| | CITY OF EAST PROVIDENCE RHODE ISLAND JOURNAL of COUNCIL JOINT SCHOOL COMMITTEE MEETING MARCH 12, 2007 | |
The City Council with the School Committee meets in the Council Chambers on Monday, March 12, 2007 and Mayor Isadore S Ramos calls the meeting to order at 5:35 P.M.
| Present: | Mayor Isadore S. Ramos | | |
| | Robert E. Cusack | ) | Council Members |
| | Bruce DiTraglia | ) | |
| | Valerie A. Perry | ) | |
| | Bryan P. Silva | ) | |
| | | | |
| | Richard M. Brown | ) | City Manager |
| | William J. Conley, Jr. | ) | City Solicitor |
| | Virginia B. Nunes | ) | City Clerk |
| | | | |
| | Dr. Jacqueline Forbes | ) | Superintendent |
| | | | |
| | Chairperson Mildred Morris | ) | School Committee |
| | Vice Chairperson David A. Medeiros | ) | |
| | Eileen S. Lovett | ) | |
| | Robert Faria | ) | |
| | Steven E. Santos | ) | |
The Salute to the Flag is led by Mildred Morris.
Mayor Ramos stated this meeting has been set up as a joint workshop to discuss financial matters of the city.
Mr. Brown stated about two weeks ago the School Superintendent and I met concerning financial relations for the remaining fiscal year and the upcoming fiscal year. The Superintendent discussed the potential deficit that may occur in the School system as a result of the increase of Special Ed costs and the unbudgeted costs of the employee buy backs that will be paid this year and continue to be paid next year under the contract. We’re concerned that unless we get a handle on these issues, by the time we understand them, it will be too late to take action to eliminate a potential deficit or to some how find an additional way to deal with this. The City Council and the School Committee has indicated in the past that they want to meet more frequently to discuss common areas of interest, most important at this time I believe is finances. I hope this is a first in a series of regular meetings that both bodies can conduct to find some commonalities as we try to operate the best systems we can within the revenues we have available to us.
Dr. Forbes stated she would like to share their Financial Report ending February 2007 (handout). You will see we have our Revenues and Expenditures and at the bottom a Projected Surplus/Deficit. You will see the budget is balanced for the month of February. That is a Monthly and Yearly balance. Please note the school committee is committed to balance the budget 2006 -2007 school year. Please know that is a projected balance budget for the end of this school year. However, first we are only four months into the fiscal year, November, December, January and February. Also, you need to understand Special Ed Tuitions and Health Insurance Claims fluctuate tremendously.
To illustrate the fluctuation in Special Ed Tuitions the January Financial Report shows a deficit of $270,631 that was based on enrollment at the time. Since then we have had a decline in enrollment so we now have a balanced budget. That will change; it changes on a daily basis.
December shows a deficit of $145,584, November shows a balanced budget. Please note out of this quarter we have had two months of balance budget and two months of projected deficit. No one has control over Special Ed Tuitions or our Health Insurance Claims. They will fluctuate and those two line items will determine if we have deficit or surplus at the end of the school year. Please know we are committed to cutting back on our expenditures. I’ve frozen the budget as of March 5, 2007 on all non essential items.
Mr. Medeiros asked if Dr. Forbes would explain how it fluctuates from a deficit of $270,631 to a balance budget in one months time.
Dr. Forbes stated last month we had 13 departures from our District. This month we had $25,649 extra in Tuitions but we were able to transfer 2 other line items to cover the cost of that. That doesn’t mean tomorrow I won’t get additional Tuitions moving into the District.
Mayor Ramos asked for reasons of the 13 departures.
Dr. Forbes stated some moved out of town, some were placement changes.
Mayor Ramos asked do we have to pay for placement changes.
Dr. Forbes explained that if the placement is still in our District, we still pay. However the 13 departures were out of District so we do not pay.
Councilman DiTraglia stated obviously this meeting was called for a reason. We’re going to have a problem in mid term. Am I correct? It’s not looking good.
Dr. Forbes answered yes, (handout) and with the permission of the City Council and the School Committee I would like to share what I consider to be illuming or an impending crisis.
When I say crisis I don’t say that lightly. I believe that the East Providence School Department is facing a Financial Crisis for the 2007 -2008 School Year, that’s next year. I’m defining crisis as the following: A crucial time in which a decisive change is impending with the distinct possibility of a highly undesirable outcome.
Last Summer S3050 R.I. General Assembly instituted a new local appropriations cap 2007 -2008 -5.25%. Additionally last October our East Providence City Council has approved a new local appropriations cap 2007- 2008 – 3.5%
All amounts in our budget exceed the cap. Salary and Step increase are 6.4%, Health Insurance costs are expected to rise 5.8%, and Employer contribution rates for pensions will increase 12%. Other anticipated obligations are Special Education Tuition costs which are expected to increase 20%. Total utility costs will rise 10%, and Transportation costs will rise 3%. The School Department has had to replace roofs at a number of schools and is replacing the heating system at the High School. These bills are coming due in the next fiscal year. The result will be a significant increase in the Debt Service line of the budget.
