Wednesday, January 21, 2015

Finance Committee update (1/21/2015)



January 21, 2015

I attended the Finance Committee meeting tonight.

The FinCom discussed the three warrant articles that the School Committee placed on the February 24th Special Town Meeting.  They were not voting their positions on the articles yet, but just wanted to understand the request.  

I then updated them on our budget based on last night's meeting.  Here is what I shared with them:

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The School District’s initial FY16 draft level-services budget:  $25,324,588
(School Committee reviewed January 20th

This represents a 1.7% increase over our updated FY15 budget (or $426,880).

The top two drivers of this increase are: 

1.      Salaries (includes contractual step/lane salary increases for district unions; it does not include raises for administrators or other non-union employees) -- $339,789 

2.      SPED Out of District Tuition and Transportation -- $387,539 increase over the current year...for which the School District has no control and cannot predict year over year (or within the year). 

This budget would NOT bring back any staff or programs eliminated in the current year (including all the sports and clubs that were cut but restored ONLY due to Private Fundraising efforts) 

This budget does not factor in any additional increases due to contract negotiations for which we have several open, including the teachers. 

This budget has already factored in a reduction of 4 buses resulting (estimated to be a year over year savings of approximately $98K -- currently out to bid and expecting a rate increase.

Our current projected Revolver Balance for the end of this current fiscal year is $1,415,461.
We project to receive $1,395,498 in revenue to the revolvers in FY16.

If we received no other increase from the town other than a minimum increase in Chapter 70 (estimated to be $60k), and based on using $1.8M from our revolvers, (to maintain a balance of $1M), this would leave an $857K deficit to fund this level services budget.


This does account for expenditures of about $90k for the projects we are requesting reimbursement at the Special Town meeting...which could increase that available balance if approved.


In closing, I reiterated my comments about the need to look at the entire town budget and work together on an overall town solution, not placing the burden of the deficit on just one town department (i.e. the schools).  This is not a school only issue, this is a town issue, and we must all work together to find a solution.

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Although no formal position or opinion was shared at this time, I sense that there is general support from the committee for the schools, although acknowledging the overall funding limitations of the town.  They asked some excellent questions about the cuts made last year, the impact on the current school year, and unfunded mandates.  We updated them on the busing situation.  We will continue our dialogue with the FinCom, and will be formally presenting our budget to them on March 11th.

By the way, one comment by the Town Manager was very interesting.  When asked what guidance he had given to the other town departments, his response was "level-funded, plus any contractual raises."  Those of us from the schools were surprised to hear that, because our Town Appropriation does not increase annually to cover "contractual raises."  Of course, with 335 school employees, that impact is a lot more significant than what would be needed on the town side, but the town contribution (revenue directly from the tax base) has only increased by $124K average per year over the past three years.  As mentioned above, our contractual raises for next year would equal $339K.

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On an unrelated note, they also discussed with the Town Manager the Town Warrant article for the new business moving to town and the TIF agreement that the town will be asked to approve at the Feb. 24th meeting.  The agreement would be for 5 years and would provide the business with a discounted tax rate on an addition they plan to build on their property.  The TIF won't apply to the existing property, only the addition.  The discount would be 50% in the first year, 45% in year 2, 40% in year 3, 35% in year 4, and 30% in the final year of the agreement.  The amounts are not large, but over the five years, this portion of the property will generate a total of about $34K to the town.  On the other hand, this saves the company about $22K over the five year period.  


Monday, January 19, 2015

Draft FY16 Budget Review

January 19, 2015

On Tuesday, January 20th, the Northbridge School Committee will review the draft FY16 budget.  The meeting will be held at 7pm in the High School Media Center. 

-- The full agenda and information packet can be found here:  January 20th School Committee meeting  
-- Additional information, specific to the budget can be located here:  Initial FY16 Budget Documents

Based on the guidance provided to the Administrators in November, what we will see will basically be a level services budget.  As a reminder, this means that the same staff, services and programs that we have this year, will be replicated in the FY16 school year's budget.  Of course, like everything, the costs for these services will increase year over year.

Additionally, any known changes in staffing (retirees/resignations), student services (out of district tuition/transportation), and other services will be factored in.  The budget also shows a decreased amount for busing based on early estimates and the changes made to our busing parameters.

