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2009-2010 Superintendent’s Budget

Presentation for PPSD School Board

March 23, 2009

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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

• Enrollment Changes

• Labor Contract Obligations– Salaries, Benefits, Class Size

• Employee Retirement Contributions– State– Local

• Service Contract Obligations– Transportation– Custodial and maintenance– Outside tuitions

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Key Information

• Student Enrollment– 2% overall decrease in student enrollment-- Student population of 23,300– Nearly a 20% reduction since 2003

• External Budget Review– Broad Foundation funded budget review by Alvarez and Marsal

• Facility Changes– Re-opening of Nathan Bishop Middle School– Opening of the Providence Career and Technical Academy– Opening of the Athletic Complex– Closing of the Academy of Service

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Unknowns

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Overview

Overview

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Budget Increase

• 2009 Budget $322,122,729• 2010 net Exp. Increase 11,452,254• Unadjusted 2010 Budget 333,574,983• Adjustments

– Reduction in State Retirement* 4,028,579– Reduction in Debt Service* 4,470,804

• Adjusted 2010 Budget 325,075,600

* Reduction also reduced revenue

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Proposed State aid to Education

• 2009 Unrestricted aid $189,495,228• Less (Pension Reform) 4,028,579* • Reduction in Aid 9,537,231• Reduction in Group Home 165,000• Subtotal $175,764,418

• Plus Fed. Stabilization Funds 9,537,542• 2010 Unrestricted Aid $185,301,960

* Expenditure reduction as well

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Historical Budget Changes

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Revenue

• Estimated Revenue $311,114,138

City Revenue38.62%

Other0.59%

Medicaid1.21%

State Aid59.58%

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New Spending Requirements

• Providence Career and Technical Academy ($450,000)

• District wide Athletic Complex ($350,000)

• Nathan Bishop Middle School ($500,000)

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Increases(in millions)

$ % • Salaries 5.7 49.6• Medical Ins. (active & ret.) 2.5 21.7• Special Ed. Tuitions .3 2.6• Other Employee Benefits 1.1 9.6• Vendor Contracts 1.7 14.8

Total $ 11.3

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Expenditures

• Proposed Expenditures $325,075,600

Benefits26.3%

Equipment0.1%

Supplies1.9%Services

20.2%

Salaries51.5%

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Expenditures

Salaries $167,286,359

Benefits 85,372,714

Services 65,641,906

Supplies 6,309,316

Equipment 465,305

Projected Expenditures $325,075,600

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Revenue(millions)

• Unrestricted State Aid $185.3

• City Revenue 120.3

• Medicaid 3.8

• Other 1.8

Estimated Revenue $311.2

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Notes

• Budget Gap must be eliminated prior to final approval.

• Unclear how Federal Stimulus funding can be used to reduce the gap

• City appropriation is limited by (S3050A) Tax Relief Law.

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All Expenditures Are Under Continuous Review

• Major Cost Centers– Staff– Out of District Tuitions– Transportation– Vendor Contracts– Health Care

• Incorporate savings identified by Alvarez and Marsal into budget plan

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Challenges to a balanced budget

• The rate of increase in the district’s fixed costs has been greater than the overall budget growth causing budget cuts in the area of school reform and improvement.

• 98% of the PSD Budget is fixed Costs (Due to several years of continuous reductions)

• PSD is limited in what can be eliminated from the budget due to legal requirements and contractual obligations (fixed costs).

• City revenue growth is limited by S3050A

The only budget driver that is not a fixed cost is Student Achievement.

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Next Steps

• April Budget Workshops• April 28 Budget submitted to Mayor• May Budget submitted to Council• June Council Budget hearings • June-July Final State Aid• July Council Adopts City Budget• July-August School Board Approval• July August Council approves

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