1. Manchester Essex Regional School District Budget Workshop January 19, 2010

2. Our FY11 Fiscal Challenge Increased costs of doing business – Health insurance – Increased special education out of district costs – Increased student enrollment – Negotiated salary increases – Utilities for larger building (2times square footage) It costs more to deliver the same educational services as we did last year

3. Financial Trend: Escalating Costs & Declining State Aid *State Aid = MERSD’s Chapter 70 and Regional Transportation Revenue Mandated spending, contractual obligations driving annual budget increases State funding cuts reflect deteriorating economy

4. Special Education Costs Outpacing Reimbursements *FY-10 Budget included DESE’s original Circuit Breaker reimbursement estimate of $441K and operating expenses of $990K. **FY-10 Forecast includes revised DESE Circuit Breaker reimbursement estimate of $237K and operating expense of $1.28 million

5. The Dilemma FY 11 Level Service Operating Budget - $20,765,538 – $1,871,134 (9.9 %) increase over FY 10 – Over 12% increase to town assessments Recognizing towns’ funding constraints while holding onto district goal to maintain educational program, district has worked to target reductions Reductions needed to reach – 5.0%$1,228,200 – 4.5%$1,308,899 – 4.0%$1,389,598 – 3.5%$1,470,297 – 3.0%$1,550,996

6. Working towards the Solution Use additional reserves$567,500 – School Choice, E&D, Stabilization Reduce salaries$386,000 – Eliminate/combine positions Reduce expenses$265,000 – Reduce instructional supply, curriculum, professional development and technology budgets Increase revenues$171,500 – New/increase fees for athletics, busing, student parking; additional School Choice students Total Savings$1,390,000 – 4%

7. Beyond the 4% Reduction A reduction to 3% means an additional $160,000 beyond the $1.4 million in cuts identified Additional cuts will mean critical losses to educational programs Items under consideration include: – Reducing kindergarten to half day for all (eliminate full day) – Restructuring/eliminating elementary specialists (possible 4.5 days per week model) – Concessions (salary, health insurance, etc.) from administrators, support staff and META* *Subject to negotiations

8. Kindergarten Options Current Full-Day Kindergarten (FDK) Program: – Puts all students on trajectory to continue MERSD’s tradition of academic excellence – Estimated program cost: $370K Budget Option 1: Introduce tuition for current full-day program. – Benefits: retain academic rigor and subsidize investment in program which currently exceeds State/Federal guidelines – Drawbacks: Additional ½ day option needed for families choosing not to pay tuition for FDK 50% avg. sign up rate in MA for tuition K, suggests wider range of student readiness for 1 st grade – Potential incremental revenue: $140K Budget Option 2: Eliminate FDK, return to Half Day Model – Benefits: similar savings with consistency of academic program across grade level – Drawbacks: major set back to MERSD’s academic preparedness strategy – Potential savings: $160K Administration Recommendation – Retain FDK, and seek savings with lesser impact to academic program – Rationale: benefits of modifications likely outweighed by significant impact to student readiness

9. Reallocation of Administrative Resources 2010-2011 High School – Principal Jim Lee, Assistant Principal Paul Murphy Middle School – Principal Beth Raucci (with support from Paul Murphy) Memorial School – Principal Beth Raucci (with support from Jen Roberts and Scott Morrison) Essex Elementary School – Principal Jen Roberts Director of Curriculum and Instruction – Scott Morrison

10. Roles and Responsibilities Middle School Principal – Beth Raucci – Office located at Middle School – Primary contact for Students, Staff, and Parents – Instructional Leader/Middle School Philosophy Support to Middle School Principal – Paul Murphy/Middle School Team Leaders Serve in Assistant Principal role at MS/HS Supervision in hallways/dining hall Team Leader concept model

11. Roles and Responsibilities Memorial School Principal – Beth Raucci – Primary office located at Memorial School – Primary contact for Students, Staff, and Parents – Instructional Leader Support to Memorial School Principal- Scott Morrison and Jen Roberts Assist with observations/evaluations of staff Provide support to on-site teacher “substitute principals” in Principal’s absence

12. Plan Designed to Foster Schools/District Goals School/District Climate Task Force K-8 Vertical and Horizontal Articulation Literacy and Science K-8 School Improvement Plan Goals Middle School Initiatives Memorial School Initiatives Parent Involvement – School Improvement Councils, PTO’s, etc.

13. Conclusion Current status at 4% reduction represents considerable loss to schools with the $1.4 million cut Administration strongly recommends to School Committee not to go beyond 4% at this time - talks with towns and Association ongoing - further cuts, if needed, would significantly impact quality of school district Beyond addressing the significant gap this year, need to look at multi-year strategy for cost containment while continuing to maintain quality of academic program