During a budget workshop last Thursday, the School Committee began the task of finding $3.4 million worth of cuts it must make in order to balance the budget after learning the approved city allocation fell short of the committee’s request.
Although the City Council added $437,000 to Mayor Scott Avedisian’s budget proposal, for a total school budget of $157.2 million, it’s still $3.4 million short of what the School Committee approved in May. There’s some sunshine for the committee as there’s the possibility of a $1.3 million surplus in the fiscal year ending June 30 lessening the blow.
During the workshop, Chief Budget Officer Anthony Ferrucci explained the district’s 40 budget managers went over their budgets and developed a list of areas to cut, starting with the least impact to students and leading up to the highest priority areas.
“Those items of the highest priority are listed last,” Ferrucci said, referring to a handout provided at the meeting with a breakdown of potential cuts. “It is our recommendation to re-seed the last items on the list, first in FY 2014 when/if funds become available.”
The list starts with the additional $437,832 in revenue received from the city; an additional $70,000 is reduced as a result of correcting a reporting error that had the salary of the summer school principal at $75,000 instead of $7,500; another $135,000 can be shaved due to the purchase of a math textbook series coming in under budget.
Initially, Ferrucci said, there was $100,000 in the line item for textbooks for FY13, which would be used to purchase books for grades 4 and 5 only, and the remainder of the books would be purchased with funds from the FY14 budget but because the department was able to identify set-aside funds, the full series was purchased in the FY13 budget, resulting in another $515,000 being reduced from FY14.
Since taking over as the superintendent of schools, Dr. Richard D’Agostino has vacated his previous position as director of special education. That position will continue to be left vacant for a $150,000 savings.
Ferrucci said another area the department can realize savings without affecting students or programs is in reduced costs in gas and heating oil, as the current price per gallon is down from what was projected in January 2013.
“We had budgeted $4 per gallon for gas and fuel, but we’re looking to lock in $3 to $3.25 per gallon,” he said, which results in a $200,000 savings.
The next $290,000 in savings comes from 10 percent cuts across the board in the following three areas: purchase services ($110,000), supplies ($80,000) and equipment ($100,000). Ferrucci said an additional $255,576 can be saved by eliminating operating losses in the food service area.
“The district has been experiencing operational losses of $175,000 to $200,000 in food vendor [services] over the years,” he said. “We have an opportunity to bring in a new company to increase participation, reduce food costs and do anything else to achieve a balanced budget.”
Ferrucci said the next $1 million in cuts would heavily impact students, as 10 certified staff positions would be laid off, resulting in the loss of some programs. When asked which programs would be affected, he said he can’t comment on it at the moment, as the matter was discussed in executive session prior to the public portion of Thursday’s meeting but added that information will be presented at the July 16 monthly meeting.
Continuing his presentation, Ferrucci said the final round of $800,000 worth of cuts would continue to negatively impact students. Cuts would include: $50,000 in music/arts equipment; $50,000 (10 percent) in technology-related hardware; $150,000 in transportation by eliminating two buses and increasing walking distances to state maximums and stopping the pick-up/drop-off at day care centers not on the bus route; and 10 percent cuts in both interscholastic sports ($90,000) and extra curricular activities ($10,000).
Ferrucci said he hopes to save an additional $50,000 in charter school tuition reductions and $150,000 in special education out-of-district tuition reductions, while bringing in an additional $15,000 in revenue by increasing tuition payments for summer school. He said another $45,000 would be saved by limiting outside groups’ access to school property, thereby reducing event overtime costs.
Cutting professional development services will save $40,000, and further cuts in interscholastic sports and extra curricular activities would also need to be sustained, again 10 percent in each, saving another $90,000 and $10,000, respectively. The final $50,000 needed to balance the budget would come from the elimination of a new proposed half math position.
That’s the bad news. However, Ferrucci said if a number of contingencies hold for the FY13 budget, which will soon be wrapped up, the school department could be looking at a potential $1.3 million surplus for FY13.
Ferrucci said $400,000 was set aside in contingency funding in the event the district was notified of any additional special education out-of-district tuition payments, which it must pay if it has any; $100,000 was set aside in contingency funding for litigation purposes; and $100,000 was set aside for contingencies in insurance premiums and office equipment repairs/replacements. If none of those contingencies are realized, and Ferrucci said it looks like everything will hold, that money will become surplus funds. In addition to the contingency funding, Ferrucci said he expects to realize $400,000 in savings in the salary/fringe benefits line item as a result of breakage and attrition with retirees, in which top step (most expensive) teachers retiring will be replaced with lower level teachers (less expensive). And in some cases, positions may not be replaced at all. On top of all that, Ferrucci said if each of the 40 budget managers could save between $5,000 and $10,000 in their budgets, it would result in an additional $200,000 to $400,000 in savings.
Although the final numbers aren’t yet in, Ferrucci said, “It wouldn’t surprise me if each budget manager was able to save $5,000 to $8,000, which could mean an additional $200,000 to $300,000.”
Ferrucci said $600,000 of any surplus is already earmarked to re-seed stipends and substitutes for professional development, but he hopes the remainder of the surplus would be enough to cover $800,000 of the proposed budget cuts, thereby restoring the highest priority areas with the most impact to students and programs.
“We’re trying our best to keep the line and keep things transparent,” D’Agostino said, following Ferrucci’s presentation. “We need to examine what we’re doing and how we’re doing it, and the long term facilities planning committee is important to that, with declining enrollment and finances.”
Although any realized surplus funds are planned to be used to re-seed as many cut items as possible, Ferrucci warned the school department can’t continue relying on surplus to plug budget holes.
“If we rely on surplus next year, we’ll be back in the same boat in February/March for 2014-15,” he said.
The School Committee is scheduled to vote on budget cuts at the July 16 monthly meeting at Pilgrim High School.