South Kingstown Public Schools Memo

Date:            2/10/2005

TO:                 town manager stephen alfred

From:           Robert Hicks

CC:                  school committee

RE:                 2005-06 school committee budget

 

With this memorandum is the School Committee adopted budget for the 2005-06 school year.  The budget is one that has both a significant increase as well as significant cost reductions.  This is primarily due to the structural increases in the budget, including retirement costs, charter school tuition, and contractual increases.  A summary of the budget follows.

·         The recommended budget totals $52,544,482, an increase of $3,730,604, or 7.6% over the current year’s budget.

·         The proposed budget includes the closure of South Road Elementary School and the savings associated with the closure are part of the budget.  Closing the school saves the district $229,413, and the placement efficiency gains that come with the closing and consequently avoid spot redistricting save an additional $227,921 for a total of $457,334.

·         The budget is built on the Governor’s proposal providing a 1.9% increase in state aid.

·         Funding the recommended budget will require a Property Tax Assessment (PTA) in excess of the 5.5% cap.  As presented, the required PTA is $41,437,681, an increase of $3,804,543, or 10.1%.

·         Retirement contributions increase slightly over $1 million.  This is overwhelmingly driven by increases in local contribution rates (teachers from 8.72% to 11.84% and non-certified from 0.32% to 3.06%).  The amount attributable to the rate increases is $904,000.

·         Charter school tuition increases by $700,000 over budget and $275,000 over expenditure.

·         The cost of the 3.75% teacher salary increase and professional development stipends is $814,234, and with retirement and FICA added totals $977,610.

·         Changes in health care including the co pay and plan changes generate savings of $261,035, mitigating a budgeted 15% rate increase.

·         The proposed budget reduces staff by 17.9 personnel, mostly by increases in elementary placement efficiency and the closing of South Road School.

 

South Kingstown Public Schools

School Committee’s 2005-2006 Budget

 

Budget Context

This year the school district faced difficult budget decisions.  The School Committee devoted much of its meeting time this fall to the budget, discussed it in a joint meeting with the Town Council, and held its first budget workshop in December to create public information and dialogue.  In short, the school district is facing a sizeable budget shortfall in 2005-06 due to several factors:

·        An additional million dollar contribution to the state’s retirement fund;

·        An increase in budgeted charter school tuition of $725,000;

·        Lingering effects from last year’s $1.2 million budget cut, including the use of undesignated funds to offset the reduction; and,

·        The decreasing share of the budget supported by state aid.

 

While facing these budget issues, the district is also seeing its enrollment decline.  The drop in the number of students forced the district to become more efficient in how it organized itself, and these organizational issues arose in the budget discussion.  The challenge before the district is to maintain South Kingstown’s high quality of education and student performance while becoming more efficient.

There are several critical issues and questions that arise in this budget environment.  Those issues relate not only to how we maintain the quality of education in South Kingstown, but also how we demonstrate that the school district is wisely using its allocated resources.  Consequently, this budget addressed specific issues related to its use of funds, including staffing, both historical and budgeted; special education expenditures; and efficiency with respect to enrollments.

Due to fiscal limitations, all new mandates and required initiatives, such as the literacy teacher at the high school and the elementary mathematics support teacher will be met through personnel reassignment.  There are no increased FTE’s in the budget or budget enhancement requests.

 

Revenues

The school district’s revenue history shows an increasing reliance on local property tax revenue.  This is consistent with all suburban districts as the state has prioritized aid to urban areas.  The share of the budget covered by state aid has decreased from 24.5% in 1999-00 to 18.9% in 2005-06 and absorbed by local property taxes.

