1. WORCESTER PUBLIC SCHOOLS Preliminary Budget Estimates April 2009

2. Worcester Public Schools Overview of WPS Budget FY02-FY09 Budget History FY10 Foundation Budget, Local Contribution and Net School Spending Requirements FY10 Preliminary Budget Estimates Federal Stimulus Funding Presentation Overview:

3. WORCESTER PUBLIC SCHOOLS April 1: Community Input Session, 7pm, Worcester Technical High School April 6: Joint Meeting of Business and City Council Education Committee, 4:30pm, City Hall April 7: City-wide Parent Planning Advisory Committee, 7pm, Worcester Public Library UPCOMING BUDGET MEETINGS

4. WORCESTER PUBLIC SCHOOLS INFORMATION 2 nd Largest Employer in City 1.UMass Memorial Health Care 13,672 2.Worcester Public Schools 3,384 3.Saint Vincent’s Hospital1,954 4.City of Worcester1,806 5.Hanover Insurance Group1,804 Source: City of Worcester 2008 CAFR $310 Million Budget (all funds) 50 Schools & Operating Sites 23,950 Students Serve 4 million meals annually Provide 3.6 million annual rides on school buses

5. WORCESTER PUBLIC SCHOOLS FY09 General Fund Budget $256,626,552 Salaries (64%) Health Insurance (15%) Out-of-District Tuition (6%) Retirement Assessment (4%) Transportation (4%) Building Utilities (3%) Instructional Supplies (1%) Building Maintenance (1%) All Other Non-Salary Costs (2%) Employee Salaries Health Insurance Out-of-District Tuition Retirement Transportation Utilities

6. WORCESTER PUBLIC SCHOOLS FY09 Budget Funding Sources City Revenue based on % of totals

7. WORCESTER PUBLIC SCHOOLS FY09 Budget Spending All Funding Sources WPS 52% $310 m City 48% $284 m City Budget Source: FY09 City Manager Budget Message $594 m

8. WORCESTER PUBLIC SCHOOLS BUDGET TRANSPARENCY 16 th Public Input Session Since FY03 10 “Reports of the Superintendent” since FY03 Annual budgets and budget presentations are on www.wpsweb.com back to FY03 Presentations to CPPAC & Superintendent’s Student Advisory Council when invited

9. Worcester Public Schools FY10 Budget COMPONENTS OF FY10 BUDGET Line Item Budget Program Budget NEW: Building Based Costs NEW: Budget Narrative NEW: Organizational Chart Future enhancements to align with ASBO Meritorious Budget Award criteria

10. Worcester Public Schools FY02-FY09 Budget History

11. 7 Years of Budget Deficits and Reductions Totaling $59.7 million Worcester Public Schools FY02-09 Budget History

12. Annual Budget Deficits Worcester Public Schools Budget History

13. Revenue Losses:$ m State Aid (Career Pathways)$8.80 State Grant Funds$8.90 Federal Grant Funds$10.10 Enrollment Changes$10.70 Total Revenue Loss$38.50 Cost Increases Greater than Inflation Health Insurance$16.10 Retirement Assessments$2.00 Special Education Tuition$2.10 Building Utilities$1.00 Total Cost Increases > Inflation$21.20 Total Revenue Loss & Cost Increases:$59.70 Worcester Public Schools Reasons for FY02-FY09 Deficits

14. How FY09 Budget Deficit was Resolved Worcester Public Schools Budget History Health Care Reform $4,300,000 Reductions: Grant Funded Staff Development:$800,000 9 Teacher Positions:$517,000 School Nutrition Reform & Fees:$420,000 1 Administrative Position:$ 95,000 2 Custodian Positions:$ 62,000 Community Schools:$ 51,000 Athletics:$ 40,000 Crossing Guards:$ 15,000 Total Reductions $2,000,000

15. Change in Budget Spending FY02 to FY09 Worcester Public Schools FY02-09 Budget History

16. Change in Budget Spending FY02 to FY09 Worcester Public Schools FY02-09 Budget History Average Per Year Change

17. Worcester Public Schools FY94-FY09 Budget Instructional / Fixed Costs Spending

18. Change in Budgeted Positions Worcester Public Schools FY02-09 Budget History Does not include Head Start Employees or Long Term Substitutes

