Final Report Board Finance Committee and Budget Advisory Committee 2010/2011

Transcription

1 Final Report Board Finance Committee and Budget Advisory Committee 2010/2011 The finance committee, consisting of Elisa Scott, Mark Doyle (in Robert Frey s Absence), and Robert Ramus developed a charge for a public advisory committee to make recommendations to the Board on 2011/2012 budget planning and development. After an open call that was publicized in local newspapers, on the district website, and via Connect-Ed messages, members for a Budget Advisory Committee (BAC) were selected and the first meeting was scheduled for mid-november. Committee members are as follows: Community Members: Arnold Lustig Barbara Britt Charmaine Famularo David Grier Donna Marie Scott Doug Norton Irina Sourikova Isak Prohovnik James Laffey Maureen Sullivan Michael Barrett Richard Righi Richard Savino Richard Ward District Staff: (Attended meetings regularly and acted as consultants in their specialty area) Maureen Hull (Administrator) Ellen Boehm (Paraprofessional) Laurie McMillan(Teacher) BOE Members: Elisa Scott Mark Doyle Robert Ramus (Committee Chair) Administrative Liaison & Business Consultant to the Committee: Mark Flower The committee met on the following dates: November 10 November 23 December 7 December 22 January 5 Final Report Board Finance Committee and Budget Advisory Committee 2010/2011 Page 1

2 January 19 February 2 February 16 March 2 March 16 April 6 June 1 Attached, as an appendix, is the committees final recommendation and an additional rider to that recommendation. But it s worth noting that the committee spent a significant amount of time hearing the advice of our business administrator as well as other subject matter experts throughout the district before coming to any conclusion. They reviewed at all discretionary, non-instructional expenses, fund balance figures, and program related expenses in order to find opportunities to reduce costs. The committee weighed the facts and benefits of every recommendation in order to make an informed choice. In the end they recommended that the Board execute cost reduction with the following priority in mind: 1. Budget or spending reductions resulting from aggressive and timely contract negotiations with the district s various collective bargaining units. 2. The administration s proposed list of Non-Instructional reduction opportunities. 3. Operational efficiencies resulting in headcount reductions of support staff and/or administrative staff as appropriate. 4. Program change proposals from the ES Principal, MS/HS Principal, and the Athletics Director as a last resort to close any remaining reduction gap. The committee met again one last time on June 1 to discuss long term financial planning. Mr Flower presented several scenarios for the committee to consider and discuss. Naturally it s impossible to develop such a plan in one sitting, but after some deliberation, the committee developed the following expectations and recommendations for a long term financial planning when the new Board begins in July. Expectations: Develop a forecast for capital improvements, preventive maintenance, and replacement of worn equipment & facilities. Increase community involvement through better communication and refining a clearer message. Start the planning cycle earlier. Provide a better overview & understanding of program components. Constant improvement. Annual review. Engage (and provide a small budget for) guest-speakers/advisors with experience in similar situations. Continued improvement in transparency as the process unfolds; it was noted that this has improved over the past couple of years but more could still be done to make it better. Streamline and categorize the budget codes to allow for easier understanding Final Report Board Finance Committee and Budget Advisory Committee 2010/2011 Page 2

3 Recommendations: Look at other similar districts that provide a good educational value and model budget planning/program cost similarly. Investigate other sources of revenue. Develop reserve plan Develop tax rate plan Develop other options to reduce costs There was one action item that came out of this meeting, and that is for Mr. Flower to lead a comparative analysis of our expenditures vs similar districts. The goal is to provide an appropriate budget utilization level through a tax rate analysis of district level academic achievement vs cost per student. Mr. Flower is progressing in that work and the expectation is that it will be ready for the July 5 th BOE meeting. As a final word, I would recommend that as the Board sets the agenda for the coming school year in July, this committee be re-established in order to continue the work they have started in financial planning. The committee should be engaged sooner in order to provide the greatest benefit in time for them to help develop the following years budget and spending plan. And to populate this committee, I would recommend that the Board make another open call for membership but give preference to the members who sat on the committee this past year. During that time they were given a significant amount of information regarding the school budget and gained insights that are not readily apparent with a shallower review. It was my pleasure to chair this committee, I commend everyone that participated for their hard work and look forward to next year. Best Regards, Bob R Final Report Board Finance Committee and Budget Advisory Committee 2010/2011 Page 3

