FY15 School Budget, Part II

A week and a half ago, I wrote about the petition that was circulating among Amesbury residents, asking the School Committee to issue a new FY15 School budget recommendation.  Doing so would allow the City Council to debate and vote on a higher amount, an amount that would let us avoid some or all of these planned reductions:

• limit the ability of graduates to enter most colleges and universities, through the reduction of foreign language offerings to 2 years only (most require 3 or 4 years);
• eliminate the option for high school students to earn college credit through the Early College program at Northern Essex Community College;
• eliminate technical education classes at the middle school and high school; and
• eliminate consumer science education classes at the middle school

The potential impacts include:

• increase the number of study hall blocks at the Middle School;
• strain our capacity to meet the Commonwealth's 'Time On Learning' requirements, requiring us to upgrade 'Curriculum Enrichment Blocks' to creditable time, to substitute for the loss of actual class time with a full curriculum; and
• require our already strained administrators to spend more time monitoring study halls and cafeteria blocks, rather than performing their duties as administrators

In the 2 week period from May 19 – June 2, almost 2,000 Amesbury residents signed a petition asking the School Committee to make a new recommendation.  The petitions were presented to the School Committee at their June 2 meeting last week. 

We already knew that the MA Senate had taken up Sen. O’Connor-Ives’ request for funding of an Early College program through Northern Essex Community College.  Chances seem good that it will remain in the final budget that comes out of conference committee with the House and will be available in the fall to area high school students, including from Amesbury.

The bad news is that on June 2, the School Committee did not take up the question and reconsider the issue.  The good news is that the Mayor and the administration have been working to mitigate some of these reductions by other means.

Specifically:

• Free up $45,000 by moving the cost of the School Resource Officer out of the School budget and into the Police Department budget
• Requesting $35,000 in ‘Free Cash’ from the City Council
• Identifying $40,000 in new savings and/or revenue within the School budget

The Early College addition to the Commonwealth’s FY15 budget and the re-allocation of the SRO officer takes care of about $90,000 of the $330,000+ needed to avoid these reductions.

Regarding the use of Free Cash for funding on-going expenses such as personnel, I believe that it is usually bad policy.  On principle, I would not normally support its use in this way.  Funding personnel with free cash essentially compounds the real cost of that position.  We add the future personnel costs to our operating budget base, without allocating corresponding revenue to fund that base this year and beyond.  It’s like finding a $10 bill and deciding that you can therefore add HBO to your cable, which works great until month 2 comes and you don’t actually have the cash flow to cover it.  That said, the proposal has the virtue of being a very low amount in the big picture ($35,000), not even the value of one teaching position, so the committed sin is minor and progress is often comprised of such choices.  

Finally, regarding the $40,000 that the administration will be aiming at finding, it is fair to say that this amount is speculative and a 'work in progress.'  Assistant Superintendent spoke about a potential $20,000+ from rental fees to Lesley College, which would be great.  No other substantive revenues or savings have been identified yet.

We have confirmed that the APD will be absorbing the cost of the School Resource Officer and I am sure that Mayor Gray will make good on his word and will bring a $35,000 Free Cash request to the Council very soon.  

That would get us $80,000 firm towards the list of 4 positions set to be eliminated.  

An additional $40,000in revenue/savings would get us to $120,000, or not quite 2 positions. 

I met with Mayor Gray last week to discuss these proposals.  While neither of us was pleased with the reductions and the impacts, we agreed to disagree on the solution.  He was firm that he did not support increasing the School’s proposed FY15 budget beyond the current amount and I, that I did.  As I wrote in my last blog post, the City has very healthy excess capacity under our Proposition 2 ½ levy limit and could absorb an increased budget and still be fiscally responsible. 

What’s next? 

The City Council will watch for Mayor Gray’s Free Cash request and the School Administration will continue to work on freeing up money.  

I also believe that there is real energy among parents and residents to look forward and push for better outcomes for next year.   We’ve had too many Groundhog’s Day experiences with the School budget – costs outpacing revenue, the steady march downwards in terms of offerings, and the displacement of other municipal needs by school budget pressures.

I think that to improve our outcomes for next year, we will have to look outward to the state context (Chapter 70 funding formula, un- or poorly-funded mandates, costly testing regimes) AND look inwards (improved financial reporting from the schools, earlier and long term anticipation of budget dynamics and the formulation of strategic responses).

