AYER -- Ayer-Shirley School Superintendent Carl Mock presented the Ayer Finance Committee with an overview of the regional school district's overall $25.6 million fiscal 2014 budget. The town's contributions to the district total $14.3 million, a six percent overall increase, or $795,000 between the two towns.
Though Ayer is assisting Shirley ease into its annual assessment over five years, this year's Shirley assessment is causing consternation in that town, said Mock.
Ayer's RSD assessment is due to increase next year by $239,000, or 2.8 percent, to $8.8 million. Meanwhile, Shirley's assessment is to increase $555,000, or 11 percent, to $5.5 million.
This year, the school district was to close "maybe a little in the black" if there hadn't been a $500,000 increase in unexpected special-education costs, said Mock. The shortfall "really bothers me," said Mock, who said the shortfall is his first in 25 years of budget building.
The shortfall will consume "whatever reserves we came into the regional district with." Mock said the shortfall will be covered by the $400,000 in school reserves and last year's $150,000 year-end surplus. "We had hoped to increase those funds a little bit to use next year as one-time monies," said Mock.
Instead, the regional school district will operate on a "very, very low" reserve balance, something Mock called "very scary" in terms of a $25 million budget.
Looking ahead, Mock explained that hundreds of thousands of dollars in savings have been targeted in: health insurance, with a change in plans ($190,000); a drop in the number of in-district Lunenburg students attending on a tuition basis (saving $170,000); a drop in the number of students opting out for charter schools ($170,000); and school choice ($100,000).
Some costs are due to increase in fiscal 2014: special education is to increase by $320,000 atop an $185,000 increase in special education transportation costs. The high school renovation project capital debt of $205,000 kicks in and retiree health insurance coverage is up $160,000.
The new $56 million high school renovation project aims to "reverse the flow" of students leaving the district to attend charter, vocational, or neighboring schools and districts. The towns are saving "slightly" on charter and choice-out students by $270,000, but on the downside, there are also 20 fewer choice-in students enrolled in the Ayer-Shirley district. Business Manager Evan Katz called the in- and out-choice student flow a "break-even" situation.
Mock argued that some expenses have been ignored for too long, like $100,000 included in the budget for the institution of a therapeutic program at the high school as is already in place at the elementary and middle schools to assist at-risk students.
The funding was taken out in the first round of budget cuts last year. Mock said that was "probably a mistake," noting the positive impact the program can have for students and even the bottom line if the district doesn't locally provide the services.
Costs for instructional supplies and materials are to climb by $36,000, English language learning requires $30,000 for added staffing, and Mock said the indoor track program, which has been supported by fundraising as a club for the past two years, would come under the district budget for $8,000.
Yet to be determined is the amount needed for salary increases in the coming year.
Mock said "I wasn't even going to waste their time" in asking the school principals to update their lists of unmet requests for furniture, books or technology. That list stands at nearly $605,000.
General fund revenues will not close the gap. The governor's proposed budget includes a $45,000 increase in Chapter 70 education monies. Other state revenues are holding steady except for regionalization incentive money, which is due to drop by $20,000 in the coming year.
Shirley's assessment is climbing by $555,000 next year. That's $165,000 above the $390,000 assessment increase Shirley had to cover last year.
Though Ayer Town Meeting agreed to cover more of Shirley's portion of the high school project debt on a stepped basis to assist Shirley's debt service on the middle school, Mock said Shirley is struggling with an untenable fiscal situation.
"I believe we have a budget that's still too small, frankly," said Mock. "I believe we're still $500,000 shy of what you need to run the school district in the way you want to run it and the way you want to see municipal departments run." Mock cautioned that he didn't want to "pit departments against one another," but added "we're not close to where we need to be."
But Mock said Shirley's levy capabilities are limited to meet the school assessment demands. "This asks for 85 percent more than their total tax levy and new growth capability, and that assumes that all of it went to the school."
The state requires communities to contribute their share of the regionalized school costs. Looking ahead, Mock summarized "this is not a one year problem" for Shirley.
Ayer Finance Committee member Michael Pattenden said, based purely on numbers at the bottom line, "Ayer is paying 50 percent above what the state recommends?" Pattenden asked why Ayer's operating assessment totaled $8.8 million compared to Shirley's $5.5 million towards an overall $14.3 million operating assessment.
"Your math is correct," said Katz. But Katz said the state determines the required local contribution numbers. "Most agree" the formula is "inadequate," but Katz said the calculation is "used as a starting target. But your math is absolutely 100 percent on target."
School Committee member Pat Kelly cautioned "the formula is broken" and "there is no way any school district could be run (purely) on the required local contribution.
Finance Committee Chair Scott Houde said it came as a "surprise" to him that Shirley is struggling with the assessment. Houde said at the last Leadership Committee meeting -- where the towns' two financial teams meet with regional school officials -- there was talk of approaching the local delegation to see if they could "help at the state level."
Mock said the lawmakers have said they hold "little" influence over the state formula. "We're reflecting the effect of the governor's budget ... It's hitting some districts big time."
"One-time money won't do it," acknowledged Houde.
"Right," said Kelly. The problem in ramping up the district "will be here for at least two to three more (budget) cycles."