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School officials explain budget shortfall and STM corrections

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A Special Town Meeting has been scheduled for Saturday, Feb. 10 at 10 a.m. in the Middle/High School auditorium. The first three articles on the warrant relate to the School Department and represent transfers from vocational education ($70,000), reserve fund ($150,000), and free cash ($299,000). This is a large amount of money and the School Committee and administration want to be certain the citizens of Ayer understand why these requests have been made.

How did we get into this situation?

From 2002-2007, special education (SpEd) enrollment has increased from 142 students to 233 students, an increase of 61 percent. The SpEd population has increased from 10 percent to 18 percent of our overall student population. Students placed in out-of-district collaboratives or private schools have increased from 14 to 33 students, an increase of 42 percent, representing 14 percent of the SpEd population.

In fiscal year 2006, the district applied for extraordinary relief under the circuit breaker law because our costs for special education out-placed students exceeded 125 percent of the previous year’s costs. According to the state formula for this relief, we were eligible for $168,195 but received only $89,121 in additional money because insufficient funds were allocated at the state level.

At the end of FY06 the School Department faced a deficit of approximately $305,999 due to SpEd unanticipated costs for out-placed students. In order to address these unanticipated expenses and to close the FY06 school budget, the district had to use revolving funds available to the school district from choice and Shirley tuition. Consequently, the revolving account funds that were anticipated to be used for FY07 were reduced from $519,756 to $183,000. This meant that the FY07 school year began with the budget in deficit, even with the above-mentioned $89,121 increase in circuit breaker reimbursement due to the unanticipated SpEd enrollment.

The decision to tap into the revolving accounts was made deliberately by the School Committee, rather than going to the town for help at that time. For many years, the School Committee has resolved its own financial problems through the choice and Shirley tuition; however, those surplus funds are now gone.

Compounding this predicament, new students and unprojected costs increased the gap between FY07 expenses and available funds even further, to a total of $667,000. For example, we enrolled five new students over the summer in collaborative programs for a cost of $151,000 and private school tuition increases of $45,000 also occurred.

What have we done to address the problem?

The school administration knew that the SpEd budget was in trouble shortly after the 2006 Annual Town Meeting and we were gauging the impact. However, after that time, we had additional SpEd students enrolling and changes in programs for others for a total of more than $264,000 in out-placements.

A tri-board subcommittee was formed in September 2006 with two representatives each from the School Committee, the Board of Selectmen and the Finance Committee. This group met throughout the fall to arrive at an understanding of the problem and identify a solution.

As part of this process, the School Department identified $351,000 of cuts it has made and will make this year. These include reduced professional development, less substitute funding, fewer supplies, staffing positions not filled and reallocated, less maintenance, and reductions for SpEd out-placements. We will be returning four students to the district at the end of this semester for a savings of $82,000. The Ayer Teacher’s Association voted to forfeit one-half a day’s pay by reducing their calendar by half a day. This reduction will apply across all employees.

On Jan. 4, the three boards met jointly and determined that a Special Town Meeting be held to see if the town will approve three articles on the warrant.

* The first asks to transfer $70,000 from vocational education. This money is available because there was a one-time adjustment in the vocation tuitions in favor of Ayer.

* The second article asks for $150,000 from the reserve fund. In last spring’s budget deliberations, it was determined to put $108,000 in the reserve fund for these kinds of unanticipated SpEd costs.

* Article 3 asks to transfer $299,000 from free cash. Included in this amount are the following: $27,500 in additional unallocated Chapter 70 (state funding for schools), $55,000 in underestimated Medicaid reimbursement and $62,565 in savings from FY06 across transportation and vocational education funds.

We have also addressed Ayer’s financial crisis with our legislators and state officials. Sen. Pam Resor and Rep. Robert Hargraves have met with selectmen and school administrators and have verbalized their support, although the availability of funding at this time is uncertain. We are also reapplying for the $79,074 in extraordinary relief that we did not receive last spring.

Should any additional funds be made available to the School Department, the committee approved the following motions at its Jan. 3 meeting:

* Should the town appropriate to the School Department the funds from free cash to balance the FY07 budget, and should the state then appropriate some or all of the money sought by the School Department, it is agreed that the School Committee will, in good faith, earmark those monies, not to exceed the amount the town has appropriated, to revert to the town’s free cash fund.

* Should the amount received from the state exceed the amount appropriated by the town to the School Department from free cash, the amount in excess will be available to the School Department for its budgetary needs.

Please note that approval of Articles 1-3 will have no impact on property taxes.

The articles request a transfer of funds currently available to the citizens of Ayer. This is not an override.

Where do we go from here?

If the Special Town Meeting approves Articles 1-3 on the warrant, we should be able to operate for the rest of this year without disrupting teaching and learning. If the Special Town Meeting does not approve these articles, we will have to make drastic cuts immediately, including reducing busing to the minimum required by law (only those students who live more than 1.5 miles from school, and only grades six and below); eliminate spring sports for the high school and middle school; reductions in force including two librarians, 2.5 guidance counselors, elementary Spanish, and all paraprofessionals except for SpEd and kindergarten; reduce all non-teaching positions by 30 percent, including administration, custodial, secretaries and others), and some classroom teachers. These changes would go into effect on Feb. 15 should the vote fail.

Upon resolution of the FY07 budget, we will continue our work on the FY08 budget. We have been tracking SpEd costs and anticipate a savings of $400,000-plus by starting two new SpEd programs within the district, bringing other students back to the district who are able to participate in our schools, and other changes (e.g., SpEd students moving out of town). We have a number of staff members retiring this year and will be able to use the changes to reduce some positions and to hire teachers with less seniority. Please note that for FY08 we will need to restore at least some of the cuts that were made this year. We will be working diligently to find a budget balance that is right for the schools and the town.

Many erroneous statements have been made about the School Department’s fiscal situation. Citizens of Ayer need to understand the real budget problem and the proposed solution. Citizens are urged to attend the Special Town Meeting and make their wishes known through their votes. Free baby-sitting will be available at the Middle/High School so that parents can attend the 10 a.m., Feb. 10, Special Town Meeting.

Prior to the Special Town Meeting, the full tri-board will meet Feb. 7 in the Ayer Middle/High School at 7 p.m. to review the work done by the subcommittee on school finance. The public is invited to attend and to seek clarification of any issues.

For additional information, please feel free to telephone either Superintendent Nielsen or Assistant Superintendent Brian McDermott at (978) 772-8600 or e-mail Dr. Nielsen at Lnielsen@ayer.k12.ma.us or Dr. McDermott at b_mcd@ayer.k12.ma.us. We appreciate Ayer’s strong commitment to its schools.

Sincerely,

AYER SCHOOL COMMITTEE,

AYER TEACHER’S ASSOCIATION