If even a fraction of the energy that I’ve seen in the past month can be focused forward, that will be a great start.

FY15 Amesbury Public School Budget

The City Council's Finance Committee is half-way through our hearings on the FY15 City Budget.  The Finance Committee makes initial recommendations for all departments, including Amesbury Public Schools, on Thursday, June 5th.  The City Council takes its final votes on all department budgets and line items on Tuesday, June 17th.

I want to talk about the proposed FY15 Public Schools budget and lay out my thoughts on it.  At the start, let me state that I share the concerns of many parents and other residents that the FY15 Schools budget, as it currently stands, includes reductions that will:

• limit the ability of graduates to enter most colleges and universities, through the reduction of foreign language offerings to 2 years only (most require 3 or 4 years);
• eliminate the option for high school students to earn college credit through the Early College program at Northern Essex Community College;
• eliminate technical education classes at the middle school and high school; and
• eliminate consumer science education classes at the middle school.

I am also concerned that the loss of teaching staff at the middle school will:

• increase the number of study hall blocks;
• strain our capacity to meet the Commonwealth's 'Time On Learning' requirements, requiring us to upgrade 'Curriculum Enrichment Blocks' to creditable time, to substitute for the loss of actual class time with a full curriculum; and 
• require our already strained administrators to spend more time monitoring study halls and cafeteria blocks, rather than performing their duties as administrators.

 Bigger picture impacts:

• potential increase in 'choice out' students as school quality declines, which would be a net loss; and
• potential decrease in house values (and related rise in property tax rate), as school quality has been shown to be a primary determinant for home buyers (investment in schools tracks increases in home values).

Per information from school administrators distributed at the April 1, 2014 School Committee meeting, the value of these eliminated positions + Early College program is $330,542.

The options for restoring these positions at this point in the budget process are very limited.

• At the present, the City Council has no authority to increase the school budget (under MA law); we can only accept it as proposed or reduce it.  
• There was slight hope that the State Senate might increase the amount of local school aid (aka Chapter 70) in the Commonwealth's own FY15 budget, but the Senate passed a budget last Friday that kept the Chapter 70 revenue estimate that we already had baked into our budget cake.
• The City Council could debate and vote on a higher amount for the Schools IF the School Committee takes a new vote and approves a higher amount before our final June 17 vote.
• The Mayor could bring one or more 'supplemental' budget requests to the Council outside of the normal budget process for our debate and approval.

Following Mayor Gray's submission of his total budget request to the City Council on May 12 (2 weeks ago), response from residents concerned about these reductions and their impact has focused on requesting the School Committee to take a new vote and make a new recommendation, thus enabling the City Council to debate and vote on it.

In fact, in just the last 10 days, a petition with this request was drafted, organizing house parties were held around town, 40 'petition captains' volunteered to gather signatures, and over 100 'I Support Amesbury Schools' signs were distributed around Amesbury.  As of tonight, over 800 signatures have been gathered, with a goal of 1,000 by next week, for submission to the School Committee.

I wholeheartedly support this effort and have been happy to lend my time and energy to it.

Let me be clear about a few things.  I think that Mayor Gray did his job as Mayor in looking at Amesbury's total financial picture and giving the School Committee and school administration a set number to develop a budget within.  Then the School Committee (with Mayor Gray as Chair) did its job in developing and approving a budget within that parameter.  And, with the budget submitted on May 12 to the City Council, it is now the Council and the public's turn to 'do its job', which is responding to the budget and advocating regarding it.  In that spirit, I join lots of residents and parents in saying, 'We can do more.'  I'm hopeful that we'll find a way to make this work and avoid these impacts.

Also, asking for these positions to be kept in the budget is not asking for a 'level services' budget.  That would mean keeping a facilities coordinator (to manage our building assets at 4 sites), a transportation coordinator (to manage transportation services across the system), and a central office assistant (to, among other things, more than pay for itself by handling Medicaid and other insurance billing to help cover SPED costs).  Instead, all of those responsibilities now fall on the Superintendent and Assistant Superintendent directly (in addition to their many other responsibilities).

