Superintendent’s Budget Presentation for Providence School Board April 12, 2010

Key Information Facility Changes –Addition of a 7 th Grade at Nathan Bishop Middle School –Additional 130 freshman entering PCTA –Beginning of a new plumbing curriculum at PCTA –The closure of Perry Middle School and Feinstein High School are not assumed in this budget 2

3 Budget Drivers Student Achievement –Class size, curriculum development, professional development, classroom materials, extracurricular activities, smaller learning communities, common planning time, standards, and assessments Available Funding from State and City Changes to School Enrollment Labor Contract Obligations –Salaries, Benefits, Class Size Employee Retirement Contributions –State –Local Contract Obligations –Transportation –Custodial and maintenance –Outside tuitions

4 Budget Unknowns Final State Aid Allocation to the District Final City Appropriation to the District Approval of a State-wide Funding Formula Final Federal Entitlements

Budget Assumptions State Aid will be level funded at the original amount for FY2010 –Governor’s FY2011 Proposed Budget calls for a $7.1 million reduction in Aid to Education for Providence The City appropriation to schools will remain at the FY2010 amount –City funded 38.41% of FY2010 budget. Level funding of the FY2011 proposed budget is 36.6% Federal Entitlements will be level funded The approval of State-wide Funding Formula was not assumed 5

6 FY2011 Budget Overview The Superintendent’s proposed budget is $329,436,497 The FY2011 Budget is $15,890,845 or 5.07% higher than FY % ($14,863,973) of the expenditure increase is due to salary and benefits Budget increases are driven by: »Labor agreements »Vendor agreements »State regulations and laws »Enrollment

Proposed FY2011 budget includes a $16.8 million budget gap Level funding of City and State aid assumed No across-the-board salary increases scheduled for FY2011 Negotiated wage freeze for Local 1033 employees 7 FY2011 Budget Overview

8 Expenditures Proposed Expenditures$329,436,497

Expenditure Variances in FY2011 Budget (Summary) 9 FY2010 Approved Budget $313,545,652 FY10-FY11 DescriptionVariance Salary & Benefits$14,863,973 Services$967,333 Materials & Supplies($461,167) Equipment$85,746 Utilities$434,960 FY2011 Proposed Budget$329,436,497

Expenditure Variances in FY2011 Budget (Detail) 10 FY10-FY11 DescriptionVarianceTotal FY2010 Approved Budget $313,545,652 Salary & Benefits: Salaries $9,728,541 Substitute Teacher Salaries $2,243,192 State Retirement $1,804,245 FICA $913,664 Medical Insurance $595,963 Dental Insurance $330,583 Workers Compensation $200,000 City Retirement ($695,102) Unemployment ($250,000) All Other Line Items ($7,113) $14,863,973 Services: Transportation $1,407,976 Custodial Services $745,221 Rental of Buildings$169,591 All Other Line Items $130,155 Snow Removal $125,000 Tuition ($1,336,154) Other Fees ($274,456) $967,333

Expenditure Variances in FY2011 Budget (Detail) 11 FY10-FY11 DescriptionVarianceTotal FY2010 Approved Budget $313,545,652 Materials & Supplies: Textbooks ($442,559)* All Other Line Items ($18,608) ($461,167) Capital: Computer Hardware $105,726 Educational Equipment $52,408 Furniture & Fixtures ($72,388) $85,746 Utilities: Natural Gas $500,000 Electricity$460,000 Water/Sewer $74,960 Heating Oil($600,000) $434,960 * FY2010 budget incl. $316k deferred payment FY2011 Proposed Budget $329,436,497

12 Revenues Projected Revenues $312,575,472

13 Revenues FY2010 Approved Budget $313,545,865 FY10-FY11 DescriptionVariance City Appropriation$164,820 E-rate Reimbursement$65,000 Master Lease Reimbursement($1,000,000) Transfer from Indirect Cost($200,000) FY2011 Proposed Budget$312,575,685

Funding Formula 14 Three Key Funding Components –Core Instructional Amount - $8,295 per student –Student Success Factor – 40% of Core Instructional Amount $3,318 (available for students who receive free or reduced lunch) –State Share Ratio – Equalized Weighted Assessed Valuation (EWAV) is the calculation used to determine the funding that a city or town receives How the Plan endorsed by RIDE might impact Providence –Projected total increase in base funding over four years = $28,667,235 –An additional $5,548,728 in state aid in FY2011 –Additional funding possible for Career & Tech programs and Extraordinary costs for students with disabilities would result in an additional $2.5 million Unknown issues concerning the funding formula –What is the base amount of funding available – FY2010 Original State Aid or FY2011 Proposed Aid? –Will the Maintenance of Effort Law for the City be changed?

15 Continued Efforts to Reduce Expenditures Re-negotiate transportation contract extension Utility savings through arrangement with National Grid and City Reduction in warehouse rental costs Refinancing of current debt issue with Johnson Controls Continued review of every line item in budget based upon more information received from FY2010 experience

If state and local aid is not provided in an amount to fill the $16.8 million budget gap, some of the following actions will be necessary: –Layoffs –Salary reductions –Furlough days –Co-share increases –Transportation changes –Deferral of vital capital purchases –Suspension of state mandates –Suspension of all programs and extra-curricular activities outside the BEP The local budget is approximately 79% salary and benefits. It would be unrealistic to expect that a $16.8 million budget gap can be addressed without reductions in this area. Total salary expenditures in FY2011 is $175 million 16 Actions to Fill Gap

17 Budget Schedule (Anticipated) AprilBudget workshops April 26Budget submitted to Mayor May 1 Budget submitted to Council JuneCouncil budget hearings June-JulyFinal state aid determined July Council adopts city budget July-AugustSchool board approval July-AugustCouncil approves ordinances