2009-2010 Superintendent’s Budget Presentation for PPSD School Board March 23, 2009

Budget Drivers Student Achievement Available Funding 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

Key Information Student Enrollment External Budget Review 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

Unknowns Final State Aid Allocation Federal Stimulus Funds, American Recovery and Reinvestment Act (ARRA) Final City Appropriation Final Federal Entitlements Unsettled Labor Agreements Final Health Insurance Cost

Overview All budget increases are non-discretionary The Superintendent’s 2009-10 proposed budget is $325,075,600 An increase of $2,952,871* All budget increases are non-discretionary Driven by: Labor agreements Vendor agreements State regulations and laws Enrollment/Facilities * Details on slide 7

Overview Includes a $13.9MM budget gap* Includes level funding for City Aid State Aid is as proposed in Governor’s Budget; $2.2MM reduction, elimination of Permanent School Fund (24/3 gambling revenue) * Details on slide 7

Budget Increase * Reduction also reduced revenue 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

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

Historical Budget Changes

Revenue Estimated Revenue $311,114,138

New Spending Requirements Providence Career and Technical Academy ($450,000) District wide Athletic Complex ($350,000) Nathan Bishop Middle School ($500,000)

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

Expenditures Proposed Expenditures $325,075,600

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

Revenue (millions) Unrestricted State Aid $185.3 City Revenue 120.3 Medicaid 3.8 Other 1.8 Estimated Revenue $311.2

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.

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

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.

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 ordinances