19. Worcester Public Schools FY02-09 Budget History History of Actual Unemployment Compensation Payments : $3,135,419 spent since FY03

20. Worcester Public Schools FY02-09 Budget History Administration Spending Facts: 12 th out of 13 comparable urban districts on per pupil basis (FY07 Data). 47% of the per pupil administrative spending is “paid” to the City (as a credit towards local contribution) for certain administrative functions. WPS Administration salaries are 0.75% of budget. Same number of administrative positions as FY91 (total staff +13%)

21. FY04 Adams Street East Side Preparatory School Granite Street School Greendale School Doherty Satellite Program FY07 Harlow Street Fundamental School New Ludlow School Mill Swan Communication Skills Center Multiple Intelligences School at Dartmouth Street Closed 8 Schools Closed 8 Schools : Worcester Public Schools FY02-09 Budget History

22. Reduced per pupil instructional supplies & materials by 70% in FY06 Worcester Public Schools FY02-09 Budget History -70% -52%

23. Reduced funding for instructional technology by 86% from $1.4 m in FY02 to $0.2 million in FY03-09 Eliminated extended day programs at 10 schools, reduced pre-school from full day to half day, significant reductions in staff development, building maintenance, athletics, and fine arts Worcester Public Schools FY02-08 Budget History

24. WPS Students Show Progress MCAS Scores Improve in ELA and Math: More WPS Students are Advanced/Proficient More Students taking more rigorous classes Competitive Colleges Continue to Accept WPS Graduates WPS students excel in national competitions Individual schools continue to receive national recognition However, with adequate funding, we could have even better results.

25. Worcester Public Schools EDUCATION REFORM FUNDING REQUIREMENTS FY10 FOUNDATION BUDGET NET SCHOOL SPENDING LOCAL CONTRIBUTION

26. Worcester Public Schools Foundation Budget: The target imposed by the Education Reform Act of 1993 for each school district, defining the spending level necessary to provide an adequate education for all students. Changes annually by enrollment, demographics, and inflation.

27. Worcester Public Schools How is the FY10 Foundation Budget Calculated? FY09 Foundation Per Pupil Budget Rates x Inflation Factor (4.5%) = FY10 Rates x October 1, 2008 student enrollment = FY10 Foundation Budget

28. Worcester Public Schools FY10 Budget FOUNDATION BUDGET FY10 Foundation Budget:$278,485,880 FY09 Foundation Budget:$262,175,702 Increase$16,310,178

29. Worcester Public Schools FY10 Budget FOUNDATION BUDGET INCREASE Inflation factor (4.5%):$12.0 Increase in LEP enrollment (880):$1.7 Increase in overall foundation enrollment (143):$1.2 Increase in low income students (2.3%):$1.1 Increase in Voc-Tech enrollment (66):$0.3 Total Foundation Budget Increase:$16.3 Less Chapter 70 Growth Aid (FY09-FY10)-$2.0 Total NET SCHOOL SPENDING CHANGE:$14.3 $ in millions

30. Required Local Contribution: The minimum that the city must appropriate from property taxes and other local revenues for the support of schools. The amount includes certain municipal costs counted as school related expenditures. Student transportation and certain other school costs do not count in the local contribution requirement. Municipal Revenue Growth Factor: The % change in a municipality's revenue growth for a fiscal year. Net School Spending Requirement: The sum of the local required contribution and Chapter 70 state aid.

31. Worcester Public Schools How is the FY10 Foundation Budget funded? City Contribution: FY09 amount x (+/-) Municipal Revenue Growth Factor State Aid: Once local contribution level is defined, the difference to get to Foundation Budget is funded by Chapter 70 State Aid.