I believe that Amesbury has the ability to cover these needs (it will cost about $52 to the average single family house owner) and I think that it is reasonable to let the City Council debate and vote on this budget amendment.  But this will only happen if the School Committee takes a new vote.  If you have not already, please consider signing a petition.  Write to the School Committee, the Mayor and the City Council about this.  Come to the next School Committee meeting on Monday, June 2 at the High School.  

One last note: the Senate Budget passed last week DID include an amendment by our State Senator Katie O'Connor-Ives directing money to Northern Essex Community College, funding an area-wide Early College Program for local high school students.  It stands a good chance of surviving the 'conference committee' process with the House and becoming a part of the Commonwealth's FY15 budget.  This is great news and would resolve one of the areas of concern.

Lower Millyard Development -- May 2014 Update

I get a lot of questions about the Lower Millyard project, so here is another progress report.  I'm on the LMY Task force and we had our monthly meeting this morning.  Here are some updates on the project.  Items are listed more or less in the order that they will be rolling out over the next year +.

• Brownfield Cleanup: This is for the land between the existing and soon-to-be vacated DPW buildings and river.  The official 'ground breaking' for this was held earlier this week and the portion of the Riverwalk on Water Street has already been blocked off.  Digging will start next week and should be done in June, in '4 - 6 weeks.'  With the long winter, start on this initial piece of the big puzzle has been delayed.  I was unable to attend this but I was pleased to see that both our current and former Mayors were there for this.  A project like this (20 + years in the making) transcends changes in administrations and requires a long view from lots of folks in order to ever get done.  It took a lot of effort from Mayor Kezer to get us to this point and it will take a lot of effort from Mayor Gray to see this through.

• Heritage Park Construction: This will begin after the clean-up is complete.  With the late start to the clean-up, this also will have a late start (in June).  This is especially important since the bulk of the State resources paying for the park are supposed to be expended by the end of June.  However, Mayor Gray has worked with the relevant state agency and this should not be a problem.  What is more of a problem is that (not unlike the Fire HQ rehab), the winning bid came in well over the allocated amount (allocated = $548k for construction; winning  bid = $738k).  What does that mean?  It means that, as with the Fire Dept. HQ rehab, the scope of the project will have to be scaled back substantially, given the almost $200k difference.  Unfortunately, this means that the planned water feature will likely not be included in the final design.  The City is working to shift costs where possible out of construction and on to other aspects of the overall LMY redevelopment, in an effort to preserve the water feature. 

•  Demolition of DPW Building:What we are talking about here is the demo of the building immediately in front of you in this view of the LMY (the two-storey building behind it will be preserved as the new location of the Carriage Museum).  This is currently out to bid but that
  
  process will be completed shortly.  The DPW is on deadline to remove all equipment from there and the building should be down completely by the end of June.  These first three elements will bring substantial and rapid change to the 'look' of the Lower Millyard area.

• Water Street Re-Alignment: This is also currently out to bid.  This will start this construction season but will continue into next year.  This involves moderating the curve of Water Street, directing it through what is now the DPW building that you see in this picture.  This will bring new curbing and new sidewalks, as well.

• Riverwalk Extension + Boat Launch: These elements are still in design review and negotiation with the Department of Transportation (primary funder).  At best, this work will begin this year and extend in to FY2016.  Don't go buying a new kayak just yet.  The Riverwalk extension will:
• add a new bridge across the Back River, avoiding the current re-direction that the Walk takes across the existing Water Street bridge over the Back River, connecting the Walk in a direct line into the new Heritage Park
• extend the Riverwalk across the Powow River to Mill Street (and into the 'valley' area below downtown) and then bring it up Mill Street to Main Street, where it can connect with the Upper Millyard walk
• create a small craft boat launch in Heritage Park for canoes and kayaks
• shore up the banks of both the Powow and Back Rivers where they meet by Heritage Park

For more information on the project:

• HERE is a link to a Mass. Development overview of the LMY project. 

• HERE is a link to a great set of graphics that visually indicates the where & what of this project, using photos of current conditions. 

Amesbury City Council Update April 2014

A lot is going on in the next few months for the Amesbury City Council.  Here's a preview:

Tuesday April 8 Council Meeting:

• We have second reading/public hearings on:
• Medical Marijuana Overlay District - sponsored back in January by me + Councilors Ferguson, Kelcourse, and McClure.  This measure has been substantially re-drafted by the Planning Board.  The PB re-draft has also been reviewed by Ordinance Committee.  Several additional amendments have also been proposed.  Several moving parts to this important measure but I fully expect a final version to be approved this week, providing a land use/zoning framework to Registered Marijuana Dispensaries in Amesbury.
  
