MEMBERS PRESENT:

MEMBERS ABSENT:

Council President Higgins explained that it is customary at this meeting to introduce the members and asked the Chair of the School Committee, Donald Costa to introduce his Committee.  Mr. Costa introduced all his members with the exception of Daniel Pedro who was absent as well as the School Superintedent, Donna Morrelle and School Business Manager, Alex Prignano.  Council President Higgins in turn introduced each of the Council members as well as the Finance Director, Thomas Bruce. 

Councilor Kirkpatrick began by stating that it would be a nice bridge from last year to this year if Donna Morelle could continue their change in conversation where they talked about performance and proficiency by updating them on a couple of items that they had talked about and subsequently implemented in the district, one being Ainsweb and Connect-Ed.

Dr. Morrelle agreed that they did change the conversation last year and she hopes that in the midst of what is a difficult budget conversation this year and is certainly compounded by the Governor’s recommendations for the supplemental budget last week that they can maintain a focus on student learning.  She stated that she was very proud to participate in that conversation last year and was very grateful on behalf of the School Department to accept the appropriation that they designed which was on the School Improvement Fund line item.  She explained that more specifically they agreed that would be for the acquisition of two line items which were a communication system that would benefit the families in the school system through the Connect-Ed System.  She added that they have had it up and running since the first of December and it has been very effective.  She pointed out that now it even layers on top of other communications which includes their news letter and other emergency communications systems that are in place statewide like the Rhode Island broadcasters system that ties into the media.  She mentioned that just that morning Channel 10 News did not announce their one hour delay until 8 o’clock in the morning so it was a good thing that they had this other mechanism and in the next week or two they will have their employees on the system also.  Dr. Morelle continued by explaining that the second part of their conversation which was tied to helping them better understand the progress that their students are making towards mastery was the purchase of the Ainsweb Assessment System.  She stated that they met with the people from the Dunn Institute which are their partner agency that are helping them train and implement the elementary facility in the district and transition their reading specialists to literacy coaches which have completed the fall bench marks for all of the elementary students and they are working on analyzing those bench mark assessments right now.  She also stated that now across the entire district about 30 percent of all elementary students have not yet met targets in oral fluency but on the flip side of that 70 percent of their students have met those oral fluency targets.  She added that there is a high predictive quality in that assessment to reading comprehension in the upper grades and they are now working on providing professional development to elementary teachers in areas that will help them better plan instructions in the classrooms and they are planning interventions.  She pointed out that they have also done some professional development associated with the specific next steps that classroom teachers and reading teachers need to provide in the classroom as a result in having that very discrete information about the students in the district.  She concluded that both of those decisions that they made as a result of the conversations they had last year around what would have been budgetary discussions have translated into a much more robust and much stronger school system.

Councilor Kirkpatrick asked the Finance Director, Thomas Bruce if there is anything he would like to add at that time. 

Mr. Bruce noted that in regards to the Governor’s reductions they need to continue to be aware that the impact is going to spill over to next year’s fiscal year 2010.  He stated that any point tonight he could review what the percent increases are associated with both the local and the state tax cap.  He mentioned that he had sent out with the agenda a debt service schedule which shows an increase in the current year budget where they built the proposed tax levy for the upcoming May tax bill at the maximum percentage cap on the local ordinance of 3.5 percent and they also added the debt increase from 2008 to 2009 which was approximately $600,000.  He wanted everyone to be aware that next year that number will be $400,000 because it does come into play policy wise if the Council was to consider it. 

Councilor Kirkpatrick asked if it is correct that they are looking at a $1.1 million deficit. 

Mr. Bruce replied that $1.1 of general revenue sharing has been eliminated for the Town. 

Pre-Budget Consultations and three year forecasting pursuant to the requirements of RIGL 16-2-21 through 16-2-21.3