32. Worcester Public Schools FOUNDATION BUDGET A=B-C A = State Aid B = Foundation Budget C = Local Required Contribution State Aid = Foundation Budget – Local Contribution

33. Worcester Public Schools Net School Spending (NSS) is the compliance measure of municipal spending under Education Reform. The total NSS has equaled or exceeded the Foundation Budget since FY2000 (except for the FY10 budget from the Governor for 153 communities including Worcester)

34. Worcester Public Schools City Costs included in Local Contribution: 45.6% of the following: Auditing:$1,058,162 Purchasing:$ 581,184 Technical Services:$3,992,597 Treasurer$3,220,435 Budget Office:$ 574,709 Total$9,427,087 at 45.6% = $4,301,187 100% of the following: Police Liaison Services:$ 555,211 Water & Sewer Charges:$ 474,300 Total$1,029,511 Total City Costs included in Local Contribution: $5,330,698 FY09 DESE Per Pupil Administrative Cost Allocation Method: $2,400,994

35. Worcester Public Schools FY10 Budget INITIAL REQUIRED SPENDING FY10 Chapter 70: (Level Funded) $180,493,947 FY10 Local Contribution:$83,628,319 FY10 Required Spending:$264,122,266

36. Worcester Public Schools FY10 Budget FY10 Required Spending:$264,122,266 FY10 Foundation Budget:$278,485,880 DIFFERENCE-$14,363,614 “153 districts have FY10 net school spending requirements that fall short of their foundation budgets, by a total of $168 million. The federal economic stimulus bill…may contain some supplemental funding to assist local schools during these difficult economic times.” DESE 1/28/09 INITIAL REQUIRED SPENDING COMPARED TO FOUNDATION

37. Worcester Public Schools FY10 BUDGET REVENUE ESTIMATES

38. Worcester Public Schools FY10 Budget REVENUE CHANGE: Before Recovery Funds:Change Chapter 70$0 City Contribution (a) :-$1,200,000 City Contribution (b):-$1,800,000 City Indirect Grant Charge:-$800,000 Total Revenue Change:-$3,800,000

39. Worcester Public Schools FY10 Budget MEDICAID REVENUE: $ in millions $64.4 million collected by WPS in Medicaid Revenue Since FY94. Per MGL Chapter 44 Section 53, all Medicaid Revenue deposited to City’s General Fund.

40. Worcester Public Schools FY10 Budget REVENUE CHANGE: City Contribution (b):-$1,800,000 Governor’s FY10 Budget includes $11,276,707 in Emergency Recovery Bill Revenues for Worcester (state-wide hotel and meals tax increase) Using Governor’s local aid estimate: $83,628,319 Without new local aid funds:$81,828,319 Difference: -$ 1,800,000 Note from DESE on Stimulus Funds: Preliminary, based upon Governor's House 1 Chapter 70 proposals. Final amounts will be published once the House and Senate have either passed a local aid resolution or completed the FY10 state budget.

41. Worcester Public Schools FY10 Budget REVENUE CHANGE: City Indirect Grant Charge:-$800,000 City collects an indirect assessment on all grants for services provided by the following City departments: Auditing, Purchasing, Technical Services, Treasurer, Human Resources, and City Manager’s Office. City Manager budget includes an increase the indirect charge on all grants from 1% to 3%.

42. Worcester Public Schools FY10 Budget REVENUE CHANGE: City Indirect Grant Charge:-$800,000 WPS Grant Revenue:$40,029,729 1% City Assessment:$400,297 3% City Assessment:$1,200,892

43. Worcester Public Schools FY10 Budget TOTAL CITY INDIRECT GRANT ASSESSMENT Existing Grants increase to 3%: $800,000 3% of SFSF (estimate) $420,000 3% of Grant Stimulus (est.) $180,000 TOTAL$1,400,000 New City Revenue from Grant Indirect Assessment

44. Worcester Public Schools FY10 BUDGET EXPENDITURE ESTIMATES

45. Worcester Public Schools FY10 Budget Expenditure Projections: Employee Salaries*:$4,820,000 Health Insurance:$4,000,000 Retirement Assessment:$1,800,000 Charter/Choice Tuition:$1,300,000 All Other Cost Centers$2,500,000 Total Proj. Expenditures:$14,420,000 * Includes $300,000 to cover salaries for level-funded grant accounts Detail Next Slide

