1. FY13-17 Five-Year Financial Forecast Needham Public Schools November 15, 2011

2. Why Forecast? Project “big picture challenges” and better inform decision-making. Project school expenses based on current data and identified needs, rather than historical trends. A planning document and tool for conducting scenario analysis - not a substitute for the budget process.

3. What Will You See? Budget gap driven by increasing enrollments at secondary (middle & high school) levels, meeting contractual obligations & infrastructure needs. Strategies for addressing deficit focus both on long-term sustainability initiatives – in areas of our budget that we can control - and difficult short-term decisions.

4. FY13-17 “Needs” Projection ($2.7M) in FY13 @ ($200K - $500K/Yr)

5. FY13-17 “Needs” Projection $2.7 M Gap in FY13 caused by 6.7% projected expenditure increase, compared to more conservative 1.2% projected revenue growth.

6. FY13-17 “Needs” Projection Source of Revenue Projection is Town-wide Pro Forma. 60% of projected Town-wide budget deficit applied to school expenditure estimate, to derive potential estimate of ‘available funds.’

7. Assumption … Rising secondary enrollment; declining elementary enrollment.

8. … Significant Budgetary Impact The intensive staffing requirements at the middle and high schools more than offset minimal budget reductions resulting from reduced enrollment at elementary level. Year ElementaryMiddleHigh FY13(0.8 FTE)11.5 FTE9.4 FTE FY13-17 (3.9 FTE)7.3 FTE 18.3 FTE

9. Assumption … Provide required student support in the areas of special education, psychology, occupational/physical therapy, guidance and nursing. Meet additional staffing requirements in area of English Language Learner (ELL) education. Restore 9.7 FTE Ed Jobs positions to budget.

10. …Significant Budgetary Impact

11. Projected Total Staffing Need

12. Non-Salary Expenditures Other costs: –11.2% reduction in SPED tuitions for FY13; 3.3% Inflation Factor, 65% Circuit Breaker Reimbursement Rate –Transportation Costs Grow by 4.4%/Year on Average (contract renegotiation, sped student needs) –‘Per Pupil’ expenses grow based on student multiplier amounts, updated to reflect cuts in recent years and comparative community analysis.

13. Implications for FY13 and Beyond Given limited available revenue, school operating ‘needs’ could exceed revenue by $2.7 million in FY13; $200-$500K/year thereafter ‘Needs’ unaffordable, given current economic climate and most recent projections for revenue. No easy solutions to external pressures placed by increasing enrollments, special education mandates, collective bargaining requirements and high expectations for performance.

14. Implications for FY13 and Beyond Funding gap grows to $3.2M - $3.7M in FY13, when school equipment replacement needs factored in (technology, vehicles, equipment)

15. … Sustainable Operations In Areas Under our Control Negotiating fair, yet affordable contracts for teachers and other staff members. Creating sustainable programs ‘in- house’ for expensive education services; Review of Operations. Provide pupil transportation services in the most cost effective manner possible. Strategy

16. Difficult Budget Decisions… Provide for only more critical enrollment positions projected in this document, at expense of higher class size. Investigate feasibility of 1:1 computing models or lease financing for school technology. Repurpose existing dollars, as available or feasible, to meet support service needs. Strategy

17. Difficult Budget Decisions… Further ‘pare back’ supplies, conserve energy and consumable resources, fees. Use one-time revenues to ‘bolster’ budget in short-term. Strategy

18. Grow the Revenue Base… Meet 17.5% state ‘minimum share’ of Chapter 70 foundation budget requirement: $1.1 million in additional ongoing revenue. Fully-fund Circuit Breaker 75% Reimbursement Requirement for special education expenditures above the four-times- foundation-per pupil expenditure threshold: $0.2 million in additional revenue. Additional local revenue support. Strategy

19. Question & Answer