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MARS Board Meeting Minutes
Massachusetts Association of Regional Schools Board of Directors and Membership Meeting February 10, 2009 Minutes
1. Welcome and Introductions—sign in sheet Members completed the sign in sheet and the sign in sheet is attached to the official minutes. The Executive Director indicated to the membership that packets for the meeting are available at the front door to the meeting room. 2. Approve Minutes of January 6,2009, 2008 A motion was made by Bruce Kaiser and 2nd Mindy Kemper to approve the minutes of Jan 6,2009. It was so voted. 3. Presentation by Roger Hatch and David Bunker a. House 1 b. Chapter 70 Funding c. Transportation Reimbursement
Maureen Marshall introduced Roger Hatch from DESE. Roger has been a friend of MARS and always very helpful to us. We thank him for coming today to present the House 1 budget as it pertains to schools.
Roger made a presentation that addressed state funding for both FY09 and FY10. FY09 sees cuts to city and town assistance and lottery but Chapter 70 is unscathed.
FY10’s House 1 budget is the first time Chapter 70 was level funded at this point in the budget process. FY10’s Preliminary Chapter 70 is level funded for all municipalities and regional school districts. The formula caps the Foundation Budget’s inflation factor @ 4.5%, which is allowed by Massachusetts General Law (MGL). This budget continues progress toward more equitable local contributions. Under the House 1 Foundation Budget calculations, 153 districts fall short of Foundation Budget by a total of $168m.
The inflation factor is a significant variable in the calculation. By law, the 3rd quarter’s State & Local Government inflation rate is used to calculate next year’s Chapter 70. The inflation rate went up by 6.75%, but the law does provide for a cap on the rate at 4.5%. The calculation continues work on Minimum Local Contribution (MLC) side. Since FY93 – the “Goal” – was get to and stay at Foundation Budget; however 153 districts will fall short and as Roger puts it, “this is not what the formula is all about”.
In order to bring those districts to Foundation Budget – the state would have to cut other districts and there is just not enough funding to do so. There is hope from Federal Government with the stimulus package, but “we are all waiting”.
NUTS & BOLTS of Chapter 70: The Foundation Budget, with updating enrollments and inflation being capped at 4.5%, v 6.75%, is still going up. Target local share is continuing to go up by aggregate property valuation and income, which has a huge impact on MLC calculation.
The Foundation Budget is then apportioned to all districts that a city or town belongs to: local schools, academic regions, vocational districts and sometimes, agricultural districts.
Chapter 70 Aid calculations normally rely on target share = 100% minus target local share, but with level funding, it is not calculated in FY10.
State & Local Government Inflation went from 6.75% in 3rd qtr to 3.02% in 4th qtr –as stated before, the law uses the 3rd qtr inflation rate in the Ch70 formula – temptation is to use 3.02% (giving those districts a chance to meet Foundation Budget) – but the state must follow law and, in turn, has implemented the cap. The cap may be a good measure of actual inflation.
Of the 351 cities, towns and regional school districts, 200 are within 1% of last years target share.
Determining MLC: The House 1 budget reflects an increase last year’s revenue calculation by the municipal revenue growth factor to yield the Preliminary Contribution. For those municipalities ABOVE their target, MLC is reduced by 25% of the excess gap.
For those municipalities BELOW their target by less than 5% - the Preliminary Contribution becomes the new requirement.
For those communities BELOW their target by more than 10%, an additional 2% is added to the Preliminary Contribution.
For those communities between 5-10%, an additional 1% is added to the Preliminary Contribution.
For communities who actually are spending in excess of their requirement, but whose MLC are below their target contribution (121 municipalities), an additional, one-time increment is added to reach the lesser of their target share or 95% FY08’s actual local contributions.
Determining MLC: Each city, town or regional school district’s Net School Spending in FY08 was looked at from Schedule 2 of the End of Year Pupil and Financial Report (EOYR) for amount over MLC and the formula uses 95% of this figure. Why at the 95% level? To use 100%, in an era of cuts may be unreasonable. Some districts may cut spending and go back to FY08 levels, using 95% allows for a “cushion” in the next budget year.
Steve Hemman asked if increase in MLC “protects” that amount of budget over Minimum Net School Spending (MNSS) which is needed to operate the district.