Anticipated Revenue Increases are City Appropriations increase 3.5% - $1,448,783, State Aid increase 3.0% - $802,868, Local Revenues increase 9.0% - $187,000. Total projected revenue increase for Fiscal Year 2007-2008 - $2,438,651.
Our anticipated projected expenditure increases for fiscal year 2007 -2008 - $5,387,000.
Our budget shortfall is $2,948,349. That is way I say it’s a pending crisis. What are we going to do about it? We’re here at a workshop and I have some possible solutions for you to please consider. Allow the School Department to operate under the State Tax Cap of 5.25% instead of the City Tax Cap of 3.5%. Continue to encourage legislators to revise mandates and address other reforms in education funding, seek relief from Unions, Legislators, and Rhode Island Department of Education, continue to explore savings that maximize efficiency while maintaining high quality education, and transfer debt service to the city side of the budget.
Councilman DiTraglia asked where will we get the money for this.
Our budget process starts in April, we’ll be looking to cut wherever we can, and maximize efficiency.
Mr. Santos stated that Dr. Forbes has been working, talking to legislators pursuing those solutions, Federal and State.
Mayor Ramos stated we have to stay in our Cities 3.5% tax cap.
Mr. Brown stated if we operate under the 3.5% unless we have relief from the 3.5% for the Municipal side all you’ve done is shift the burden from the school side to the general government and made it more difficult. Just like debt service, if you take it out of the school budget and give it to the city side all you have done is shift the burden.
Dr. Forbes believes that will be mandated by the State in 2009.
Mr. Brown stated it could be mandated by the State from how it’s presented in terms of chartered accounts, in terms of how we budget for it whether that money is considered part of the base from the year before and remains with the schools or goes over to the other side remains to be seen.
There are a number of things we talked about that we’re looking for relief from. Our spending requires the commission of others, our bargaing units and our Legislators. We all know change is difficult to achieve especially in the short term. I started reviewing the paperwork of a previous study done in East Providence that talked about consolidation of similar functions between the school committee and the city such as building maintenance, ground maintenance, vehicle maintenance, and custodial services basically those things that are not education in orientation. It could go as far as consolidation of personnel and financial management resources. One of the things I talked about when I initially presented my budget was the idea that the School Committee and the Superintendent be allowed the flexibility to focus all their attention and resources on educational issues and allow the city general government side to worry about the physical infrastructure. That’s within our control; we don’t have to ask for Legislative approval, some will require some bargaining units, not all because we’re not talking about eliminating positions.
Ms. Morris stated a few years ago the City hired a consultant for reorganizing the city, consolidating committees and the consultant came back and said it wasn’t possible because of the Unions. So what you’re saying is that there would definitely have to be an agreement with the unions to consolidate.
Mr. Brown stated the consultant didn’t say it would be impossible to do; he presented it as a challenge. If we go through and document the reasons we’re doing it and talk about the efficiency as well as the savings that we can use to support our systems and then when we sit down to negotiate the impact with our bargaining units I think we can come up with a scenario where the impact on the individual bargaining units and the individual union members is minimized. We’re not looking to put people out of work; we’re looking for a way to work smarter.
Mayor Ramos stated that the committee was established when he was in the school department. He and Roland Grant put a committee together for the school side versus the city side on things we felt we could put together as one. The situation was different back then. People were worried about their own turf. The school side felt it had more unions and it would be difficult to change and that was true at the time. The crisis we face in the City, we’re going to have to look at this in a more serious way. How we can put our pieces together because this is really one City and we’re all in here for the same thing. Sometimes we’re not going to be well looked upon, we have to help this City and the Students.
Mr. Faria stated this has to happen. How do you eliminate a budget? I think the duplication of service has to be looked at. We need to set guidelines and start as soon as possible.
Councilman DiTraglia stated we’re going to have a shortfall of almost $3,000,000 if this was a private company you would have to cut. I’m not going to count on the State. We have to make up the $3,000,000 ourselves and anything we get will be a bonus. Mr. Brown and the Financial Director would have to start reviewing this. Do some cut backs.
Mr. Brown stated I’d be glad to work with Jim McDonald and the school committee. The only roll I can have on this is advisory. I’m not part of their process. I don’t work for the school committee that falls under the jurisdiction of the Superintendent of schools. I
appreciated Mr. Faria’s comments. I don’t mind doing the work to update that study, but I need to know that both the school committee and the council are committed to explore that process. I don’t want to start that process and a month down the road come up with some substantial savings and everyone look at me and say you can’t do that, your crazy.
Councilman DiTraglia stated we’re all involved and we’re all up here for a reason. We all work for the tax payers and we all have to chip in and do what we can to save this to put it together.
Mayor Ramos stated when the City Manager gets into that plan; I hope the school committee agrees that we should have some council members on that committee so we can be part of that process to show our commitment.
Councilman Cusack asked the City Manager in the review of that previous study, do you have any idea of the potential savings from the consolidation.
Mr. Brown stated no I don’t. The study was done several years ago so the numbers don’t have any validity now. Also I reviewed it briefly and I’m not convinced that the review was as comprehensive as it needed to be.
