Rochester City School District

FY 2011-12 Proposed Budget

BENTE/AFSCME Analysis – April 5, 2011

Additional Financial Flexibility/Revenue

 Additional State Aid: New York’s Governor and Legislature have agreed to a state
budget that restores $3.5 million in aid to the District above what was projected in the
Proposed Budget. Superintendent Jean-Claude Brizard says he expects to use the funds
to prevent some of the 900 planned job cuts, but has not released details on what
proposed cuts will be prevented. How is the 3.5 million dollars that has been restored
going to be allocated?

 Proposed Budget Reserve: The Proposed Budget’s $80 million deficit includes an $8.1
million “Budget Reserve.” This is unnecessary and has the effect of exaggerating the
deficit.

 Fund Balance: The budget states that the fund balance is “below acceptable risk levels”
and cannot be used to meet future deficits. According to the Proposed Budget, the
District will end FY 2010-11 with $43.4 million in unreserved fund balance, including
both designated and undesignated funds, which is equivalent to 6.4 percent of the fiscal
year 2011-12 proposed expenditures. The District could spend approximately $15
million of its unreserved fund balance and still retain a fund balance by FY 2011-12 year-
end of 4 percent of adjusted total expenditures. There is reference to a New York State
law that appears to set a maximum cap of four percent on school districts’ fund
balances.

$15 Million of Unreserved Fund Balance Available in FY 2011-12

$ Millions
FY 2010-11 Year-End Unreserved Fund Balance $43.4
Proposed Budget FY 2011-12 Total Expenditures 677.7
Unreserved Fund Balance % of FY 2011-12 budget 6.40%

Adjustments to FY 2011-12 Total Expenditures:

Additional state aid 3.5
Eliminate Proposed Budget Reserve -8.1
Use of Portion of Unreserved Fund Balance 15.0
Adjusted Total Expenditures FY 2011-12 688.0

Remaining Unreserved Fund Balance Year-End FY 2011-12 28.4

Fund Balance % of Adjusted Total Expenditures 4.13%
Adding $3.5 million in state aid and $14 million in fund balance and subtracting the $8.1 million
“Budget Reserve” still leaves the District a fund balance of over 4%.

TOTAL ADDITIONAL REVENUE: $3.5 (State Aid) + $8.1 (Budget Reserve) + $15 (Portion of
Unreserved Fund Balance) = 26.6 million

Questionable Expenditures

 Cash Capital Expense: The Proposed Budget includes $6.5 million in cash capital
expenses, excluding textbooks, library books, equipment and computer hardware (p. 3-
20). While this expenditure is $1.1 million less than the current year, it still represents a
substantial expenditure of general fund monies in a time of constrained budgets. What
purchases are planned for these expenditures? Can any of these items be deferred, or
can the District borrow for their cost and pay for them over the useful lives of these
capital items?

 Transportation Contract Increases: The Proposed Budget includes a $508,000 (1.2%)

increase for RTS and First Student bus contracts (p. 7-35). Why are these contractors
receiving additional funding while personnel funding is being reduced?

 Foodservice Contract Increase: The Proposed Budget includes a $381,000 (5%) increase
in “Facilities and Related” costs in the Food Service Fund. The explanation is for “Food
Supplies increase” (p. 7-29). The District’s foodservice is operated by Aramark. Is
Aramark receiving an increase in this budget during a time of fiscal stress and
declining enrollment?

 Agency Clerical: The Proposed Budget spends $2 million on long-term temporary labor.
This is a reduction of $423,000 from the current year, but still represents an increase
over FY 2009-10, when $1.86 million was spent in this category.

 The Proposed Budget states that no fund balance will be used in FY 2011-12. However,
the Revenue Summary indicates $2.1 million will be appropriated. Is this related to the
Employment Preparation Education (EPE) reimbursement of about $2 million that the
budget narrative refers to? What is that expense?

Reliability of Estimates

The budget relies on a number of estimates that warrant further examination. For example:

 Current-year revenues and expenditures were last estimated in February. How are the
actual current revenues and expenditures compared to that estimate?
  For the fiscal year 2011-12, pension contributions increase by $4.8 million due to TRS
and ERS rate increases. Are these rate increases final, or estimated?

 The State Retirement Incentive requires payments of $5.8 million. Will the Retirement
Incentive program generate any savings for the District in FY 2011-12?

 Unemployment compensation costs increase $4.3 million because of layoffs. If the $3.5
million in additional state aid (as well as some of our proposed sources of revenue are
enacted) is used to prevent some of the proposed layoffs as the Superintendent has
stated, what savings will flow through to this item?

 Charter School Tuition increases by $6.3 million, or 22 percent, from the current year.
The District projects charter school enrollment growth of 457 students. [There actually
are conflicting cost numbers for this item, between the budget table on page 3-20 and
the narrative on page 3-23. The numbers here are from the table.] What are the
correct numbers, and is this estimate inflated?

