Date:            2/09/06

TO:                 town manager stephen alfred

From:           Robert Hicks

RE:                 2006-2007 school committee adopted budget

With this memorandum is the adopted budget for the South Kingstown School Department for the fiscal year beginning July 1, 2006 and ending June 30, 2007.  The School Committee adopted the budget at a special meeting on February 7, 2006.  The budget was reviewed by the School Committee at two workshops (January 17 and 31), at its regular meeting of January 24, and discussed with the Town Council during a joint meeting on January 25.

At this time the district is in the midst of significant change driven by several factors, including: an enrollment decline, new state and federal mandates with respect to student performance standards and high school proficiency based graduation, a local imperative to bring a consistent curriculum and instructional plan to each of our schools providing greater equity to educational opportunity, a statewide initiative to focus spending on urban districts with greater student need resulting in a decreasing share of revenue from state aid, the establishment of charter schools in the community whose students are removed from our enrollment but whose costs mostly remain in our budget thereby increasing per pupil cost, and increased spending pressure related to pensions, health care and utilities.

The combined result of these environmental changes is a school budget that is squeezed between increased requirements and fixed costs and restricted revenue, forcing difficult prioritizations of need.  This budget attempts to balance those priorities, recognizing that costs increase by more than some want and program priorities of others remain unmet.  In recent years, to deal with declining state aid and enrollment, a significant budget cut, and increased benefit costs, the district has not improved its program base.  Any necessary positions, such as high school literacy, were taken from existing staff reallocations.  In this budget several critical program and support elements are included as a result of School Committee goal setting and district response to the requirements of Board of regents High School regulations and No Child Left Behind.  In including these elements, the School Committee balanced both new funds and the reprioritization of existing resources, using both strategies to fund certain program initiatives.

The following attachments update the earlier preliminary budget material:

·         Revenue and Expenditure Statement (tab 1)

·         Line Item Budget (tab 1)

·         Breakout of Budget Increases (tab 1)

·         Historical Staff FTE Summary (tab 2)

·         Educational Programs (tab 4)

·         Transportation Budget (tab 5)

·         “P-Account” Breakout (tab 6)

·         Capital Purchase program – 5200 (tab 7)

·         Program Additions (tab 8)

 

Budget Summary

The priorities addressed in this budget focus on students as they enter and leave the school system.  Students entering the system will receive, under this budget recommendation, a full day kindergarten program enabling the teachers to fully address the components of our literacy program and state grade level expectations.  Students leaving the system, in high school, will see improvements that are part of the proficiency graduation system in addition to a disciplinary alternative that reduces time out of school for suspensions and provides an educationally productive alternative.

School systems are about teaching and learning, which involves teachers in classrooms with students – that is personnel.  Accordingly, the bulk of the school department budget is devoted to supporting teachers, in direct and indirect ways.  Two-thirds of all salary costs are for classroom teachers, and the balance supports classrooms with principals, therapists, paraprofessionals, custodians, etc.  Fifty-seven percent of the district’s budget is devoted to salaries and another 23% to benefits, combining to 80% of the budget for personnel.  Another 16% of the budget provides for contracted services, including transportation and tuition (special education, vocational, and charter).  The remaining 4% of the budget provides supplies for classrooms and the entire system; other objects such as contingency, liability, fees, and dues; and capital items, mostly technology and maintenance.

 

Enrollment

Our enrollment continues to decline.  As can be seen in the historical data, we reached a peak enrollment in 1999-2000 and have dropped as an almost mirror image of the prior increase.

Three data pieces are correlated to the enrollment decline and can reasonably be seen as explanatory.  First, births declined.  In the early 1990’s there were approximately 270 births per year, with more recent cohorts averaging about 250.  Second, enrollment in non-public and charter schools increased, more then doubling over the last decade and lessening the potential enrollment by over 400 students.  Third, growth management has worked.  Single family building permits declined by nearly 60% between 1999 and 2005.  The most recent birth records (2003) show a 10% increase over recent years.  The 272 births recorded in 2003 are the most since 1996, and are the first indicator of a swing in enrollments and the beginning of a period of increase.

Recent and projected enrollments are shown in the table and graph below.  In addition to total enrollment, it is also displayed in grade cohorts, elementary (K-5), middle (6-8) and high school (9-12).  As can be seen, the elementary grades have already faced their decline, and smaller grades are now moving into the middle schools.  The high school will not face the significantly smaller grades for several years.

