1. Worcester Public Schools Worcester, Massachusetts Report of the Superintendent FY11 BUDGET Preliminary Estimates Transforming Challenge into Opportunity October 15, 2009

2. High Levels of Student Performance Academic Achievement Digital Age Literacy Basic, Scientific, Economic, and Technological Literacies Visual & Information Literacies Multicultural Literacy and Global Awareness Inventive Thinking Adaptability, Managing Complexity, and Self-Direction Curiosity, Creativity, and Risk Taking Higher-Order Thinking and Sound Reasoning Effective Communication Teaming, Collaboration, and Interpersonal Skills Personal, Social, and Civic Responsibility Interactive Communication High Productivity Prioritizing, Planning, and Managing for Results Effective Use of Real-World Tools Ability to Produce Relevant, High- Quality Products 21 st Century Learning

3. Starting with the Student State Requirements Raising the Bar For Every Student Raising the Bar For Every Student Systems of Support for Success in the 21 st Century Worcester’s Vision of Excellence Worcester’s Vision of Excellence

4. Challenges & Opportunities Make immediate and long- term improvements in student performance Address the needs of diverse learners Attract and retain a diverse customer base Position WPS as The Choice for Education Make immediate and long- term improvements in student performance Address the needs of diverse learners Attract and retain a diverse customer base Position WPS as The Choice for Education Prioritize & Focus on Results Capitalize on established strengths Strengthen human capital Foster effective internal and external partnerships Implement a comprehensive system of accountability Prioritize & Focus on Results Capitalize on established strengths Strengthen human capital Foster effective internal and external partnerships Implement a comprehensive system of accountability Challenges Opportunities

5. FY10 BUDGET UPDATE State is $212 million below revenue benchmarks for 1 st quarter of fiscal year. State budget shortfall projected at $600 million for year. Education cuts to balance the current year are possible.

6. Understanding the funding State annually calculates a “foundation budget level*” based on: 1.Enrollment 2.Inflation Factor Ch70 State Aid City Contribution Foundation Budget Level *The foundation budget reflects the state’s formula for an “adequate” education under the Education Reform Act of 1993 (as amended).

7. Understanding the FY10 Budget Total FY10 Spending: $264,355,365 School Committee Appropriation and SFSF to get to foundation spending * State Aid & City Contribution are reduced by Charter School Tuition SFSF $15,900,327 Ch70 State Aid* & State Charter School Reimburse- ments $165,835,069 City Contribution* $82,619,969 63% 6% 31% Foundation Budget Level

8. FY10 BUDGET (Current Year) Began with a $24 million Deficit Revenue: State Underfunded Ch70:-$15,900,327 Chapter 70: -$ 3,081,185 City Contribution:-$ 1,317,258 Grant Indirect Charges:-$ 938,050 State Grants/Reimbursement :-$ 1,517,000 Federal Grant Reductions:-$ 1,254,792 Total Deficit:-$24,008,612

9. FY10 BUDGET Solutions to balance FY10 Deficit Sources of Funds: ARRA Funds – SFSF:$15,900,327 ARRA Funds - IDEA:$ 4,199,498 ARRA Funds - Title 1:$ 3,408,607* Administrative Reductions:$ 500,000 Deficit Solutions:$24,008,432 * Less required set-aside for mandated supplemental services. ARRA - American Recovery and Reinvestment Act of 2009 SFSF – State Fiscal Stabilization Funds IDEA – Individuals with Disabilities in Education Act Title 1 - Improving the Academic Achievement of the Disadvantaged

10. Use of Stimulus Funds (Summary) YearAmountUse FY09 SFSF$18,981,5129c Cuts FY10 SFSF$15,900,327 Ch70 Cut IDEA/Title 1$ 8,182,969 Balance Budget FY11 IDEA/Title 1$ 8,189,969 Balance Budget TOTAL$51,247,777RECOVERY!

