FROM: Dave Tobin, School Finance Consultant



SUBJECT: Review of Seekonk Finances March 5, 2010


I was good to meet with you on Friday. The purpose of my visit was to review fiscal matters related to Seekonk and the affects upon the Seekonk public schools. My excel worksheets are attached.

My major conclusion is that there is a need for much more open communications between the town and the school department relative to the town’s and school’s finances. A greater sense of trust and communications needs to be fostered. A new Superintendent to Massachusetts is seeking that degree of openness and trust.

We reviewed the fiscal situation as viewed by an outside consultant:

1. The town has a structural funding problem that needs to be addressed in an open, honest way.
2. The average single residential property tax bill and tax rate are well below the state average and an override to keep a school open failed.
3. A political problem exists because of the timing of collective bargaining agreements that results in a school district agreement’s last year raise at a time that town units are being held flat. There is a history to both salary histories.
4. School spending as a percentage of total spending has been on steady decline.
1. FY 01 Education is 61% of total town spending
2. FY 08 Education is 48.5% if total town spending see excel worksheets attached.
5. Fixed cost spending reported for town (and schools) has increased dramatically
6. Most town spending has been constrained but remained at the same share of the total over the years while the schools have fallen.
7. Health insurance has been addressed (lead by a school contract) but continues to be a serious drain on resources. Plan design needs to be addressed in a town-wide resolution. Employee unions, administrations, and board. State law changes are needed.

FY11 fiscal plan is conservative, and “prudent” at this stage of the game.

1. Local aid resolution in H-2 is leveled, but it may be cut with legislative action.
2. Estimated local receipts are estimated well below FY09 actual, though that is the year of dramatic decreases.



Questions and practices:

1. The superintendent needs to be informed of any opportunities for correction of funding shortfalls that may be available or considered up to and after the annual town meeting.

i. The November 09 adjustment did not included discussion with the schools which make up near half the budget.

ii. Evidently a correction was allowed for technology in January 2010.



2. Free Cash:

i. What is the March status of free cash account?

ii. What amount is planned for use FY11.

iii. What is the estimated amount of free cash for July 1, 2010

1. Based on spending constraints this year

2. Revenue trends over estimated for FY10

iv. What agreement can there be that free cash will be available for both the schools and town needs after July 1, 2010?

3. Stabilization Account:

i. What is the March amount in the stabilization account?

ii. What amount is planned for use in FY 11?

iii. What portion is planned for school use?

iv. Will there be transfers to this account in FY11 and if so how is that determined?

4. Estimated Receipts:

i. In the difficult year of FY09 estimated receipts were $219 K greater than estimated by the town.

ii. Estimated receipts for FY11 are conservative

1. New Growth at $100 K, excise taxes etc. What is the rational for these lower estimates?

2. Vs State’s estimation of $648,045? In property tax growth?

3. Ask for a review of FY09 actual receipts?

4. How are receipts going in FY10 compared to FY 09.

5. What can be realistically expected in FY11

5. Overlay Reserve:

i. What is the current status of that account?

ii. How is planned use in FY11?

iii. How realistic is the amount be held?

6. A review of school spending NSS

i. FY09 Spending for administration is below the state average

ii. Instruction is slightly below the state average

iii. Review of the memorandum of school and town spending should consider

1. Maintenance charges

2. Insurance charges to school’s personnel / actual

3. Retired employee insurance that is high?

7. State Chapter 70:

i. How can the town and school work with their legislative and state official to get the Chapter 70 revisions back on track the would lower formula requirement for the town and increase state aid (+$2 M since FY05)?

ii. The consultant estimated that $135 K could be cut from FY11 Chapter 70. How will that be addressed?

8. Spending per pupil: Seekonk school’s are performing above the state average. The state is performing at the top in the country in English and math. Why is Seekonk spending below the state average in administration, instructional leadership, instruction, etc.?

9. Low Income Students: How can Seekonk identify more low-income students, and get more aid for servicing them? (Talk with Tri-County).

10. Aggregate wealth: Seekonk is stronger on property value than income compared to the state. RI un-employment rate is affecting Seekonk resident’s income.

Seekonk FY10 Tax Recapitulation Form



FY 10 Tax Rates Rates Amount Raised % of Total Raised

Residential
$10.57 $17.367 M
59.2% 40.4%

Commercial/Other.
$21.57 $11.961 M
41.8% 27.8%

To be Raised by Tax
$29.329 M



Other Revenue
$13.628 M
32.8%



Total to be Raised
$42.957 M
100%



Cherry Sheet Charges & Abates
$466 K



Gross Total to be Raised
$42.957 M


Cherry Sheet FY 10 Receipts
$ 7.148 M



Local Receipts $ 3.038 M
Enterprise Funds $ 1.265 M

Total $4.521 M



Other

Free Cash $1.448 M
Other Available $ 512 K
Total $1,960 M



Total Estimated Receipts $13.628 M



Local Revenues

FY 2009 $ 3.365 M

FY 2010 $ 3.038 M $327 K less





Appropriations from Free Cash

May 12 $250K for What?

July 1, 2009 Free Cash Certified $ 1,324,386



November 30 for FY10 Appropriations from Free Cash

1. FY10 Debt service expenses $ 234,569
2. Police Tasers $19,180
3. Communications $19,838
4. Payroll funding Police/Fire help $18,200
5. Digital Zoning map $6,000
6. Stabilization $500,000

Total from Free Cash FY10 $797,787

Remaining Free Cash 11/30 $526,599 ?

Overlay Reserve $274K



Excluded Debt $ 1.442