46. Worcester Public Schools FY10 Budget Expenditure Projections: Special Educ Tuition:$1,000,000 Transportation:$500,000 Building Utilities:$400,000 New Positions (Sped/ESL):$500,000 All other Non-Salary Accounts: $100,000 Total Other Cost Centers:$2,500,000

47. Worcester Public Schools FY10 Budget Budget Status: General Fund Budget Summary: Change in Revenue:-$3,800,000 Change in Expenditures:$14,420,000 Difference (Deficit):-$18,220,000 = 300 Positions

48. Worcester Public Schools FY10 Budget State Fiscal Stimulus Funds : (SFSF) $14,000,000 City Contribution or Add’l SFSF $1,800,000 Change Retirement Assessment: $1,200,000 New Funds to Solve Deficit:$17,000,000 BEST CASE SCENARIO TO SOLVE DEFICIT

49. Worcester Public Schools FY10 Budget BEST CASE SCENARIO TO SOLVE DEFICIT $15,800,000 in temporary (two-year) funds to solve current budget deficit

50. Worcester Public Schools FY10 Budget Budget Status: As of April 1, 2009 Deficit : -$18,220,000 Solutions: $17,000,000 Budget Status: -$ 1,220,000

51. Worcester Public Schools FY10 Budget Projected 2009-2010 Elementary Class Size: As of April 1, 2009 557 Elementary Classrooms (same as FY09) Average Class Size 22.0 46 classes (8%) with 27-30 students Any teacher reduction creates 30+ class size

52. Worcester Public Schools FY10 Budget Projected 2009-2010 Secondary School Staffing: As of April 1, 2009 680 Additional Students expected to take a 4 th year mathematics class as part of student’s Educational Proficiency Plan No change in number of elective class options Staffing adjustments at individual schools based on enrollment changes and program needs.

53. American Recovery and Reinvestment Act State Fiscal Stabilization Funds (SFSF) State Fiscal Stabilization Funds (SFSF) Title 1 – Improving the Academic Achievement of the Disadvantaged Individuals with Disabilities Education Act (IDEA) Other funds through competitive grants

54. Worcester Public Schools FY10 Budget State Fiscal Stabilization Funds

55. Governor recommends funds based on Chapter 70 formula to reach FY10 foundation level; requires State Legislature approval Governor recommends funds based on Chapter 70 formula to reach FY10 foundation level; requires State Legislature approval DESE assures that no district will be below FY10 foundation level If approved: 250 JOBS SAVED DESE recommends use only on instructional or tuition costs.

56. State Fiscal Stabilization Funds 82% of SFSF are to be spent on education 18% may be spent on non-education purposes (MA has not detailed use of this portion of funds) SFSF must be spent proportionally on higher education and K-12. Funds must be used to fill gaps in state formula (Ch70). Any remaining funds must be distributed by Title 1 formula. Per pupil or minimum aid not realistic

57. Funding AreaWORCESTERBOSTON Foundation Budget:$278,485,880$708,816,825 Local Contribution:$83,628,319$510,847,386 Chapter 70 Should Be:$194,857,561$197,969,439 Chapter 70 Governor Budget:$180,493,947$221,422,839 Shortfall:$14,363,614$0 Stabilization Funds:$14,363,614$0 FY09 NET SCHOOL SPENDING:$266,328,781$783,279,336 Worcester is currently funded at 95% of Foundation Budget for FY10 State Fiscal Stabilization Funds Tale of Two Cities

58. State Fiscal Stabilization Funds Provided as federal grant Final numbers expected in late June or July Funds subject to municipal indirect costs ($420,000) MA DESE guidance is pending on 9% state retirement assessment on teacher salaries ($1,260,000)

59. State Fiscal Stabilization Funds FUNDS DELAY - NOT PREVENT- BUDGET CUTS “Funding Cliff” in 2 Years Investments must be sustainable Initial guidance: 50% to be spent on “investments” Initial guidance: funds not to be used for collective bargaining increases.