Mr. Prignano explained that the format of the projected fiscal year 2010 – 2011 appropriation is the same format that they have used for the last couple years.  He further explained that the first page of the report gives them revenue projections for the next two years out and also includes a similar report that they give the Council on a monthly basis, by departmental levels.  He added that the end of the report is where the bulk is they will see that their revenues from the projections $52,419,112 is the budget this year, then they will see their projections where in 2010 and 2011 and then the appropriation numbers down below.  He explained that this shows what there gaps will be in the next three years.  He also pointed out that even though they were extremely grateful for the additional $600,000 they received from the Town last year they still had a budget gap that they had to work off and they were forced to use some one time items in their budget last year.  He pointed out that they did something with their school bus contract, they negotiated some up front savings in that two year renewal for about $200,000 and they were also able to receive the credit on tuition of about $284,000 and unfortunately they were forced to take $508,000 of their undesignated fund balance to put into the budget as a one time revenue source.  Mr. Prignano stated that those items totaled $1,041,000 and if they weren’t forced to use it that one time their gap would be more like $2.3 million but it is the $3.4 million dollars instead.  He also mentioned that this report shows that assumed no master lease in 2010 and 2011 budgets because as they know last year when they put a master lease together to buy one of the Council asked them if there were anything else in their budget that they could possibly put into a master lease.  He explained that they put in some of their capital repairs so some of those dollars were spent but in fact he guesses that the Town has decided they will not be going forward with the master lease this year so the $380,000 that they had for capital items.

Dr. Morelle interjected to ask Mr. Bruce if that had been confirmed.

Mr. Bruce replied that it was discontinued in terms of two months ago but he knows that the Mayor intended to re-visit it if possible. 

Dr. Morelle stated that they probably should have mentioned this under the current year budget because that is going to cause another issue for them because that was their solution last year.

Mr. Prignano added that they have probably have already spent less than $100,000 of that $380,000 because once they discovered the Town wasn’t sure they were going to go forward with one they held back.  He stated that once again it becomes an issue of more things that they are just no going to buy that were in the budget.  He mentioned that they do have some proceeds left over from 2007-2008 master lease which he has been working with Mr. Bruce on that. 

Councilor Kirkpatrick stated that as a member of the Finance Sub-Committee last year acknowledged that there was a commitment for that master lease and he believes that they need to have more discussions on that. 

Dr. Morelle stated that they understand the Town’s financial position and this meeting is reinforcing that they understand their position but it is unfortunate that externally that some of things that have been studied can’t be implemented because when they look at the numbers that were presented this evening, if the funding formula the State has looked at which has been very clear that Cumberland would receive up to an additional $4 million was in place that it would be a cost neutral solution.  She pointed out that if they could look at their projections and say that they are right in the game but the point is they aren’t really being funded.  She concluded that an important point made tonight that really shouldn’t be lost on any of them is that they are going to be taken down a path where they are going to be mandated to participate in programs in the future that may or may not be cost beneficial to the district which has to be watched very carefully.       

The School Department’s plans and/or projections for capital improvement projects for the next five years and what effect these needs will have on the Town's debt service and the Town's ability to seek additional bond approval.

Mr. Wood explained that the Property Sub-Committee met prior to this meeting to discuss the five year asset protection plan of their schools and they are currently in the process of prioritizing the needs and putting numbers to them.  He concluded that it is still a working document and the process should be completed by February. 

Council President Higgins asked Mr. Wood if he could please stay in touch with Councilor Kirkpatrick, the Finance Sub-Committee Chair because it is obviously going to be part of their budget and he would like the Finance Sub-Committee to know what is happening as soon as possible.

Councilor Kirkpatrick asked Mr. Bruce if it was possible to send Mr. Wood a copy of the debt service document.

Town Sergeant distributed a copy of the debt service report to each member of the School Committee.

Councilor Kirkpatrick continued to explain that he would like the School Committee to have a copy of their debt service schedule because this will give them an overview of what the Town is currently committed to in debt service through the year 2014.  He also added that their debt service from last year to this year has increased significantly because starting in 2009 they start repay on the $30 million dollar bond so they are looking at going from $3.7 million last year to just over $5 million this year and then it increases to $5.4 and $5.6 in the next two years which is something they are going to want to consider. 

Council President Higgins asked if that assumed the current interest rates and if so, are those variable rates?  

Mr. Bruce replied yes but three months out they can’t really predict what they rates are but right now they are about 4 to 5.  He stressed that the critical objective for the Town is to retain the A3 bond rating but in May when they sold the high school bond for the first time our Town was characterized as a community having a relatively wealthy tax base we do now have an above average debt burden. 

Status of the current fiscal year budget

Dr. Morelle distributed an analysis that they received regarding the Governor’s budget recommendations.  She wanted the record to state that all of the numbers they discuss tonight in reference to any aspect of the Governor’s recommendations for the supplemental budget are their best understanding as of today.  She also stated that the way they have created any figures that they represent are either through their own analysis in the business office or through consultation with the people in the Finance Office at the Department of Education. 