The school district responded to the enrollment decline with two specific actions.  First, in 2004-05 an elementary school was closed to address the drop of 350 students in elementary population.  This action saved the district approximately $450,000 in the 05-06 year.  These savings will increase by $100,000 in the 06-07 year since one-time costs related to unemployment and moving do not recur.  Additionally, this change resulted in more equitable and overall lower class sizes.  This was applicable in grades 1-5, as there remains an issue in kindergarten class sizes that is proposed for addressing in the 2006-07 year.

Second, this fall the district engaged in a planning and analysis process to determine how it will address the decline in middle grade population.  In that process the commitment to middle school education, primarily evident in the team structure, for its grades 6-8 students was affirmed.  The district will maintain two balanced middle schools.  In the 2008-09 school year, each middle school will contract by one team and have three teams serving grades 7 and 8.  Grade 6 will remain with two teams in each school, contracting from 4 member teams to 3-member teams.

 

 

Expenditure History

In recent years it was noted that the school district had overspent its budget as appropriated at the Financial Town Meeting.  Additionally, increases in funds made available to the school department after FTM were expended to expand programs or address increasing mandated expenditures.  The School Committee has made consistent progress in keeping expenditures in line with appropriations and consistently returned positive balances.  In 2005-06 the district projects keeping expenditures within the FTM appropriation, returning a surplus, and maintaining the handshake commitment as it also did in 2004-05.

Budget to Actual Expenditures and End-of-Year Balances

 

Actual

Actual

Actual

Actual

Actual

Projected

 

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

Budgeted

 $ 36,187,338

 $ 41,582,164

 $44,100,563

 $47,404,597

 $48,813,877

 $51,925,052

Expended

 $ 36,864,477

 $ 41,256,687

 $44,650,202

 $47,671,022

 $48,417,267

 $51,309,704

$ over expend

 $      677,139

 $    (325,477)

 $     549,639

 $     266,425

 $  (396,610)

 $  (667,689)

% over expend

1.9%

-0.8%

1.2%

0.6%

-0.8%

-1.2%

Net Total

 $     (82,569)

 $      413,210

 $     209,282

 $        1,355

 $      444,181

 $    685,348     

 

Staffing

The School Committee reduced FTE’s in each of the last three years.  While enrollments have dropped, the school district also faces significant new mandates from both state and federal actions and also to respond to unmet needs for curriculum and professional development.  The School Committee worked to become more efficient and reassign staff to meet these new requirements.  In addition to meeting these needs, the School Committee also reduced class sizes, made them more equitable, and developed a plan to address declining middle school enrollment while maintaining our educational philosophy and quality.  This year the district has created additional positions in response to specific student needs, but supported them within the FTM budget.

There are current pressures in the staffing plan for the district, most noticeable at the middle school and at the high school in special education.  However, the plan for special education is to address the pressures through reallocation of special education staffing and to work within the current FTE to address those issues.

Historic and Current Staff FTE’s

Description

2001-02

2002-03

2003-04

2004-05

2005-06

Actual

2006-07

Administrative

23.5

23.0

23.0

22.0

21.0

21.0

21.5

Teaching

379.6

385.3

382.8

379.2

370.9

373.2

379.7

Non-certified

201.1

212.3

213.1

203.5

194.9

198.8

206.8

Total FTE's

604.2

620.5

618.9

604.7

586.8

592.6

606.6

 

Additionally, there is an opportunity to collapse one section in sixth grade where our population is projected to drop from the current 334 to 304.  There are now 13 sections of sixth grade averaging 26 students per class with a cap of 27.  If we collapse to 12 sections the average would be 25+ per class, remaining at 13 sections would result in average class sizes of 23+.  At this time, the budget retains the additional section; at least until the middle school districts are complete, so that the additional capacity remains to place students.  The collapse should definitely occur in 2007-8 regardless, when the grade 6 enrollments will drop to 258, providing average sizes of 21.5 for the 12 sections.  This remains, however, a place to capture an FTE if necessary.  Approved program additions represent additional FTE’s in 2006-07 and are detailed in the table below.