60. State Fiscal Stabilization Funds Administration’s recommendation to School Committee. Administration’s commitment to staff. Administration’s promise to taxpayers.

61. Worcester Public Schools FY10 Budget Recovery Funds Other Grant Funds TITLE I & IDEA

62. Worcester Public Schools FY10 Budget IDEA: $2.1 million (2 years) IDEA: $2.1 million (2 years) Title I amounts not released. (Previous estimates not final because of set asides, and private, parochial & charter allocations) (Previous estimates not final because of set asides, and private, parochial & charter allocations)

63. Worcester Public Schools FY10 Budget Targeted Funds for Title I and IDEA Programs Targeted Funds for Title I and IDEA Programs Title I Supplement Not Supplant Rules Apply IDEA Maintenance of Effort Requirement “FUNDING CLIFF”

64. Worcester Public Schools FY10 Budget USDOE Suggested Use Teacher Training and Professional Development Strengthen/Expand K-3 standards Reading/Math Coaches

65. Worcester Public Schools FY10 Budget WPS ACTION PLAN: Developing comprehensive plan to address achievement gaps among student groups. Funds to be used to build capacity and benefit district when stimulus funds end. Plans will be transparent and accountable to taxpayers.

66. Worcester Public Schools FY10 Budget FY10 Budget Status: Awaiting final revenue numbers from State. Developing plans for use of stimulus funds Budget to School Committee in June

67. Worcester Public Schools FY10 Budget General Fund Budget for WPS: Chapter 70 Aid 1 :$180,493,947 City Contribution 2 :$ 90,781,742 Charter Reimbursement 1 :$ 1,698,700 Less Charter/Choice Tuition 1 : -$ 20,507,059 WPS General Fund Budget:$252,467,330 Source: 1 FY2010 Local Aid Revenue & Assessments, Department of Revenue 2 City Manager’s FY10 Budget

68. Worcester Public Schools FY10 Budget General Fund Budget: FY10: $252,467,330* FY09:$256,626,552 Change: -$ 4,159,222 % Increase:-1.6% * Does not include SFSF $14.0 million

69. Worcester Public Schools WPS CONTRIBUTION TOWARDS FY10 CITY DEFICIT City Contribution (a):$1,200,000 City Contribution (b):$1,800,000 Grant Indirect (existing)$800,000 Grant Indirect (new funds)$600,000 TOTAL$4,400,000 = 88 City Positions (at $50,000)

70. Worcester Public Schools FY10 Budget Current and Long Term Issues **Stimulus “Funding Cliff”** Student Enrollments 1,200+ Kindergarten enrollments to date Health Insurance & Fixed Cost Reforms Chapter 70 Formula Charter School Formula

71. Worcester Public Schools FY10 Budget STRATEGIC PLAN Provide a safe and healthy school environmentProvide a safe and healthy school environment To achieve compliance with state and federal regulationsTo achieve compliance with state and federal regulations To support the classroom through adequate class size and instructional materialsTo support the classroom through adequate class size and instructional materials To increase the academic achievement of all studentsTo increase the academic achievement of all students

72. Worcester Public Schools FY10 Budget SPENDING PRIORITIES Maintain Low Elementary Class Size Increase Spending on Instructional Supplies & Textbooks Maintain High School Graduation Requirement Support Student and Staff Health & Safety Meet Compliance Requirements Expand Gifted and Talented Programs

73. Worcester Public Schools FY10 Budget State Budget Next Steps: House Ways and Means Budget Expected April 15 Senate Budget to Follow Conference Committee to reconcile differences Governor to sign budget and/or make line-item vetoes

74. Worcester Public Schools FY10 Budget WPS Budget Next Steps: Joint Business Committee and City Council Education Sub-Committee, April 6 th, 4:30pm, City Council Chambers CPPAC, April 7 th, 7pm, Worcester Public Library City Council budget hearing (May 5th) Regular updates on budget to School Committee School Committee televised, public budget hearings in June