by Erica Plunkett
3/11/2014

The meeting focus was primarily financial.  Business Manager presented a proposed bus fee schedule for FY15.  The program details:

·         Fee instituted in FY2009

·         The fee since inception has been $225, with a family cap (two children) of $450

·         The program follows state distance guidelines of free transportation for K-6 students living greater than two miles from their school.  The distance is measured from their home driveway to the school driveway, utilizing online measurement tools (the District no longer drives it).

·         Fees are generally collected June-mid July, with an administrative late fee of $25 

The receipt history is as follows:

1.      FY 2009    Expected Revenue: $285,000 (no history)  Actual Revenue: $207,200 (number of buses reduced based on the lower number of actual riders to bring it into balance)

2.      FY 2010    Expected Revenue: $195,678                   Actual Revenue: $207,118

3.      FY 2011    Expected Revenue: $220,678                   Actual Revenue: $206,038

4.      FY 2012    Expected Revenue: $220,678                   Actual Revenue: $207,716

5.      FY 2013    Expected Revenue: $220,678                   Actual Revenue: $204,678

6.      FY 2014    Expected Revenue: $220,678                   Actual Revenue: $200,310 

Even with the actual receipts, the school budget is still subsidizing some of the transportation.  And compared to surrounding towns, Holliston fees are on the lower side.  Please note, again, the District is ONLY allowed to charge fees to those NOT eligible for free transportation.  Currently, the District is NOT allowed to spread the fee evenly across all ridership. Representative Dykema has proposed legislation to change this and the Holliston School Committee supports her efforts. 

The new fee proposal for FY2015:

·         Targets a $25,000 increase to get actual receipts to catch up to anticipated revenue

·         It uses current year data (number of passes sold is 931.5)

·         The number of families who receive a free pass(es) based on the current cap is 53

·         Proposes raising the cap from two fees to three fees (or students), generating $11,925

·         Increases the individual fee by $15, generating $14,767.50

·         The total generated will be $26,692.50 (and it is anticipated that some families will drop pass purchasing with the family cap increase, getting the District closer to the $25,000 needed). 

Next on the agenda, Dr. Jackson presented the revised finances for the proposed new initiative, Tuition-free, Full-Day Kindergarten.  These figures were arrived at in collaboration with the Town Administrator, and incorporate benefits.  Dr. Jackson noted that these are good faith estimates for the five-year costs of FDK, and projections are based on assumptions, especially salary levels, which are subject to collective bargaining.  His revised projections can be found on the District website: http://www.holliston.k12.ma.us/sc/SCMinutes/fdka.htm 

And, you can watch it in its entirety on HCAT (http://www.hcattv.org/programming/education-channel/new-individual-program-page-3/).  Further changes to the FY15 budget are in BLUE, in terms of closing the gap between the Fin Com guideline and the Superintendent’s recommended budget and here is the link to the presentation: http://www.holliston.k12.ma.us/Budget/fy15srbr2.pdf 

The Finance Committee guideline across the board, determined with an eye towards ensuring the long-term viability, with any excess revenues to be set aside, for ALL departments is 1.5%.

·         The FY14 School Budget was $29,556,396

·         The Fin Com recommended FY15 Guideline would result in a budget of $29,999,741

·         That is an increase of $443,345 or 1.5% over FY14. 

This year, Dr. Jackson took a slightly different approach to developing the budget, with an eye towards increasing the transparency of the process and further identify the moving parts of a school budget.  The top four comprise a level-service budget: 

1.      Anticipated Expense Increases

2.      Anticipated Expense Decreases

3.      Anticipated Revenue Decreases (independent of town taxes; it includes things like grants and fees)

4.      Anticipated Revenue Increases

5.      Recommended New Initiative(s) 

The major issue remains looking to find funding sources for the first year cash flow gap of $466,689. 