Program

Certified FTE

Non-Certified FTE

Full Day Kindergarten

5.6

6.0

Portfolio Manager

0.4

 

Network Technician

 

1.0

Athletic Trainer

 

1.0

 

Statewide Expenditure Comparison

With the availability of In$ite data showing relative expenditures of all the state’s school districts, it is possible to compare spending patterns in South Kingstown with respect to those of the state as a whole and individual districts.  At this time, the Accountability Subcommittee of the School Committee is identifying like districts within the state for comparison.  The following data is based on a comparison to statewide spending.  In the attachments to the budget is a table detailing expenditures by function, education level, and program.  It should be noted that differing from statewide averages is not fundamentally good or bad.  There are important reasons why a district would spend more or less; for example a greater population of non-English speaking students would require additional services, geography impacts transportation costs, and facility utilization, age, and condition help determine upkeep needs.  The comparative data should be used to create questions, not to determine judgments.  Comparisons provided are based on 2004-05 data.  Prior year data is available at the RIDE website which can be reached through skschools.net.

In the instructional area we spend more on personnel (teachers and paraprofessionals) than the typical district, a greater percentage of our spending is going to classrooms than average.  By cross-referencing functional expenditure with program expenditure it can be seen that the additional staffing is primarily, but not exclusively, in special education.  (These figures exclude out of district spending, which has been brought to a typical level.)  In addition to teachers and paraprofessionals, special education spending for therapists and psychologists also exceeds that of other districts, both in terms of percentage and actual dollars.  On analysis, that spending is heaviest in the elementary schools and it is evident that, to some degree, therapeutic staff is compensating for the lack of elementary guidance counselors.

Areas where our expenditures are less than statewide averages are technology, materials, and staff and professional development.  In staff development, our new teaching contract moves much of that into basic teacher responsibility through Job-Embedded Staff Development, and consequently does not show up as a separate expense.  If separated out as a professional development expense it would amount to approximately $35 per student, reducing but not eliminating the disparity.  Additionally our food service, transportation, program management, and building upkeep costs are less than are typical, the latter most likely due to our energy management program.

Comparative spending data also looks at educational level, how much is spent of elementary, middle, and secondary schools.  Here, our spending patterns show greater expenditure in elementary and middle schools compared to other districts and lesser spending at the high school.  This is not unexpected.  It is recognized that our neighborhood elementary schools are less efficient than larger schools and schools organized by grade level.  However, this inefficiency was partially addressed in the closing of an elementary school, so the 2006 data should reflect this change.  Our middle schools will continue to rise in per pupil cost until 2008 when we contract a team in each school at which time efficiency will be improved.  One large high school is efficient, and ours is no exception.  In six to ten years, when smaller enrollments enter the high school, we should expect to see some efficiency drop and our per pupil cost approach the state average.

Analysis of Increases

The increase to the school department budget is driven by several factors: contractual, operational, and programmatic.  Programmatic additions to the budget are detailed in the following section.  Below is a breakout of the area by area increases in the base budget.  These are further detailed in an attached spreadsheet in the backup documents.  In each budget line the dollar increase, percent increase of the line, and percent increase on the total budget are listed.

Salaries – Salary increases are driven by general wage and step increases.  Step increases reflect the wage increases awarded based on time in service, and are a vehicle to move personnel from their entry wage to maximum.  While some have criticized step increases as providing double increases, general wage plus step, it should be noted that without steps, the alternative is to pay the maximum wage upon entry, a far more expensive alternative.  Step increases typically equate to 2% of the wage base.  Total wage increases in the 06-07 budget are 6.2%, of which 2% is attributed to steps, 3.5% to general wage increases, and the remaining 0.6% to unforeseen positions added in the 05-06 year.  Salaries increase the budget 3.6%.

Benefits – Increases in benefit costs are a matter of local, state, and national concern.  Until recently benefit cost issues were focused on health care.  More recently, pension costs are rising to the forefront.  In 2005-06, significant pension increases were anticipated and budgeted, but later avoided through legislative action.  The district chose not to spend those funds, but to reserve them.  That decision is helping now, as the pension increase expected but not incurred in 05-06 is facing us in 06-07.  In other words, last year’s legislative action did not eliminate the increase, but delayed it for a year.  As a result, our pension contribution increase as compared to the budget is 6.4%, but compared to our 05-06 expenditure level is 27.3%.  Had we spent the 05-06 pension savings, we’d be facing the larger increase against our budget.  For health insurance we are projecting a 12% rate increase with a net increase of 10.8% on Health Insurance costs.

Purchased Services/Supplies – Several items have a significant impact on our purchased services and supply lines in 06-07.

·         Local charter schools reach maximum enrollment in 06-07, so this should be the last year of significant tuition cost increases.  An analysis done last year showed that charter school students could be educated for several thousand dollars less than was paid out in tuition.  Last year’s legislative action reduced by half, but did not eliminate the added costs to the district.