Some pitfalls of this has been some shifting between all districts that a municipality belongs to: academic v vocational regions v local districts. So you need to be aware that all districts will “share” in the increased MLC.
Comparing FY07, 08, 09 & 10 with MLC as a % of total Foundation Budget indicates that “progress’ is being made.
All municipalities are guaranteed at least 17.5% in aid in the formula.
IN FY03, when Foundation Budget was first calculated, some communities were “where they were” and that has affected them going forward in the calculations. However, there is progress being made in FY10 with a reduction to those municipalities over Foundation Budget and gaining MLC to get others closer to target.
NSS requirements are becoming scrutinized with a total of $1.3b more being spent than is required to spend. So, the additional $1m that has been added to MLC this year is “small potatoes” in comparison.
For those looking at cuts, NSS obligations remain in effect. That protects those districts from huge cuts because a district cannot cut below NSS, which is 10% below Foundation Budget.
David Bunker was introduced to the Membership. He is the CFO at the Executive Office of Education. Previously he was a State Rep and most recently worked in the office of the House Ways and Means Committee. David stated that the language of Chapter 70 may be difficult to read. To keep those districts at Foundation Budget, there may have been 30-40% cuts in other non-educational areas of the budget. 20% cuts on top of FY04’s 20% cuts would be difficult to take. The first 7 years of Ed Reform, the language was easier to put into practice; now results are all over the place when we talk of equity.
Level funding is not ideal by a constitutional standpoint or court case standpoint, but was not a bad place to add up. He’s still hoping for federal stimulus funding. Are there Title I restrictions? – very much up in the air – but there may be more flexibility.
Secretary Reville is meeting to learn what should be done with federal stimulus funding. The primary area will be to get districts back to Foundation Budget. However, there may no be distinction between K-12 and Higher Education funding, since there will be flexibility at the state level to use federal “education dollars” in total.
The current Senate cuts are not well received – may need to go to conference hopefully to be resolved by end of week
Steve Hemman asked, how much was the Governor hoping for in Federal funding in his House 1 budget? Just in Medicaid funding.
House language – only use funding to restore to FY08 levels – now with level funding that can’t be done.
Steve Hemman asked, will less Federal funding have an impact on the next round from House/Senate?
Dr. Marshall asked if it can be recommended to Superintendents to bank on level funding to calculate assessments to member towns. Politically, it is tough for them to go and do that now, especially if revenue picture goes down - that may be tough for them to play with.
Dave’s response - In 04, Romney did something crazy and hard for people to understand.
Steve Hemman asked, if in March and April the state revenue goes down – may Chapter 70 be cut across the board? Dave feels more comfortable that level funding will stay than cuts will be made, stating that the stimulus package is postponing other decisions from being made at this time.
No supplanting language – may be a discussion – may be able to use Title I funding to fill Chapter 70 gaps.
Senate cuts in physical plant maintenance - funding is entirely gone in the Senate bill.
Dave will give out progress reports as we proceed and Steve will forward them on to MARS members.
DAVE TOBIN commented that once MLC comes out – it should be set. Districts set assessments based on this. He asked Dave Bunker, his thought is these MLC are set – we can all understand that Chapter 70 may decrease but is there stability in the MLC levels.
Dave Bunker – relevant to say that the challenge that led us to this would have come even without the current fiscal crisis - some due to inflation, some due to enrollment some due to equity. There are communities under target by $480m. Compromising the formula was a structural problem and increasing MLC was one way to get to equity. The longer it will take to get to equity, the longer it will take to address adequacy issue. There is a need to increase the Foundation Budget.
Proposition 2 ½ limits some abilities to make target. It takes $400m to get to equity and the state needs to get here first.
Audience questions:
When will we know more? House figures should be out by last week of April or 1st week in May, usually come out the Wednesday before school vacation. Then to the Senate Friday of vacation week Senate figures come out by ??
Question: Is it a safe assumption that House 1 is fairly accurate to go with? There is some interest in legislature to keep level funding. MLC is tougher with new piece. There may be municipal push back – tough to call if those will remain at House 1 level.
Dr. Marshall stated that member towns are looking for us to “back into” what they can afford and it has nothing to do with MLC. Regardless of the funding we have today , towns are looking for level funding – there will be pushback.
