to deal with class size
• 11 secondary teachers to handle course choice and selection needes
• 5 special education teachers to appropriately serve that growing population
• 9 English Language Learners teachers to appropriately serve that growing population
• 19 Instructional Assistants to assist with special education students and others
• 19 tutor positions to give individual and small group assistance to students
• 6 school-based clerical for registration, parent, and other front office needs
• 2 school nurses for better coverage of schools
• 6 assistant principals to appropriately staffing schools
• 4 instructional coaches for assisting teachers in professional practice
• 3 credit recovery computer lab staff for students who are completing their studies despite earlier issues
• 2 school safety for security reasons in schools
• 1 wraparound coordinator to extend that service to another school

It also requires deferring:

• assistant principals in elementary schools that currently do not have them full time
• instructional assistants in every kindergarten classroom
• needed school safety equipment
• overdue maintenance on elementary school playgrounds
• upgrades to wireless technology to better cover schools

It will also mean that we do not plan this year for any sort of exam or selective admissions school.
WPS will also not fund the Other Post-Employment Benefits trust fund for this year

All of that still leaves a $7.6 million budget gap to cover, though.

To cover that, there will be restructuring and reductions in every department and restructuring, reducing, or eliminating of programs throughout the system.
It will also require the loss of:

• 11 tutors
• 20 elementary teachers
• 6 middle school teachers
• 14 high school teachers

With those cuts, the number of elementary school classes projected to be between 23 and 26 will jump from 211 citywide to 235.
At the secondary level, as Mr. Allen said on Thursday, there would be fewer options available for individual students in courses due to loss of courses in the full school schedule.

All of the above is with a projected meeting of Net School Spending, however; should the city not fund up to Net School Spending, the following additional cuts would be needed:

• 11 elementary teachers
• 16 middle and high school teachers
• 2 school nurses 

That would have the effect of raising the number of elementary classes between 27 and 30 from 53 to 70 citywide.
At the secondary level, as Mr. Allen said on Thursday, it would mean the reduction of some sections, the elimination of some courses, and loss of some Advanced Placement courses.

It would also cut $5 per pupil from the instructional budget, bringing back down to $63 dollars per pupil.
It would mean the loss of all community school funding.
It would also cut all athletics (and as Superintendent Boone commented on Thursday, she doesn't do that lightly).

Quick reminder here from me: WPS has two major revenue sources, the city and the state. The state pays for 70% of the school budget.

I have embedded below Thursday night's presentation by Superintendent Boone and Mr. Allen giving this update.
As always, more to come.

Meetings this week

A few meetings of interest this week:

• There is a meeting of the Finance and Operations subcommittee on Tuesday at noon. You can find the agenda here. In addition to the usual quarterly transfers and finishing up FY13, we've got a bit about completing forms online, security cameras, and OPEB.
• We have a special meeting of the full committee on Wednesday at 5:30 for training in the new evaluation system. The agenda is here, 'though that's all it says. Note that it (and the meeting above) are at the administration building in the 4th floor conference room.
• Later that evening, at the usual CPPAC meeting, Maureen Kavanaugh from the our data office is presenting on the MCAS results for the district. Maureen is excellent at what she does and is taking questions, so I'd really recommend coming to this if it is of any interest.That's at the downtown branch of the public library.

MASC 13: OPEB liabilities

As of 2012, MA state unfunded liability for OPEB was $16.7 billion
funding available (already set aside) would cover about 1% of liability
state has about $400M set aside; communities between $50-75M
GASB: "therefore the cost of these future benefits is a part of the cost of providing public services today"