Councilman Cusack asked what do you think would be the framework for a new evaluation. Would we need some outside help or can your organization and Dr. Forbes administration look at it.
Mr. Brown stated he would like his staff to look at it first. We may need help later on, but I think we could probably give you a pretty good estimate in house.
Councilman Cusack asked is the bottom line the elimination of some positions.
Mr. Brown stated the bottom line is the elimination of spending.
Councilman Cusack stated reallocation of duties.
Mr. Brown stated it may be reallocation of duties. We may discover things that we haven’t done as well as we need to do. Applying some of those recourses may save money in the long run. We may talk about the elimination of positions over time, not necessarily laying people off, but have an organization structure that we would like to achieve to the extent that we may have to reallocate positions temporarily and then fill those positions later, but get down to a more effective organization. There maybe technologies we can bring to bear to increase productivity or technologies to better heat and cool our buildings.
Mr. Santos asked how many open positions are there in the school and city unfilled.
Dr. Forbes stated I believe about 5.
Mr. Brown stated 3 – 5. Some of the positions that are vacant, we are filling as a result of minimum manning requirements, primarily in Fire and Police. We spend more when a position is vacant because we’re paying time and one half, so we try to get that position filled.
Mr. Santos asked if there are open positions that don’t need to be filled.
Mr. Brown stated we only fill essential positions. We have a couple of positions that we’re holding off on and a couple with possible reorganization on our side.
Mr. Santos asked Dr. Forbes are there positions we don’t have to fill.
Dr. Forbes stated we need to fill those positions. There is a secretarial position, 3 custodian positions and a supervisory aid. They are all budgeted in this year and need to be filled.
Councilman Cusack asked Dr. Forbes about mandates and the rules of Rhode Island Department of Education. When we met at our Legislative Breakfast and you gave a detailed presentation about the monies that could be saved with a stroke of a pen by Peter McWalters. We’re 1 out of 36 school districts. Because a change in class size would increase of the work load of the teacher in a Special Ed class, is there any push back from the Unions statewide. Is there any lobbying on their side to undermine our efforts with Mr. McWalters?
Dr. Forbes stated there are always lobbyists at the State House. Senator Daponte and Senator Moura have submitted the same bills that our Representatives have submitted. I haven’t heard back if they have had any success. I don’t know of any push back from the Union.
Councilman Cusack asked what is the dollar amount for potential savings changing the class size of Special Ed.
Dr. Forbes stated $300,000 this year going from 10 to 12 in a self contained class room.
Councilman Cusack asked about group homes. We’re host to Bradley Hospital, the States only Pediatric Physiological Services Hospital. Statewide we bear a greater burden.
Dr. Forbes stated our Legislators have made that case with 3 bills in the House, 3 bills in the Senate and a letter to the Governor asking for relief.
Councilman Cusack asked what the magnitude of savings is if those were enacted.
Dr. Forbes states for the group home alone I would think it will be well over $731,000.
If we added all the relief we’re asking for it will be well over $1,000,000.
Councilman Cusack stated that would be over a third of the shortfall we’re looking for next year. As a City Council we want to say close with those Legislators.
Ms. Morris asked the people here tonight to contact your Legislators ask them about these mandates.
Councilman Cusack stated I don’t know if people are aware of those mandates. For instance, there are full size buses transporting 1 or 2 students. If a student gets expelled, we provided them with tutoring which cost about $3,000 and now we have to send them to East Bay Educational Collaborative which is $25,000.
Ms. Morris went to a Chairman’s committee meeting and was informed that in the North End they pay $300 per person which she informed Dr. Forbes.
Mr. Mederios stated we need to work together on this. I’m willing to work on the committee for the study with the Superintendent and the City Manger and so would Mr. Faria.
Mr. Santos stated some Cities have a joint finance committee. Do you think it would be a good idea for us?
Mr. Brown stated he would like to know a little more about it.
Councilman Cusack stated Blue Cross is the third party administrator for our plan and how they separate from the insurer who is the City. I understand that there would be significant savings, hundreds of thousands of dollars a year if moved, for example at the State level saving $20 million a year changing to United Health. Keep the plan itself intact, but have a provider do the software, bookkeeping, the claims management behind the scenes for a price less than we’re paying now. Is there any progress on that? I reviewed the contract and in section 5.1 the School Committee shall not change the Insurance Carrier without the approval of the Association. The Insurance Carrier is the City, we are not changing that. Whoever drafted this contract of 135 pages sure didn’t title the various parties properly and hasn’t for a very long time giving the fact that we have been self insured in the City for a long time. This gives rise to litigation. Premiums weren’t premiums. Now we have a Carrier that’s not a Carrier, it’s a third party administrator. If we can save a lot of money with that, are we on the way to doing that.
Mayor Ramos stated that’s being settled with the school committee. Dr. Forbes and the Unions have been working and are in negotiations.
Ms. Morris stated we’ve been working very hard on this.
On motion of Councilman Silva it is unanimously voted to adjourn.
Mayor Ramos adjourns the meeting at 6:40 p.m.
Attest:
_________________________________
Virginia B. Nunes
City Clerk
Approved: April 3, 2007