11. Use of Stimulus Funds (gb# 9-159)

12. Looking Back… April 1, 2009

13. Where we are today… Student Enrollment: 23,416 +290 from 10/1/08 Elementary Class Size: 163 (29%) classes with 23-26 students 41 ( 7%) classes with 27 or more students. Good News: Challenges:

14. Looking Back… April 1, 2009

15. FY11 BUDGET Preliminary Estimates

16. Estimated FY11 Foundation Budget Ch70 State Aid City Contribution Foundation Budget Level Enrollment: (+290*):$ 3,139,250 Inflation (3%):$ 8,237,850 Expected Growth:$11,387,925 State determines the local community’s ability to pay and Chapter 70 state aid is used to get the community to the foundation budget * Estimated amounts as of 10/15/09 From $264.4m to $275.7 m How the WPS budget would change in a “normal” year:

17. FY11 BUDGET Preliminary Estimates Estimated FY11 Cost Increases: Health Insurance (80/20 contribution) $3,100,000 Student Transportation $2,500,000 Employee Salaries (no raises*) $2,000,000 Special Ed. Tuition $1,000,000 Retirement Assessments$ 850,000 Charter School Tuition:$ 520,000 All other cost areas:$ 500,000 Total Est. Cost Increases: $10,470,000 * Each 1% in employee raises (all groups) = $1.7 million

18. FY11 BUDGET Preliminary Estimates Estimated FY11 Revenue Change: State Fiscal Stabilization -$15,900,327 Charter School Reimbursements* -$ 1,800,000 Chapter 70 State Aid** $ 0 City Contribution (state formula) $ 2,200,000 Total Est. Revenue Change: -$15,500,327 *Charter Reimbursement based on state formula (Chap 46 of the Acts of 1997) ** See Next Slide for State Aid Detail

19. FY11 BUDGET Preliminary Estimates Chapter 70 State Aid Issues:  Budget model assumes level funded Chapter 70 aid (98% of FY09 funding level)  Massachusetts Budget & Policy Center estimates FY11 State budget gap at $2.24 billion  Each 1% change in Chapter 70 = $1.8 million  Inflation factor year-to-date is -0.5% The budget model assumes that the state will not be able to meet the foundation budget for each community.

20. FY11 BUDGET Preliminary Estimates Estimated FY11 Budget Status: Revenue Change: -$15,500,327 Expenditure Increases: $10,470,000 Preliminary Budget Deficit: -$25,970,327

21. FY11 BUDGET Preliminary Estimates Other Budget Items to Watch: State Grant Funding ($8.3m) Circuit Breaker Reimbursement ($1.8m) Charter School Reimbursement Level ($4.6m) Federal Grant Funds & Census Data ($38.6m) We expect that the state will make every attempt to fully fund the foundation budget. Watch the state grant items in the budget process; they could be reduced to achieve foundation level spending.

22. FY11 BUDGET Preliminary Estimates Legislative suggestions to address deficit: Redistribute Chapter 70 allocation No new charter schools Freeze special education tuition rates Eliminate unfunded private, parochial, charter, and non-resident vocational transportation mandate Revise charter school funding formula Support Pension Schedule Adjustment

23. Looking Forward to FY12… The FY11 Budget uses $8.2 million in IDEA and Title 1 stimulus funds. These funds will not be available in FY12

24. Starting with the Student Prioritize & Focus on Results Continuous improvement and learning for adults Continuous improvement and learning for adults 21 st Century College and Workplace Readiness Increase Return on Investment Increase Return on Investment

25. Delivering on the Promise Enlist all stakeholders to engage with the district’s focused agenda for improved district, school and student results Link high levels of adult learning throughout the organization to high levels of student learning Use systems of accountability to increase the value of WPS for students, families, and the community

26. A Student-Centered Budget The Administration has started to work collaboratively with the School Committee and our school community to develop FY11 budget priorities and recommendations resulting in a student- centered balanced budget.

27. NEXT STEPS… FY10 State Budget Watch (9c cuts expected by November 4) Joint meeting with City Council – November 10 th at 5:30pm in City Council Chamber School Committee and school community priority setting Governor’s Budget – Mid-January

28. Report of the Superintendent FY11 BUDGET Preliminary Estimates Transforming Challenge into Opportunity October 15, 2009 This presentation is available at www.worcesterschools.org