Alex Prignano, the Business Manager for the School Department, reviewed the layout of the analysis.  He explained that the first part is what the State of Rhode Island is going to save with the actions they have taken with the Cumberland School Department.  He pointed out that they have eliminated professional development funds.  He explained that unlike other State aid, most state aid they receive 2.5 percent of it in July, 2 percent in August and then 9 percent the other 10 months of the year.  He further explained that the professional development is different because they receive them all in April and they haven’t received them for the year so the full amount of the $199,527 will not be coming to them this year.  He added that they expected that money and it has been the same amount for the last 5 years so they have been using professional development money through the year and the were also had been paying some of the Dunn program out of that fund.  He mentioned that the permanent improvement fund for the period from December through June $82,836 which they won’t be paying to them.  He pointed out that they reduced their state aid by $1,112,000 for a net savings to the State of $1,394,976 but the school department’s budget ramifications are different.  He stated that with the first item, professional development, they are going to have to make that up so that there is a $200,000 area of concern but in regards to the next piece they have permanent improvement fund at $200,000 because their original budget was put together with the estimate of $261,000 that they would receive of which they have received $60,000 so far but they are still going to be short that $200,000 in their budget.  He also stated that in the last item under State aid reduction offset with pension contributions he has taken out $1,112,000 and made it $0 because what they are going to does is allow them to reduce the pension payments to the pension fund beginning February 1^st on by 75 percent so they would only pay in 25 percent and the 75 percent will go to offset that State aid reduction. 

Council President Higgins asked what the permanent improvement fund is for.

Mr. Prignano explained that what they did was when there was discussion of creating this fund there were estimates based on Twin River being open 24 hours a day and there was uncertainty with the number but they did budget the full amount.  He further explained that what they did was they tried to identify as many discretionary items in their budget as possible and they reserved those dollars which they wouldn’t spend until that money had come in.  He added that as that money was coming in they would meet to discuss what they would spend that money on and to date the only item that they proceeded on was added a building secretary, which was needed at the middle schools.  He clarified that even though he shows the permanent improvement fund as being part of a $400,000 issue as long as they didn’t go forward with the items listed they would have that $200,000 concern.  He stated that because they are allowing them to not make the pension payments the only real problem with their budget is the elimination of the professional development and the ability now for them to do some of those items listed under the permanent improvements.  He concluded that the big concern will be next year. 

Councilor Morris questioned if professional development is required by state law and/or union contract.  

Dr. Morelle replied that some of it is discretionary and some of it is in support in major educational reforms such as the diploma system and some of it is contractual such as the Dunn Institute and the Hanson initiative which extend through out this year.  She mentioned that there are some funds at this point that they are going to have figure out how to compensate for.  She added that she can understand taking funds from people prospectively but to cut from your budget in a retrospective from funds that have already been allocated so she isn’t sure that the Governor understands that this money may have already been spent.  She explained that one of the explanations she heard was that with the money coming in the spring it had something to do with plans that were approved in the spring but the truth of the matter is the plans were approved last spring for expenditure this year and the payment comes next spring so the timing and the sequence of this is really off, which is really concerning to her right now.                        

Council President Higgins stated that this is all subject to General Assembly approval so he questioned if there is any kind of organized effort on behalf of the Superintendent’s Association to have people appear and explain some of these issues.

Dr. Morelle stated that right now they have been communicating through their executive director and they do have a lobbying group so her understanding that all the lobbying is happening through that group but so far there haven’t been any hearings and no public testimonies are being taken.

Council President Higgins questioned the issue of not having to make the pension contributions and where are they going to make that money up. 

Councilor Kirkpatrick replied that is a pay now or pay later situation.

Dr. Morelle stated that the only concern they have around the April 1^st deadline and the whole change around the pension guidelines is that they have analyzed their facility and they estimate that they have a minimum of 25 employees at risk of retiring March 31^st which is a significant shift in the teaching staff.  She explained that they are already making plans for how to address that and she believes that the Retirement Board believes this has legs because they are scheduled to come in sometime in February to do a presentation and bring paperwork for the teachers to make this a smoother process as possible.

Mr. Prignano explained that by going to April 1^st the Governor reduce his pension exposure on those people because they wouldn’t get a full year pension credit for those who will retire this year because they will be four days short of having the days needed to get credit for the full year which he is sure is part of his pension savings going forward. 

ADJOURNMENT

MOTION BY COUNCILOR KIRKPATRICK, SECONDED BY COUNCILOR LEMOIS AND IT IS UNANIMOUSLY VOTED TO ADJOURN AT 7:49PM.  VOTE 7/0.

                                                                        ______________________________________

                                                                        Sandra M. Giovanelli, Town Clerk