1 2010-2011 Superintendent’s Budget Presentation for Providence School Board April 12, 2010.

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2010-2011 Superintendent’s Budget

Presentation for Providence School Board

April 12, 2010

Key Information

Facility Changes– Addition of a 7th Grade at Nathan Bishop Middle

School– Additional 130 freshman entering PCTA– Beginning of a new plumbing curriculum at PCTA– The closure of Perry Middle School and Feinstein

High School are not assumed in this budget

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Budget Drivers

• Student Achievement– Class size, curriculum development, professional development, classroom

materials, extracurricular activities, smaller learning communities, common planning time, standards, and assessments

• Available Funding from State and City

• Changes to School Enrollment

• Labor Contract Obligations– Salaries, Benefits, Class Size

• Employee Retirement Contributions– State– Local

• Contract Obligations– Transportation– Custodial and maintenance– Outside tuitions

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Budget Unknowns

• Final State Aid Allocation to the District

• Final City Appropriation to the District

• Approval of a State-wide Funding Formula

• Final Federal Entitlements

Budget Assumptions

• State Aid will be level funded at the original amount for FY2010

– Governor’s FY2011 Proposed Budget calls for a $7.1 million reduction in Aid to Education for Providence

• The City appropriation to schools will remain at the FY2010 amount

– City funded 38.41% of FY2010 budget. Level funding of the FY2011 proposed budget is 36.6%

• Federal Entitlements will be level funded

• The approval of State-wide Funding Formula was not assumed

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FY2011 Budget Overview

• Proposed FY2011 budget includes a $16.8 million budget gap

• Level funding of City and State aid assumed

• No across-the-board salary increases scheduled for FY2011

• Negotiated wage freeze for Local 1033 employees

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FY2011 Budget Overview

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Expenditures

Proposed Expenditures $329,436,497

Expenditure Variances in FY2011 Budget(Summary)

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FY2010 Approved Budget $313,545,652

FY10-FY11

Description Variance

Salary & Benefits $14,863,973

Services $967,333

Materials & Supplies ($461,167)

Equipment $85,746

Utilities $434,960

FY2011 Proposed Budget $329,436,497

Expenditure Variances in FY2011 Budget(Detail)

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FY10-FY11Description Variance Total

FY2010 Approved Budget $313,545,652

Salary & Benefits:Salaries $9,728,541 Substitute Teacher Salaries $2,243,192 State Retirement $1,804,245 FICA $913,664 Medical Insurance $595,963 Dental Insurance $330,583 Workers Compensation $200,000 City Retirement ($695,102)Unemployment ($250,000)All Other Line Items ($7,113)

$14,863,973

Services:Transportation $1,407,976 Custodial Services $745,221 Rental of Buildings $169,591 All Other Line Items $130,155 Snow Removal $125,000 Tuition ($1,336,154)Other Fees ($274,456)

$967,333

Expenditure Variances in FY2011 Budget(Detail)

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FY10-FY11Description Variance Total

FY2010 Approved Budget $313,545,652

Materials & Supplies:Textbooks ($442,559) *All Other Line Items ($18,608)

($461,167)

Capital:Computer Hardware $105,726 Educational Equipment $52,408 Furniture & Fixtures ($72,388)

$85,746

Utilities:Natural Gas $500,000 Electricity $460,000 Water/Sewer $74,960 Heating Oil ($600,000)

$434,960 * FY2010 budget incl. $316k deferred payment

FY2011 Proposed Budget $329,436,497

City Revenue38.53%

Other0.64%

Medicaid1.36%

State Aid59.47%

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Revenues

Projected Revenues $312,575,472

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Revenues

FY2010 Approved Budget $313,545,865

FY10-FY11

Description Variance

City Appropriation $164,820

E-rate Reimbursement $65,000

Master Lease Reimbursement ($1,000,000)

Transfer from Indirect Cost ($200,000)

FY2011 Proposed Budget $312,575,685

Funding Formula

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• Three Key Funding Components

– Core Instructional Amount - $8,295 per student

– Student Success Factor – 40% of Core Instructional Amount $3,318 (available for students who receive free or reduced lunch)

– State Share Ratio – Equalized Weighted Assessed Valuation (EWAV) is the calculation used to determine the funding that a city or town receives

• How the Plan endorsed by RIDE might impact Providence

– Projected total increase in base funding over four years = $28,667,235

– An additional $5,548,728 in state aid in FY2011

– Additional funding possible for Career & Tech programs and Extraordinary costs for students with disabilities would result in an additional $2.5 million

• Unknown issues concerning the funding formula

– What is the base amount of funding available – FY2010 Original State Aid or FY2011 Proposed Aid?

– Will the Maintenance of Effort Law for the City be changed?

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Continued Efforts to Reduce Expenditures

• Re-negotiate transportation contract extension

• Utility savings through arrangement with National Grid and City

• Reduction in warehouse rental costs

• Refinancing of current debt issue with Johnson Controls

• Continued review of every line item in budget based upon more information received from FY2010 experience

• If state and local aid is not provided in an amount to fill the $16.8 million budget gap, some of the following actions will be necessary:

– Layoffs– Salary reductions– Furlough days– Co-share increases– Transportation changes– Deferral of vital capital purchases– Suspension of state mandates– Suspension of all programs and extra-curricular activities outside the BEP

• The local budget is approximately 79% salary and benefits. It would be unrealistic to expect that a $16.8 million budget gap can be addressed without reductions in this area.

• Total salary expenditures in FY2011 is $175 million

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Actions to Fill Gap

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Budget Schedule (Anticipated)

• April Budget workshops• April 26 Budget submitted to Mayor• May 1 Budget submitted to Council• June Council budget hearings • June-July Final state aid determined• July Council adopts city budget• July-August School board approval• July-August Council approves ordinances