• Medical Marijuana License Measure - sponsored by Councilor Lavoie.  Originally proposed mainly to collect a substantial fee, the need for this was lessened by the recent signing of Host Community Agreements by Mayor Gray with the two companies looking to cultivate in Amesbury. 
• Water Street/Lower Millyard Property Transfers/Easements/Alterations - there are several city-owned parcels in the LMY that will need to be re-arranged somewhat in order to create the new Heritage park and enable the re-alignment of Water Street, etc.  These are all technical issues to clear the way for lots of work anticipated this year down there, including the creation of Heritage Park.

• We have first readings of several new measures:
• New Standards for Tax Incremental Financing (TIF) program -  We received a preview of this earlier this year.  These standards will hopefully help Amesbury with attracting economic development to various parcels around the City, including non-City owned property in the Lower Millyard.  
• Several requests to Surplus City-Owned Property -
• 22 Water Street: salt shed across from the DPW buildings in the Lower Millyard
• Horace Mann School (Congress Street): this one's big, very significant but also comes with lots of risk and questions, which will doubtlessly be pursued in the coming months.  Significant because of historical nature of property and location in the middle of a densely developed (for Amesbury) neighborhood.  Lots that could go wrong with surplussing this property, but lots that could go right, as well.  I'll have a number of questions on this one before I could agree to surplus.
• Carriage Lofts Condominium (Upper Millyard): the 'Cultural Center'/Gallery Space that the City currently owns but only lightly utilizes.  The City has been looking to sell this for sometime and is now proposing to sell it for conversion into two fully accessible living units.  The development proposition on this seems questionable but I look forward to hearing more; everyone agrees that transferring this property off of the City's inventory would be good.

Finally, budget, budget, budget!!  The School Committee approved a budget recommendation for the Mayor last Tuesday (4/1/14).  The Superintendent and the School Committee have been looking at a 'gap' between what it would cost to provide the current 'level of services' to next year's student population.  This gap as been around $300 - 600K.  Principals and Administrators laid out a number of possible reductions, that included:

• Reduction of kindergarten from 'full' day to 1/2 day
• Elimination of HS music/drama position
• Re-organization of Special Education staffing
• Elimination of MS and HS Tech Ed and MS Consumer Science
• Elimination of tuition support for Early College program
• Elimination of HS French

After an intense month of budget workshops and hearing from parents and students, the recommendation that went to the Mayor took kindergarten and HS music/drama off list and re-categorized the SPED re-org (but it will still be taking effect and will change the way that SPED is approached within Amesbury schools).  The rest are still on (bolded above), to the tune of a $458,000 reduction.

From there, the Mayor will take the school budget and combine it with the rest of the City's budgets, for presentation to the Council in early May. 

Medical Marijuana Cultivation Sites - Amesbury Host Agreements

Mayor Ken Gray recently signed community host agreements with both of the companies that have received provisional licenses to cultivate medical marijuana in Amesbury, the Alternative Therapies Group (ATG) and Green Heart Holistic.

Both agreements took up and extended the negotiating framework that Mayor Kezer had started late last year, as his term came to an end.

Mayor Gray forwarded copies of the agreements to the City Council today.

I have posted them here:

• Alternative Therapies Group
• Green Heart Holistic

 The agreements are different in technical terms but appear to be the same in the essentials [caveat: I'm not a lawyer]:

• Both companies agree to make unrestricted contributions of $50,000/year to the City for 5 years
• Both companies agree to make additional contributions to Amesbury charitable organizations of at least $5,000/year
• After 5 years, both companies agree to make unrestricted contributions of $50,000/year, with increases chained to the Consumer Price Index
• No end date, save the point that either business either loses their DPH license or moves out of Amesbury
• Both companies agree to be treated as non-tax exempt entities, for the purposes of local property and personal tax, irregardless of how either the Commonwealth or the local Assessor determines they should be treated (given their Chapter 180 status as exempt organizations)
• Both companies agree that they will not seek DPH licenses to dispense medical marijuana in Amesbury

First, let me saythat I'm pleased that Mayor Gray has continued Mayor Kezer's pragmatic and non-sensational approach to these businesses and their coming to our community.  