·         There is $40,000 added to the 5200 capital account to transfer our student management system to SchoolMax, the system currently used in about half the state’s districts.  RIDE is subsidizing half the cost of the transfer and is supporting data transfer and downloads to that program.  The transfer is not required, but there is no assurance the funds will be available ongoing (there is no guarantee they will be available now, but our plan is so contingent) and we risk more difficult data sharing if not using the supported program.

·         A change in state aid moved $67,000 from general aid to designated professional development aid (Article 31).  While this did not change overall state aid, it removed $67,000 from aid available against the budget, in effect, a $67,000 decrease in general aid and a mandated, commensurate increase in Article 31 expenditures.

·         For electricity and heating fuel, we are projecting a 20% increase.

Educational Programs – Most of the increase in educational programs derives from a decline in federal grants that supported both our prevention counselors and GEMS-Net science program.  Federal funding for these grants has diminished and is expected to be eliminated next year for South Kingstown.  The GEMS-Net program will be absorbed through the Article 31 increase, avoiding an additional budgetary cost.  These are important programs, integral to the school system that we’ve been supporting through grant funds.  Additionally, a $9,000 increase is provided for support of CARES, the district’s volunteer organization.  This restores the cut made in 2004-05 and takes a first step towards addressing the expanded role of CARES and volunteers in the school system.

Capital Outlay – The School Committee’s adopted budget revises the 5200 capital purchase program as submitted to the Town Manager and reviewed with the Town Council.   Two initiatives, the School Max student data program and Accounting System are moved into the 5200 program.  Correspondingly, reductions in vehicle purchase, painting, and technology replacement offset the majority of those costs.  The balance of the two items was offset by a reduction in the maintenance request.  The new 5200 program is detailed in an attached spreadsheet.

Program Additions

This budget includes additions that improve the educational opportunity available to the community.  They include both program additions that will be immediately visible to the community and structural improvements that will build the capacity of the district. Taken in their entirety, these program additions add $720,444 or 1.4% to the budget.  Each of them is described below.  It is understood that the cost of these additions is substantial.

Full Day Kindergarten – (carried in contingency) the implementation of full day kindergarten is more fully described in a memorandum in the attachments to the budget.  In summary, it extends the district’s kindergarten program from 2.5 hours per day to 6.3 hours a day.  Full day kindergarten increases the curriculum delivered to students, is now available to most students nationwide, and has been demonstrated to improve student outcomes.  The cost is projected at $441,000.  Full day kindergarten rose to the top of the priority list in the School Committee’s goal setting process.  If a full day program is not implemented now, then in 2008, when the middle schools contract, we will next have an opportunity to move forward.

Senior Network Technician – (carried in contingency) this request has come forward several times before and relates to both communication and accountability priorities of the School Committee.  As we move to a more data intensive environment for student management, data transfer and reporting, personnel, and student achievement analysis, the data management is growing beyond our means.  The senior network technician will have primary responsibility for database and web services.  The cost is projected at $55,306.  Our technological support has long been a weakness of the district.  We have survived with current staffing, but make compromises now and will have to continue to do so.

Accounting System – (carried in the 5200 program) the cost is projected at $70,000.  We currently use the town’s accounting system but would like to move to single entry, on-line purchasing, and integration with human resources.  This is a one-time, non-recurring cost and relates to the School Committee’s accountability priority.  An integrated accounting/human resource package has been a priority of the office personnel for several years.  The alternative is to continue with the status quo.

Portfolio Manager – (carried in contingency) the required performance graduation system includes an element of student proficiency portfolios as part of the graduation requirement and is related to School Committee priority of high school student success.  The electronic portfolio system requires a dedicated part time person to manage it.  The cost is projected at $27,600.  Student portfolios are part of the mandated state proficiency graduation.  This applies to the Class of 2008, now sophomores, and there is immediate need for students to assemble portfolios.

Athletic Trainer – (carried in contingency) the RIIL is recommending that high schools include athletic trainers in their program support structure.  The cost is projected at $47,496.  While this is not a mandate, it is a safety improvement.  Absent, we will continue with the status quo.

Child Outreach Coordinator (0.5 FTE) – (item to be created through staff reallocation) this position will oversee the Hazard program and our community preschool placements.  This is budgeted at $45,000.  The School Committee approved this position two years ago, but the resources were reallocated elsewhere.  Accordingly, a reallocation within special education will provide for the position, not through an additional FTE.  We face a surge in preschool placements and the program lacks direct administrative oversight.  Absent, we will continue with the status quo