4 Appendix BAC Recommendation March 8 th At the March 8 th Port Jefferson Board of Education meeting, the Port Jefferson Budget Advisory Committee made the following recommendation; The Port Jefferson School District, Budget Advisory Committee makes the following recommendations to the BOE as a two-tiered approach to budget development for the school year. 1. The committee recommends that the BOE plan a budget which keeps the tax rate stable and develop a detailed spending plan, to be presented to the BAC before the April 12th BOE meeting, that will bring a budget-to-budget reduction of between 5 and 7.5%, or $35,486,795 and $34,627,641, and prioritized as such: a. Budget or spending reductions resulting from aggressive and timely contract negotiations with the district s various collective bargaining units. b. The administration s proposed list of Non-Instructional reduction opportunities. c. Operational efficiencies resulting in headcount reductions of support staff and/or administrative staff as appropriate. d. Program change proposals from the ES Principal, MS/HS Principal, and the Athletics Director as a last resort to close any remaining reduction gap. 2. The committee recommends that before June 30, 2011, the BOE create a multi-year contingency plan, 3-5 years forward looking, to address all conceivable potential revenue changes, especially changes that would result from significant loss of income due to assessed value reductions in the power plant currently adjoining the PJ harbor and currently owned by National Grid. This plan should take all aspects of district operations into consideration, including proposition of a referendum to reduce bussing costs and reductions resulting from continued negotiations with all district bargaining units, but yet attempt to minimize the negative effects on the educational program while maintaining a focus on making core programs stronger wherever possible. Subsequently, the committee discussed and resolved a spending plan and tax rate strategy as such: The committee recommends that the BOE adopt a spending plan (budget) of $35,462,362, a 5.07% budget-to-budget reduction, for the school year. The committee recommends that the BOE not apply any remaining fund balance and they not draw on reserves as part of the school year revenue plan. The committee recommends that a budget item be added to the spending plan so as to increase funds in the Suffolk County Tax Act Deferred Revenue account in order to help position the district to better tolerate future tax assessment changes and have funds available to help soften the resulting tax rate impact to it s residents. The committee recommends that the BOE set the tax levy at $32,275,086; which represents a tax rate increase of $12.08 or 10%. It is duly noted that when the committee voted on this plan, the use of reserves and the tax rate increase were not a unanimous decision. The committee voted on this plan and, while a majority consensus was not reached, 6 of the 12 members present voted in favor of the proposed 10% tax rate increase. The remaining members proposed plans that would set the tax rate increase from 9% down to below 5% and voted as such; 2 votes 4.7%, 2 votes 5%, 1 vote 7%, & 1 vote 9%. Final Report Board Finance Committee and Budget Advisory Committee 2010/2011 Page 4

5 Appendix In addition, the committee, recognizing the risks in lowering the spending plan but increasing reserves, asked that the following statements accompany their recommendations so they may guide the BOE in designing and dispensing the budget, and ensure that public confidence in these decisions remains at acceptable levels. o The committee wishes to remind the BOE that they hold in high regard the budget reduction prioritization order, as presented at the March 8 th BOE meeting, and asks that the BOE keep this order in mind when considering program changes. o The committee strongly recommends that the BOE seek at least $2.5M in labor concessions through timely negotiations with the district collective bargaining units and contracted superintendents. o The committee asked the BOE to consider the pay grade of the employee when taking concession and that a scaled approach be taken based on an employees ability to contribute. o The committee strongly recommends that the BOE increase tuition rates for all out of district students by at least 10%. o The committee strongly recommends that the BOE raise facilities use charges by at least 10% for all organizations that run sporting, child care, or other activities on school grounds. o The committee strongly recommends that when the BOE considers changes to the number of teaching periods in a school day, that time-on-task is maximized, especially in core subjects, without shortening the students school day. o The committee strongly recommends the BOE approve a program of process improvement and operational efficiency in order to achieve additional savings beyond what has already been proposed, but consider the value and impact on educational programs when doing this. o The committee strongly recommends that the BOE consider eliminating the Pre-K program in order to achieve further cost savings through FTE reductions. o The committee strongly recommends that the BOE consider eliminating the small class size mandate in grades K-1 in order to achieve further cost savings through FTE reductions. o The committee wises to reminded the BOE that they must be fair and equitable when considering budget reductions, program changes, and tax rate proposals and that we must share the pain across all stakeholder groups. The committee extends their best wishes to the BOE and hopes they are able to use these recommendations and guidance to develop a budget plan that reduces costs, increases efficiency, improves the educational program, and earns the satisfaction of the community. Final Report Board Finance Committee and Budget Advisory Committee 2010/2011 Page 5

6 Appendix Rider to Original Recommendation April 6 th A the April 6 BAC meeting, even though there was no significant change to their prior suggestions, they ratified the recommendation draft I had sent previously with one additional proviso. There were eight committee members in attendance and they voted on the spending plan reduction and tax rate change as such: - They reviewed the -5%, -4.27%, & -4.09% spending plan proposals and decided to remain committed to their original recommendation of -5% by a vote of The vote appeared unanimous at first, and that s how I vocalized it at the time, but one member approached me after the meeting to confirm they abstained so I made the correction. - The committee also reviewed the tax rate increase charts from Mr. Flower and voted in the following manner (nearly identical to the original recommendation): o 10% increase 4 votes (50%) o 9 % increase 1 vote (12.5%) o 5% increase 3 votes (37.5%) The additional proviso is that if the Board elects for a tax increase, no matter what the percentage, that the Board designate that these funds will only be used to offset a significant tax rate increase that is the direct result of a lowered assessment on the power plant facility. The committee realizes they cannot bind the Board to any such promise, but they feel the community will only agree to a tax increase under these terms and any other use of these funds would be a breach of that agreement. Attached is the original recommendation which the committee ratified with the above addition. Assuming all goes well and their services are no longer needed for school year budget development, the members in attendance volunteered to continue meeting to assist the Board with development of a long term plan as suggested by them in the attached document. I feel this is a good idea and recommend we take this up as a discussion item at our business meeting later this week. Final Report Board Finance Committee and Budget Advisory Committee 2010/2011 Page 6