Assuming that both ATG and Green Heart's provisional licenses are made permanent by DPH, Amesbury stands to realize at least $100,000 a year in unrestricted income.  When we are talking at the level of individual positions (as I believe we will be in this year's budget), that kind of income from two businesses is significant. 

The tax status provision is also significant.  Opinion on how these businesses will (or won't) be taxed locally has been all over the map.  Our own City Assessor has indicated that, in his opinion, these entities (organized as 'Chapter 180' tax-exempt organizations in MA), would not be subject to local property and personal tax.  The MA Dept. of Revenue has officially taken no position on this.  And former Mayor Kezer and other have not considered them to be tax-exempt.  The tax status provision nails this down and says that these businesses WILL be subject to local property and personal tax.  Practically, this likely doesn't mean TOO much, in terms of tax revenue.  Businesses are only taxed on property if they own it.  Both ATG and Green Heart will be leasing space for operations but they may own their cultivation and fabrication equipment, meaning the latter will now definitely be taxable.  Again, not a ton of money but not nothing.

Not having an effective end date is a double-edged sword.  On the one hand, it guarantees all parties a stable and predictable framework.  Budget Directors like this and businesses like this, as well, in terms of predictable obligations.  On the other hand, there is no room to change the arrangement, if circumstances change (save the narrow escape clauses).

Finally, both companies agree not to pursue licenses to dispense in Amesbury, taking that issue of the table for now, at least as far as these two companies are concerned.  

FY15 School Budget Development Process

The City Council received a presentation tonight from Assistant Superintendent Deirdre Farrell on the development process for the Amesbury Public Schools FY15 budget.

First, some important dates.  The School Committee is finalizing its own FY15 budget recommendation for presentation to Mayor Gray by April 1^st.   

The School Committee’s Finance Committee is meeting every Monday through the rest of the month: 3/10, 3/17, 3/24 and 3/31.

The Finance Committee’s Public Hearing for this first draft of the APS budget is on Tuesday, March 18^th, 7:00 p.m. at the Amesbury High School Library.

The Mayor will then take that budget and include as part of the overall City budget for presentation to the City Council in May.  The Mayor’s draft may or may not be the same as the School Committee’s draft presented at the end of March.

Ms. Farrell’s presentation to the Council can be found HERE.

The focus was on explaining how the APS administrations derives a baseline ‘level services’ budget from year to year, as a starting point for the budget.  ‘Level services’ was defined as providing the same level of programs and offerings for students as the prior year.  As we know from our experience last year, even maintaining this baseline level can be a financial and planning challenge.

And ‘leveling’ APS services does not mean ‘level funding’, primarily because the student body in our schools year to year is a very dynamic and changing population.  Each year, an entire cohort matriculates out and during the school year itself, students move in and out of the community, as families relocate and make educational choices for their children.  You have shifting populations across 12+ grades, at 4+ sites, with shifting needs.  You have tens of types of SPED needs – all requiring unique and heterogeneous interventions – for students spread across all grades and locations, in an ever-shifting configuration.   

To construct a picture of the system’s needs the school goes through a series of steps, as outlined in the presentation:

• Reviewing enrollment projections (including SPED and other needs
• Reviewing structural requirements (state and federal mandates, contracts, educational standards and guidelines)
• Align staffing needs with enrollment and requirements (who/where/why)
• Evaluate administrative and support staff needs
• Assess facility and operational expenses, and, finally,
• Review Elective Opportunities

That process would yield a baseline expense picture.

Looking at revenues, there are several variables, all but the local contribution out of the City’s control.  You can read more about the APS revenue sources in THIS document.

• State Chapter 70 aid
• Choice-in tuitions
• South Hampton tuitions (High School)
• Special Ed Circuit Breaker contribution from Commonwealth
• Fees (sports, transportation)
• Grants

Budget drivers:

• Health insurance (good news, we’ve kept costs very low in recent years)
• Contracts 
• SPED costs
• Transportation

Finally, in terms of our local appropriation, we once again face a year where Proposition 2 ½ will limit our budget growth to about $800,000.  You might recall that we were unable to meet the ‘level services’ budget proposed by the School Committee last year, because of still-low tax base value growth.  