1.      Anticipated expense increases:

·         Outfit two classrooms ($30K)

·         2.0 FTE Teachers ($94,413)- (assuming one hire at B2 and one at M2; this amount was originally $110K)

·         FTE Paraprofessionals ($32.670)

2.      Anticipated expense decreases:

·         Eliminate mid-day bus run (-$40,500)

3.      Anticipated revenue decreases:

·         Loss of tuition revenue ($350,106)

Total FY15 cost: $466,689 

Moving on to present Dr. Jackson’s FY15 budget:
1. Anticipated expense increases:

·         Out-of District SPED placements (NOT total SPED costs) for a handful of students -$446,423 ($300k+ covers just one student in an out-of-district residential placement)

·         Required/Projected salary adjustments (unspecified due to ongoing collective bargaining- $279,999

·         Utilities/Heating oil- $77,883

·         Norfolk Agricultural tuition- $56,485

·         In-District services (for SPED, PT/OT)- $52,000

·         Home/Hospital Tutors (which are exploding this year due to the number of hospitalizations of students, nearly one/month, due to anxieties, etc.)  The District is trying to get this more under control with online education- $27,000

·         Building cleaning contract- $23,721

·         Regular transportation contract- $13,164

·         Middle School (which has been level funded since its inception)- $3,201

·         SPED legal services (ensures compliance)- $2,000

TOTAL ANTICPATED EXPENSE INCREASES- $981,876

2. Anticipated FY15 Expense Decreases:

·         Reduce 2.0 FTE Teachers (HS, subject TBD; Elementary Unified Arts Teacher)- Administrators are revising the teacher schedule to reduce the staff but the students will receive the same required programming in Unified Arts.  And teachers will still maintain the required planning time as required by contract). -  $111,851

·         Implement FY14 budget freeze/pre-buy FY15 supplies- $70,000

·         Convert vacant Placentino/Miller position to contract services- $12,000

TOTAL ANTICIPATED EXPENSE DECREASES- $193,851 

3. Anticipated FY15 Revenue Decreases:

·         Reduce projected use of School Tuition revenue to match FY14 actuals (we’ve been spending down reserves faster than we can fill them to mitigate the effects of low budgets and to hold classrooms harmless to the extent possible)- $115,816

·         Reduce projected use of Bus Fee revenue to match FY14 actuals- $25,000

·         Reduction in Federal Grant income- $11,921

·         Reduce projected use of Activity Fee revenues to match FY14 actuals (to put it bluntly, not all families have been paying their agreed upon activity fees and not all activity leaders have been enforcing their collection)- $10,000

TOTAL ANTICPATED REVENUE DECREASES- $162,737 

4. Anticipated FY15 Increases:

·         Projected increase in Circuit Breaker revenue (SPED; assuming level reimbursement rate of 72%)- $88,996

·         Increase Bus Fees to offset anticipated revenue loss (bus fees have remained flat since their inception)- $25,000

·         Increase in HS Activity Fees to offset anticipated revenue loss- $5,000

·         Increase MS Athletic fees to offset increased expenses (this is a self-funded program and fees have stayed level since their inception)- $3,201

TOTAL ANTICIPATED REVENUE INCREASES- $122,197 

Revised FY15 Budget:

FY14 Budget- $29,556,396

1. Anticipated Expense Increases- $981,876

2. Anticipated Expense Decreases- ($82,000)

3. Anticipated Revenue Decreases- $162,737

4. Anticipated Revenue Increases- ($122,197)

Recommended New Initiative(s)- $466,689

Superintendent’s Recommended FY15 Budget- $30,851,650 (which is an increase of $1,295,254 or 4.38%) 

Budget Increase Analysis:                                                                 

Maintain Current programs/services- $828,565 or 2.80%

Add Tuition-free FDK-                      $466,689 or 1.58%

Total Recommended Increase          $1,295,254 or 4.38%              

While the School Committee is not voting on the FY15 budget until the next meeting, Dr. Jackson asked for some input on his budget.  At this point, these are his final recommended reductions which will allow the District to provide the same level of service as this year.  Any further reductions to close the remaining gap or $828K+ will likely be staffing and will directly impact class sizes.  At roughly $50K for a teacher, reductions would encompass eight teachers (with the two suggested cuts above, the District will have cuts 26.5 FTE in the past six years).

The Budget Sub Committee has already had one very robust discussion around the two gaps in the school budget and will continue these, as the town moves towards Town Meeting.  Numbers from the state are not expected until mid-April, continuing to make final decisions challenging. Mrs. Galeaz-Weber asked Dr. Jackson to reiterate the differences between the operating budget gap vs. the one-time expense that FDK means, which will not be added to the District’s yearly bottom line.  While there are ongoing expenses to FDK, the majority of the $466K will be reimbursed with Chapter 70 money.  Holliston has made a habit of not using one-time funds to pay ongoing costs, as this results in a funding cliff.  For example, the federal stimulus money, temporarily covered run rate budget items (as was required), but when the ARRA money ended, the District’s bottom line was impacted.   