Worcester School Committee meets on Thursday

The Worcester School Committee meets this Thursday for our last school year meeting.
We'll start in budget session at 4 pm with account 500-91133, School Nurses, to which it is proposed that we add three (hurray!). And do recall that no account of the budget is officially passed until the whole budget is passed by the School Committee meeting in budget session, and then by the School Committee meeting in regular session.
We'll recess to exec at 6, and be back at 7 (or thereabouts) for our regular session, for which you can find the agenda here.
As it is the last regular session, we have a large number of recognitions coming through (including this year's nurse and teacher of the year award winners). It's also the last meeting of Sergio Paez, who is heading off to be the superintendent of Holyoke. I've also just learned that Kaitlyn Furcinitti, who is coming through in recognition of her music scholarship, is going to be playing the National Anthem on the cello for us!
We have Governance and Employee Issues coming back with their report on the policies review.
We've also got a series of reports from last week's budget session, including a question on federal grant funding, what we have for gymnastics equipment, and what we might need to run a gymnastics team. If you're interested, take a look at that and let me know what you think.
We've got a response coming back to the Center for Nonviolent Solutions teacher course (that it's being publicized).
There is a proposal coming in from Mr. O'Connell and Mr. Monfredo that we comment on proposed regulation on school lunches (though the back-up is a letter from two majority members of the House Committee on Education and the Workforce, and I can't find the proposed regulation...a little confused on this one).
We have several proposed congratulations.
We're being asked to receive a donation to the Worcester Tech plumbing department from the Donald Martineau, Sr. Memorial Fund.
We're doing our annual selection of a delegate and an alternate to the Mass Association of School Committee annual meeting in November (willing to bet this one is coming in from Dr. Friel; if we register early, we save money!).
I've asked that the City Manager report on the short and long term benefits of contributing to an Other Post-Employment Benefits trust fund (that's OPEB; a report we haven't seen).
We're being asked by adminstration to consider all items filed by the School Committee in light of the FY14 budget (this is the annual "you know that these things aren't free" reminder).
We're supposed to be getting a mid-year report from Superintendent Boone relative to her goals prior to the meeting on Thursday. I'll post once I have it.
And then my item, below, (which apparently Mr. O'Connell contacted the clerk to co-sponsor) regarding questions on the One Library system.

Also, a reminder: we'll return to budget session after our regular session if we haven't completed the budget when we recess to exec at 6. We will, however, pass our budget, one way or the other, on Thursday night.

Worcester Public Schools budget back at Council : posting as we go

Petty: "maybe our final night on the schools budget"
Dawn Johnson: "my voice is the voice of parents who are maybe too busy to follow the budget"
"I know that I've made a difference in the life of a Worcester public schools student"
"tired and aggravated that once again we need to beg for money to try to provide an education"
$80 below the state average on administrative expensive (in house)
charges from city to schools for administrative costs
"and while we're talking about $3 million, that's how much money the city gets for services the Worcester Public Schools provide...why do we even bother filling out the paperwork?"
$5.53/$1000 of taxes goes to the Worcester Public Schools
"I want the Worcester Public Schools to be everyone's school of choice"
bottom 2% of net school spending across the state: "Shame on us"


Item from City Manager O'Brien:
"been active in conversation with me since last week"
"little room for opportunity"
desire to narrow the gap: right now it's about $430,000
"within the 2014, we do expect...debate between House and Senate...McKinney-Vento reimbursement"
"have used House version, lower reimbursement: estimated $253,000"
money transferred once it comes in
assuming the money comes in, that would leave a gap of $172,000
Commit to work to fill gap from free cash
"to have us at zero, once we have that number hard and fast"

Motion from Eddy: Request the City Manager appropriate $173,000 out of free cash to address the spending gap

That would bring it to hundred percent

Councilor Ruston

question regrading graphs: where has increase in administration occurred and why?
and does this include federal grants?
Zidelis: as their budget increases as a percentage of the city budget, the proportional share of the department
plus increase in technical services ('though not to schools; we're not getting more services)
Boone: grants do not count towards net school spending
Rushton asks for all spending, whether general fund or other sources
incidentally, we're pulled people off of grants, so if there were a change, you'd see it. There isn't one. No one is hiding administrators in federal grants. And don't take my word for it

OPEB: wants to know what would happen if we had to pull $30 million of the school system
Boone: "would decimate the school system"
Rushton "troubling to me" that there's no OPEB funding on the school or city side
"a real thing"
asks if OPEB could be included in net school spending: asks DESE, have not received a formal response at this time
have heard unofficially that it will not count towards net school spending
Rushton concerned about cuts on the order of Prop 2 1/2
Boone: would have enlarged net school spending gap
city could apply Medicaid reimbursement generated by Worcester Public Schools, goes into city general fund, could be used for OPEB
The city general fund gets $3 million each year for services provided by the Worcester Public Schools. The schools are no longer receiving any money from the city for providing this service.

Rushton: "I'm not asking you to reduce your budget; reallocation"
"with it comes the dollars that are spent as a result of that decision"
"just ignoring the problem and shifting the blame"
Boone: schools followed city's benefits structure on recent contracts

Rushton: "mystified on the premise that...two wrongs make a right"
"to do nothing is a failure"
Commend everything being done by administration

Three areas in which you would see future cuts?
Allen: "In anticipation of your annual question" the answer is on page 14 of the WPS budget
special education, school printing, energy savings


Okay, one editorial comment: there comes a time at which there is no place else to cut. I'd say we passed that several years ago.