BOTTOM LINE: this year’s school budget will likely be as challenging, if not more so, than last year’s.  Same budget drivers, same revenue limitations, same Prop 2 ½ cap.  Everyone should stay informed and involved through this process.  Let me know if you have any questions.

Other materials provided to us:

• Summary Recommendations from MA Assoc. of School Superintendents on Chapter 70 Reform (Ms. Farrell was on the Task Force that recently released this report)
•  MA Assoc. of School Superintendents Chapter 70 Report (full)
• APS Tech Infrastructure presentation
• APS Aspen/XS presentation

February 2014 Council Update

With our second meeting (February 11) under our belt, the City Council is getting busy.  Here’s a re-cap of what we have going on and will be working on in the next month.

• Appointed of Robert LaPlante to the Planning Board and Mary Louise Bartley to the District 2 Municipal Council. 

• Issued several new business licenses, including 4 for businesses’ working out of Kitchen Local at Barbara Lorenc’s 14 Cedar Street building. 

• Received several measures from Mayor Gray related to the planned improvement of the Route 150 corridor in Amesbury, from Route 110 to Main Street.  This is a stage in a broader plan for this road that began under Mayor Kezer.  As part of the water improvement bond project approved when I was on the Council in 2008-9, a new water main was laid down Hillside and Sparhawk Streets (Rt. 150).  This phase is a Mass. Highway Department project.  Information about the project can be found HERE.  Here is the description of the project from the Mass. Highway project website:

The purpose of this project is to improve vehicular and pedestrian safety and improve vehicular capacity and traffic operations within the project limits. The portion of Route 150 included in the project limits includes a section of Hillside Avenue and Sparhawk Street from Route 110 to School Street. Greenleaf Street is also included from Sparhawk Street to Friend Street, and Highland Street from Hillside Avenue to Locust Street.

The Council has been asked to approve plans to make alterations to the layouts of Hillside, Sparhawk and Greenleaf Streets.  We have also been asked to appropriate $413,758 “in order to acquire the fee interests and/or permanent and temporary easements in certain parcels of land.”  This includes temporary construction easements (e.g. to have construction equipment with property lines) and permanent easements.  I believe that these funds will be raised by issuing a 20 year bond.  As I currently understand the project (the Mass. Highway project site doesn’t have much detail), the project will involve widening the corridor and improving pedestrian safety (e.g. adding crosswalks).  This project will have a major impact on District 6, during construction and beyond.

Maps and explanations of the project have not been provided to us yet, but I expect that they will be presented by the City at our public hearing on this.

I have scheduled a direct meeting this week with our DPW Director, Rob Desmarais, in order to find out more detail.  I have already received constituent communications with questions and concerns about this project; I will share what I know as I learn more about this project. 

• A few things are popping with the Lower Millyard redevelopment. 

o   The Council got a preview of a request that will come back to us later this Spring, when we will be asked to sub-divide the City-owned property that the Department of Public Works currently occupies.  One of the buildings will be re-purposed for the Carriage Museum.  The building used for repairing and storing vehicles will be torn down and that lot will, in part, be used for the re-alignment of Water Street.  And the property across the street (#22 Water) from the 2 existing buildings will be surplused, for likely sale to a developer.  The question for the City will be how and for what purpose we will surplus the #22 Water Street property.  We can sell the property to a developer with conditions that it be developed along specific lines (e.g. residential, commercial, retail, mixed use) or leased to a developer for a particular purpose.  Mass. Development funded a market conditions study conducted last year by a consultant to help the City assess its options.  The study looked at condo and commercial market conditions both downtown and in Amesbury overall and provides some good context for thinking about this property and general market.  You can read the study HERE. 

o   HERE is a link to a Mass. Development overview of the LMY project.

o   HERE is a link to a great set of graphics that visually indicates the where & what of this project, using photos of current conditions.  This was provided to the Council at my request, as part of the presentation on the Water Street properties.

• The Council has several workshops scheduled, including:

o   February 25, with Fire Chief Brickett, focusing on an overview and update of the Fire Department Headquarters improvements.

o   March 5, with School Superintendent Michelle Robinson and Ass’t Superintendent Deirdre Farrell, giving an overview of the School budget, including Chapter 70 funding from the Commonwealth.

• Finally, we have two medical marijuana measures working their way through various committees.  I will save those updates for their own blog post.