Steve Hemman reported that Jay Sullivan stated that transportation reimbursement is expected to be 80% for this year, FY08 was 85%, FY10 should be 70% of this year’s expenses. The total appropriation is down $8-9m.
Question: does the % reimbursement take into account for new contract prices. Jay uses FY08 expenditures so if you have contract increases in FY09, you can plan for that because is won’t be on cherry sheet. The Cherry Sheet number will be adjusted by the actual expenditures reported on the FY09 EOYR. The calculation did not apply any inflation rate.
Circuit Breaker reimbursement will be down to 70% for FY10.
The Executive Director provided the Membership with an example of the change in the required local contribution as it affects those districts who spend above the NSS. He gave Narragansett as an example.
4. Legal services--update The Executive Director informed the Membership that Mike Long will be our MARS’s legal counsel. He will be paid a the his hourly rate when we need legal services. He is also counsel for MASS. 5. Meetings: a. Board of Education-meeting on Jan 27,09 The majority of the Board’s meeting was concerned with Charter Schools. They approved the charters renewals and revoked one school’s charter. The agenda and Board in Brief is on the DESE website. 6. Supervisory Unions—membership within MARS? The Executive Director wanted to make sure that Supervisory Unions are also considered to be members of MARS. The Association affirmed that they can be members. 7. Standing Committees a. Laws and Regulations 1. Discussion with Joe Giannino—Legislative consultant 2. Meeting of Standing Committee 3. Proposed amendments to regional school district budgets Joe Giannino was introduced to the Membership as our legislative consultant. Joe spoke to the Membership concerning the services he will provide. He will search new proposed legislation database using key words that apply to MARS. He will then provide the Laws and Regulation Standing Committee with reports and details about the legislation. Reports will be made to the Association on those proposed laws with recommendation on how to proceed.
The Laws and Regulation Standing Committee will be meeting Feb 23.
The Proposed regulation change concerning regional school budgets was presented to the Members. MARS will be writing a letter in support of this change.
b Insurances—Health and General Insurance. This committee will be meeting in the next couple of weeks. c. Budget 1. 9c Cuts-2009 2. Strategies for FY2010
Written information was provided to the membership in the packets.
d. Grants 1. George Ladd—guest at March 10, 2009 meeting e. Professional Development 1. Program for new Superintendents The Standing Committee is meeting after our monthly meeting and is developing a program for new superintendents. The goal will be to have a 10 hour program for new superintendents and central staff next year so the MARS can become a PDP provider.
f. School Building---MSBA 1. Jan 28, 09 meeting 2. Letter concerning Federal Funding In the packet were the agenda and actions by the MSBA at their meeting. The Executive Director will try to set up a time for MSBA personnel to meet with our membership to discuss the process to follow after an SOI is submitted and accepted.
g. Regionalization 1. Survey on Governance and Finances 2. J.D. LaRock – meeting on Jan 21, 2009 3. Roundtable meetings by Executive Director
The Standing Committee reported on the meeting with J. D. LeRock on Jan 21, 2009. It went very well and we believe that he clearly understood the concerns we have concerning current governances within regions. We had superintendents from across the state explain how their district is organized. We will be having follow up meetings with him. The Standing Committee will be meeting Feb 26, 2009 at 9:30 am at Nashoba Valley.
The Executive Director passed out a proposal for a MARS banner. Three options were given out. It was decide to ask a vocational school to help in the design. A proposal will be presented at a future meeting.
The meeting adjourned at 12:00 noon.
At 12:45 pm a session was held for new superintendents by the Professional Development Standing Committee. Any member is welcomed to attend.
Special thanks to Cheryl Duval for providing the minutes from Roger Hatch and David Bunker presentation.
Submitted by,
Steve Hemman, Executive Director
Next Meeting: March 10, 2009 10:00 am Assabet
MARS Governmental Relation Group Key Words: 1. Regions 2. Regional 3. Vocational 4. Regional Transportation 5. School Consolidations 6. Assessment Methodology 7. Assessment 8. Regional School Regulation 9. Excess & Deficiency 10. Technical 11. Career 12. CVTE 13. Chapter 70 14. Chapter 71 15. Chapter 74 16. Supervisory Unions 17. School Union 18. Agricultural 19. Agriculture
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