The initial budget figure is $25,324,588.  This reflects an increase of $538,690 (or 2.17%) above what was approved for the current school year. 

Tuesday's meeting is our first formal discussion about the budget.  It is intended to be an opportunity for the committee to ask questions of the administrators to be sure we understand the changes/impacts.  It will be the first of several meetings, I expect, that we will discuss the budget, how to fund it, and if there are additions or reductions, what those could be. 

Additionally, on Wednesday, January 21st, I will be attending the Finance Committee meeting at 6pm (in the Board of Selectmen's Room at Town Hall) to discuss the overall town budget process for the coming year.

Wednesday, January 7, 2015

Northbridge School Comittee Updates on Busing and Budget

January 7, 2015

Busing Update
 
At last night's School Committee meeting, the committee voted to authorize the Business Manager to put out a transportation bid for 14 buses.  This would reflect a reduction of 4 buses from the current level of bus service provided for students.

Prior to making this decision, the committee met to review 4 scenarios, as well as to discuss their concerns and those of residents and parents.  The committee did not take this decision lightly.  I feel that the scenario that the committee moved forward with was a reasonable compromise between what we are providing today and what we are required to provide by law.  We also saw a scenario for implementing a bus fee, but did not take any specific action on that.

Below is a chart which shows the current busing parameters compared to the parameters that would support the 14 buses.
 
     Current Busing scenario:
         
     Proposed Busing scenario:
      
 
As you can see, this will impact approximately 313 students, but will save the district more than $230K.
In the proposed scenario, 569 of them are outside of what is legally required for busing and the district could charge a fee for those students to ride.  Based on a $180 per student fee, that could net the district an additional $35-40K in revenue to further offset the busing costs, saving a total of $270K annually for the district. 

Special Town Meeting Articles:
 
On Monday night, the Board of Selectmen voted to schedule a Special Town Meeting on Tuesday, February 24th at 7pm.  The primary purpose of this meeting will be to approve a TIF agreement with a new business moving to town (see T&G article here).
 
With this opportunity for another town meeting, the Committee last night voted to submit three Articles for this meeting to request reimbursement from the town for three of the capital projects which were rejected by the Fall Town Meeting, but were projects that the school department had to execute.  The committee's expectation would be that this money could come from Free Cash, which was certified approximately $200K higher than expected, however, we will work with the Town Manager, Board of Selectmen and Finance Committee on the best funding option for the town.  
 
I hope you will attend this Town Meeting and support the School District's request.  Any money recovered for these projects will be available for the FY16 budget, and we know that every penny will count.

These are the articles we approved last night:

1. To see if the Town will vote to transfer from the FY 15 Omnibus Budget, and/or transfer from available funds in the Treasury, and/or transfer from the unexpended undesignated fund balance (free cash), and/or transfer from the Stabilization Fund the sum of $36,800 to be used by the School Department to recover the cost incurred for repairs made to the Balmer School Kitchen; or take any other action relative thereto.

2. To see if the Town will vote to transfer from the FY 15 Omnibus Budget, and/or transfer from available funds in the Treasury, and/or transfer from the unexpended undesignated fund balance (free cash), and/or transfer from the Stabilization Fund the sum of $28,940 to be used by the School Department to recover the cost incurred to replace the Middle School Auditorium air-cooled condensing unit; or take any other action relative thereto.
 
3. To see if the Town will vote to transfer from the FY 15 Omnibus Budget, and/or transfer from available funds in the Treasury, and/or transfer from the unexpended undesignated fund balance (free cash), and/or transfer from the Stabilization Fund the sum of $26,240 to be used by the School Department to recover the cost incurred to replace the two Middle School Locker Room make-up air units; or take any other action relative thereto.

Updated Budget Timeline
 
With the scheduling of this Special Town Meeting, the committee also modified its budget timeline.  Our original FY16 budget hearing was scheduled for February 24th, but with this new meeting, we have changed that date to March 10th.  Subsequently, we also have changed the date on which we will approve our budget to March 24th.
 
We have also added a January 21st meeting with the FinCom to which the School Committee and Board of Selectmen Chairs have been invited.