The School Department made its pitch for a $160.5 million budget, a $3.2 million increase in spending, to Mayor Scott Avedisian Friday afternoon in a session that reflected the cooling temperatures outside and left little doubt the mayor wouldn’t fund the full request.
“I thought Beth [Furtado, School Committee chairwoman] was going to be here. None of us have had a chance to read it [the budget],” the mayor said after everyone was seated around his office conference table.
Superintendent Peter Horoschak and school chief budget officer Anthony Ferrucci came with copies of the 31-page budget bound in plastic folders. There were enough for the mayor’s team, comprised of chief of staff Mark Carruolo, Finance Director Ernest Zmyslinski and financial analyst Diane Brennan and one for City Council President Bruce Place, had he been there. Place is a critic of the department’s cost-saving strategy to post the budget online and not even distribute copies to the people who decide the fate of the request. He would have been happy.
After a few moments of silence with the mayor and his team with copies in front of them, Horoschak proceeded with an overview, saying that the department’s basic operating budget is unchanged but said the need to complete a 3-year $10 million program to bring buildings up to fire code and “significant costs in non-personnel areas” were responsible for the added $3.2 million.
The added amount is actually $1.7 million less than what the department initially proposed. The School Committee made the cut last week after revising its proposal to finance fire code improvements.
The requested budget calls for $123.9 million in city spending, an increase of $4.2 million or 3.6 percent.
“That’s kind of where we stand,” said Ferrucci.
Continuing with the big picture, Ferrucci said there is “little pressure on salaries” and, apart from fire code improvements, a new roof at Park School, technology upgrades and textbooks, the schools are faced with making up for the $2 million surplus used to balance the current budget.
This structural deficit, he said, is partially offset by a projected increase in state aid, a slight surplus from the current budget and the savings that came from teacher pension reforms at the state level. When added up, and a deduction of $1.3 million is made for teacher step pay increases, Ferrucci said the department “is about $1 million of where we are today and where we go tomorrow.”
Avedisian leafed through the document as Ferrucci spoke, making notes on a yellow pad. His questions focused on the plan to finance fire code improvements.
Initially, the department proposed asking the city for the full $3.3 million it plans to use this summer for eight schools, even though it has the authority to borrow those funds. The idea was that the bonding could be used for successive phases of the program, thereby ensuring that the design and contracting of the work would be in place and ready to start as soon as schools close.
The school committee questioned the plan, as it required the city to underwrite the improvements scheduled for this summer. They left the bonding in place, which cut the budget by $3.3 million. But then they added about $1.7 million to fund a portion of the second phase of improvements to start next year.
If granted by the mayor and council, the $1.7 million would come from school operating funds. Further, by including it in the operating budget, it would increase the city’s “maintenance of effort” to schools, meaning it would be built into the budget for the following year.
“You’re suggesting not taking on the debt and principal?” the mayor asked.
The mayor, who has refrained from issuing bonds for a number of projects approved by voters in the early 2000s to reduce debt-carrying costs, noted that school indebtedness stands at about $33 million while the city is at $18 million.
Schools would like to use some of that bonding to complete the fire code upgrades.
“We’re not expecting to have others [school bonds] released,” said Horoschak, “but we have to go back and clean up the fire code. We don’t have any choice.”
In an email, the mayor said yesterday that, “We will be assessing bonding requests as to what the city can afford and will decide if any additional bonding should take place.”
Carruolo suggested another means of coming up with the money – close one of the city’s three junior high schools.
“The raw numbers say we can do it,” said Horoschak.
However, Horoschak doesn’t see a decision being reached in time to close a school this year. A committee examining the consolidation of secondary schools, in response to declining enrollment, has put off making a decision until a review of the full system from kindergarten through high school is completed.
“And, when you close a school, you don’t see immediate savings,” Ferrucci added.
Zmyslinski questioned school technology initiatives, learning that the department is moving toward a day when students will have handheld devices – digital tablets – costing in the range of $250 to $300 each. Such a system is projected to cost $6 million.
In another line of questioning, Ferrucci disclosed that the department projects to level-fund its health care system now managed by the West Bay Health Collaborative. West Bay administers the plan for a cost per participant, with schools paying claims. The cost in claims and payments total more than $20 million annually.
In response to Avedisian’s question, Ferrucci said schools have a $4 million reserve with West Bay. Ferrucci said the department is required to maintain the reserve for unsettled claims and that premiums would increase if it sought to draw down that money. The schools’ contract with West Bay ends in another year.
That being the case, Avedisian questioned the logic of City Council suggestions to include schools with requests for proposals to manage the city’s health plans.
“Adding further confusion to it is not sensible,” he said.