 

 

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

PTA

72.6%

72.2%

75.2%

75.4%

76.8%

76.8%

78.8%

State Aid

24.5%

24.2%

22.2%

21.4%

20.5%

19.9%

18.9%

Other

2.9%

3.6%

2.6%

3.2%

2.7%

3.3%

2.3%

 

Given state budget limitations, a substantive increase in state aid is not expected.  The budget is built on the Governor’s proposal that would provide for a 1.9% increase. State aid did not increase in the 2004-05 year and increased little since 2002-03.  Funding the recommended budget will require a Property Tax Assessment (PTA) in excess of the 5.5% cap.  As presented, the required PTA is $41,437,681, an increase of $3,804,543, or 10.1%.

 

Expenditures

The recommended budget totals $52,544,482, an increase of $3,730,604, or 7.6% over the current year’s budget.  There are elements of the budget that drive the increase.  These include expenses both within and without of the district’s locus of control.  Prominent are retirement contributions, charter school tuition, salary expenses, health care, and operational costs including fuel and insurance.  A listing of those elements and their budget impact follows:

 

AREA

INCREASE

% OF ITEM

% of BUDGET

Health care

$280,510

5.30%

0.57%

Retirement

$1,001,784

48.10%

2.10%

Transportation

$237,923

9.40%

0.49%

Charter school tuition

$701,673

118.50%

1.40%

Teacher step increases

$433,635

2.00%

0.89%

Teacher wage increases

$665,412

3.10%

1.36%

Pupil use materials

$78,120

9.40%

0.16%

Utilities

$111,373

17.60%

0.23%

Capital 5200

$115,000

88.50%

0.24%

TOTAL

$3,625,430

 

7.4%

 

Contracted salaries are a major driver of budget increases.  The district completed negotiations with its teachers’ union in December and will negotiate contracts with other unions now for next year’s salary and benefits.  In negotiations with its teachers the School Committee maintained a cost structure for salary and benefits commensurate with teachers throughout Rhode Island.  This was detailed in the press release on the contract settlement.  The relationship of our teacher salaries to already negotiated statewide averages is illustrated below.

 

 

2004-05

 

2005-06

 

% of SK

SK

RI Average

RI Median

 

SK

RI Average

RI Median

BA Start

 

$32,684

$33,813

$33,560

 

$33,910

$34,550

$34,527

BA Maximum

 

$59,937

$61,829

$62,025

 

$62,185

$63,858

$63,747

BA, BA+30

44%

 

 

 

 

 

 

 

MA Start

 

$34,971

$36,446

$36,185

 

$36,282

$37,222

$37,221

MA Maximum

 

$64,134

$64,462

$64,650

 

$66,539

$66,530

$66,441

MA

36%

 

 

 

 

 

 

 

MA+30 Start

 

$36,605

$37,126

$36,860

 

$37,978

$37,709

$37,679

MA +30 Maximum

 

$67,993

$65,142

$65,325

 

$70,543

$67,017

$66,899

MA+30

20%

 

 

 

 

 

 

 

 

To show how the contract impacts individual teachers, the table below walks through three teacher scenarios:  a step 2 teacher advancing to step 6, a teacher advancing to the top of the scale during the contract, and a teacher who is at the top step throughout.

 

Masters

Masters

Masters

 

Step 2-6

Step 6-10

Step 10

2003-04

 $     37,274

 $     48,757

 $     63,186

 

 

 

 

2004-05 (plus step)

 $     40,725

 $     52,385

 $     64,134

RI Average (04-05)

 $     42,298

 $     53,029

 $     64,462

$ increase

 $      3,451

 $      3,628

 $         948

% increase

9.3%

7.4%

1.5%

 

 

 

 

2005-06 (plus step)

 $     45,192

 $     57,509

 $     66,539

RI Average (05-06)

 $     44,947

 $     55,948

 $     66,530

Meeting Stipend

 $         248

 $         316

 $         366

PD Stipend

 $         367

 $         367

 $         367

Total

 $     45,808

 $     58,192

 $     67,272

$ increase

 $      5,083

 $      5,807

 $      3,138

% increase

12.5%

11.1%

4.9%

Co pay (C2C Family)

 $         453

 $         566

 $         679

Net $ after co pay

 $      4,630