Reporting out on Finance and Operations

Foley jokes that he's cut the slides down to sixty-five to make it a little bit shorter...

Other Post-Employment Benefits

Brian Fox; Frank Colvario; Roberta McCollum
what are your requirements?
setting up plans, maintenance of plans, employment of an actuary
Kodak: judge determined that retirees from Kodak (which went bankrupt) now have to pay $400/mo for health insurance from having paid $100/mo

OPEB:

• Other Post Employee Benefits; anything other than pension
• health care, other things

Mass had state $16.2B liability

$29-30B liability at municipal level

auditor discloses amount of liability

GASB: part of compensation that employees earn every year; cost is constantly accruing

Statements 43 and 45: plan sponsors were not accurately calculating, disclosure now required

municipalities are not required to establish OPEB benefits

don't have to set up an OPEB trust fund, either

OPEB trust: MGL c.32B Sec.20: vote of proper authority (vote of city council in Plan E)

must establish trust fund, establish custodian of assets, establish funding

custodian can be Treasurer of municipality or Mass Health Care Security Trust

Trust requires a written document on how it may be used and how it will be governed; requires a board of trustees

trustees of the fund are fiduciaries;can be held liable

Irrevocable employer contributions

assets used exclusively for OPEB benefits

appropriations must be approved (as any appropriations must be)

Trust must follow Prudent Investor Rule (MGL c.203C)

Fiduciary must act in best interest of the beneficiaries of the trust; use due diligence in selecting investments and other vendors; use assets for allowed purposes only; avoid conflicts of interest

annually by December 31, OPEB trusts must submit a summary of OPEB benefits costs and obligations to the Public Employee Retirement Administration Commission; PERAC must let the trust know of any concerns they have by June 30 

new actuarial valuation every 2 years for those with membership of 200 or more and every 3 years for plans with fewer members

Question: why not go "pay as you go" for now? We can't pay for what we have to do now. 

OPEB commission established by the state

wish for disclosure for long-term liabilities of municipalities and the state

engage an actuary to run projections of the benefit plan specifics you're contemplating

Note that there are costs associated with doing this: annual audit, actuarial estimates

AHA! Some towns are not doing it because it's going to even out. 

Need to look at actual costs projected, weigh benefits

example given of Central Falls RI and retirees benefits being taken away from them when the city went bankrupt

No, not input

Be sure you read more than the headline of today's coverage of last night's Worcester School Committee meeting in the Worcester Telegram and Gazette. The article is accurate; the notion that anyone on the committee is "seek(ing) council's input" is not.
Statutorily, as we were reminded last night, the ability to allocate funds within the Worcester Public School's budget belongs to the Worcester School Committee.
It does not lie either with the City Council or with the City Manager.
Do we have to fund Other Post-Employment Benefits? Yes.
Have we been doing so? Yes.
Do we--legally--have to do so ahead of time? No. We need to identify how we're going to do so ahead of time.
While there has been a great deal of discussion of the municipal bond rating, how good it is, and how paying for OPEB up front assists with that, there has yet to be any numbers associated with it.
In other words, we have been given no information that says that our superior bond rating is saving us more than paying for the OPEB is costing us.

And yes, the irony of having a superior bond rating in a city that continues to not meet its legal obligations on minimal funding of education has not escaped me.

OPEB, FY14, and the five year plan

You can find the report here.
and apologies, I asked the first questions here so I'm summing up
In sum, the City Manager is working with the operating number of $5 million for FY14 towards Other Post-Employment Benefits, with $3 million of that funding in the WPS budget
Note that the School Committee allocates funding within the WPS budget not the City Manager...
We've also got a rather daunting list of projections for FY14, including:

• sequestration, which would cut all of our federal grants by a projected 8.5%
• $1 million special education freeze with be gone
• all collective bargaining is due; each 1% raise will cost $2.2 million
• implementation MassCore
• increasing enrollment (which hits both facilities and staffing)
• Windows XP, which is on all existing computers, is done in 2014; estimate of $7 million to replace

THE CITY IS NOT PROJECTED TO MEET NET SCHOOL SPENDING BY $1 million for FY13

Allen: need to recognize the expense, you don't need to fund the liability, you can pay as you go
recommendation that we have joint meeting of the Council education committee and of the SC finance committee
"I don't want to be Jackie's headline about 'we started the budget wars' but maybe it's 'we've started the budget conversation'"
part of continuing conversations between the superintendent and the city manager, and the CFO's
('though I think that Mr. Monfredo may just have done so, with questions on Medicaid and grants)

Going to Finance and Operations