Gap Analysis/Funding Plan:

Required Funds to maintain current services: $940,416         Required Funds to add FDK: $466,689

Fin Com Guideline:                                        $443,345                                                         $0

GAP                                                                $497,071*                                                       $466,689**

* Plan to close gap to maintain current services: review staffing plan for possible reductions; request additional appropriation to fund any remaining gap (At this time, Dr. Jackson is not recommending any further cuts)

** Plan to close gap to add FDK: Consult with Fin Com regarding possible sources to meet one-year funding expense.                     

The last financial item on the agenda was a review of the District’s Revolving Accounts.  Two spreadsheets were presented that are too involved to post here, but the summary of the discussion is as follows:  Revolving accounts exist to allow municipal entities to accept funds/receipts and expend the proceeds of these accounts without further appropriation.  The revolving accounts were presented as being in two major categories: one in which money can be used for any purpose (General Revolving)  and one in which money can only be used for the purpose it was intended (Restricted/Limited Use) such as bus fees.  Bus fees can only be utilized to provide transportation.  They cannot be used for non-transportation staff, or textbooks, etc.  

Within each of the major categories, there are minor categories defined by their source: Local Funds or Non-Local Funds.  Examples of General Revolving Local Funds are: School Community Use, and Pre-K/ Full-Day K Tuition.   Examples of General Revolving Non-Local Fund, are Cable TV Rental, School Choice, and SPED Tuitions.  Examples of Restricted/Limited Use Local Funds are Athletics, Activities, and Cafeteria.  An example of Restricted/Limited Use Non-Local Funds is the Circuit Breaker Fund.  Circuit Breaker is the state program where the cost of high-cost special education students is reimbursed by the state at a certain percentage over four times the foundation cost per pupil. For example, there is a student who had to be placed mid-year in a residential outplacement that costs over $300K annually.  About 72% of the cost exceeding four times what it costs to educate a “general” education student will be reimbursed NEXT YEAR by the state.  Circuit Breaker funds cover unanticipated extraordinary expenses and can ONLY be used for that purpose.  In fact, a balance of CB funds are supported and encouraged by the Mass Dept. of Revenue. 

The gist of the conversation was to alleviate any concerns that the School Department has an excess of funds in their revolving accounts.  The bulk of this money, the restricted Circuit Breaker funds, is not being used behind the scenes to pay for things like buses.  General funds, like School Community Use are used to pay for expenses incurred.  For example, items such as maintenance people opening the schools when the schools are closed to allow the community to rent the gym to play basketball.  Dr. Jackson noted that the establishment of revolving accounts is the result of conversations that took place prior to his leadership, but the School Committee, the Fin Com, and the BoS, agreed on the schools maintaining these balances for the express purpose of enabling the School Committee/School Department to deal with one-time, unexpected budget issues, without having to come to the Fin Com for every emergency.  Additionally, with General revolving funds at just about $400K, with some of that money already committed to spending next fiscal year (it is a timing issue where the revenue is received in the fiscal year prior to the fiscal year the expense will occur) in a nearly $30M budget, the reserves are getting quite low.

Last on the agenda, the Committee voted to approve two Overnight Field Trips, for All-State Music Festival and Nature’s Classroom. 

The next meeting is March 20, 2014.  Central to that agenda will be: FY15 Budget discussions; Policy; Professional Day summary; and the Superintendent Evaluation.  Office Hours are on the website (http://www.holliston.k12.ma.us/sc/SCOH.htm), but the next one is Thursday, March 27, 8-9 am, at Coffee Haven.  In the meantime, if you have any questions or concerns, please don’t hesitate to contact Central Office or any School Committee member.   

Did You Know….Yet another community is looking to implement Tuition-free, Full Day Kindergarten! http://www.telegram.com/article/20140306/COULTER03/303069972/1330&TEMPLATE=COULTER

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And here’s another interesting article on full-day Kindergarten in the New York Times: http://www.nytimes.com/2014/03/07/education/full-day-kindergarten-not-pre-k-should-be-new-yorks-go