 Health insurance costs actually decrease because of a reduction in staff, but increase as
a percent of payroll from 9.7% to 11.65%. The Proposed Budget states that the increase
is due to the Affordable Care Act (ACA, national health care reform). The increase
attributable to ACA, however, is only 1 to 2%. How much of this expense was offset by
a reduction in staff and an increase in new hires paying 15%?

Disproportionate Cuts to Employees

The Proposed Budget meets the $80 million estimated shortfall with $62 million in savings from
reductions in force, or 77.5 percent of the total, compared to just $18 million from changes in
programs. Employee compensation, including benefits, makes up 65.5 percent of total
expenditures. Why are budget cuts focused disproportionately on employees?

The following table shows position cuts for teachers, civil service, administrators, and other
positions.

All Schools Positions FY 2009-10 to FY 2011-12

Actual Amended 2009-2010 2009-2010 Proposed 2011-2012 2011-2012
FY 2009-10 FY 2010-11 # Change % Change FY 2011-12 # Change % Change
Teachers 3,394.9 3,280.5 -114.4 -3.4% 2,735.7 -544.8 -16.6%
Civil Service 696.6 698.2 1.6 0.2% 519.2 -179.0 -25.6%
Administrators 230.4 215.4 -15.0 -6.5% 187.2 -28.2 -13.1%
Teaching Assts 174.0 191.0 17.0 9.8% 100.6 -90.4 -47.3%
Paraprofessionals 531.5 492.8 -38.7 -7.3% 427.8 -65.0 -13.2%
Hourly Teachers 0.0 0.8 0.8 NA 0.0 -0.8 -100.0%
Total 5,027.4 4,878.7 -148.7 -3.0% 3,970.5 -908.2 -18.6%
The table shows Civil Service positions would decline by 179 FTEs, or 25.6%, in the fiscal year
2011-12. Only Teaching Assistants would face a greater percentage reduction (47.3%).

There are 26 additional FTEs in the Proposed Budget not included in the above table. The Board
of Education includes 20 FTEs and the Superintendent’s Office has 2 FTEs. As previously
explained, the bargaining unit that has been hit the hardest in the past three years is BENTE,
decreasing by 7%, while ASAR has increased 3%, SEG has increased 2%, the Board of Ed
employees has increased 10%, and RAP has increased 2%.

We are scheduled to meet on Friday, April 8th to discuss the budget. Two months ago, we
submitted a list of questions that have yet to be answered. As requested, we are submitting an
additional list of questions in advance of our meeting on Friday, so that the District can be
better prepared.

It is our hope that Friday will be a productive session.

Respectfully Submitted,

Daniel DiClemente, President, BENTE/AFSCME Local 2419

Question asked via e-mail on March 30, 2011: Please submit a list of all positions (not the
names of the individuals affected which would require help from Civil Service) that are being
eliminated from the BENTE bargaining unit by title, location, and whether or not the position is
occupied or vacant.

Previous questions asked via e-mail on February 24, 2011:

 Provide the math that the District used to determine an $81million deficit

 If contract transportation is cut, will the work performed by contractors shift to District-
owned transportation? Would this increase walking distances for students? By how
much?

 How much savings was realized due to the retirement incentive last year and is that
number reflected in wages and benefits (i.e. wages and benefit costs are reportedly
increasing $11 million and $26 million due to raises and an 11% increase in health care
costs. But isn’t that cost offset by the fact that there are less employees, and the newer
employees are making less in wages and contributing 15% toward health benefits?)

 Provide a breakdown of savings from the retirement incentive by bargaining unit

  How much of the cost for buses ($0.9 million) is reimbursed from the state and would
this create a safety hazard by not rotating out old buses?

 How much money has been spent on agency clerical this year versus how much was
budgeted for? If reducing agency clerical 25% equates to $0.45 million, then the District
is budgeting $1.8 million, yet only $600,000 is earmarked under this category in the
2010-2011 RCSD budget book.

 Explain, specifically, what would be reduced under “reduce Prof & Tech”?

 Provide the Union with a contingency plan for position restorations if the RCSD receives
more revenue than anticipated

 How much money did the District pay Aramark in the 2010-2011 budget year and how
much of the District’s money is earmarked for Aramark in the 2011-2012 budget?

 Provide a breakdown of vacancies by bargaining unit

 Provide a breakdown of cost savings, by bargaining unit (including the Superintendent

and SEG), for furloughs and wage increases, as opposed to grouping them into a “non-
teaching employees” category

 Does the possibility of a 4-day work week in July and August mean that the employees
would work more hours during the four days (i.e. 40 hour employees working four 10
hour work days)?

 What is “Capital Outlay”?

As soon as we obtain the answers to the questions listed above, we will convene a meeting of
the Executive Board so that I am able to effectively convey the fiscal condition of the District
and the options available.

We will then inform the Board of Education of all suggestions and or options that we would be
willing to consider. Thank you for allowing us an opportunity to participate in this collaborative
process.

Respectfully Submitted,

Dan DiClemente, President, BENTE/AFSCME local 2419

“The Support Staff that Supports Students”