EagleTribune.com, North Andover, MA

November 27, 2013

Fiorentini: 'Painful cuts' will be needed

Review shows shortage of busing, special ed money

By Shawn Regan
sregan@eagletribune.com

---- — HAVERHILL — The School Department is still struggling to balance its budget, and the mayor said “painful cuts in personnel” are needed for that to happen.

It remains to be seen how student services will be affected by the cuts, which are necessary after a private auditing firm discovered problems with the budget.

Superintendent James Scully said the district is projecting a shortfall of around $500,000 for the fiscal year that ends June 30, according to a financial review by the Melanson Heath & Company firm of Andover.

Mayor James Fiorentini said the shortfall is actually much greater, but that it will be trimmed to about $500,000 if City Council approves more money for schools that he will propose at Tuesday’s council meeting. The mayor said he will recommend that $250,000 in state money the. city has been holding be used to reduce the school deficit, as well as another $89,000 in federal Medicaid reimbursement money.

The mayor said Scully has already made about $750,000 in spending cuts since the start of the school year.

“The fact we passed a budget that was nearly $2 million short of what we needed is a big concern,” Fiorentini said. “But the good news is we hired a company that uncovered the shortfall early enough that we have plenty of time to fix it.”

Fiorentini, who is also chairman of the School Committee, said he expects schools will have to make “painful cuts in personnel” to trim another $500,000 or more from the school budget.

“There is no magic wand we can wave or grant we are going to find to fix a shortfall of this size,” the mayor said.

The schools hired the Melanson firm as a condition for the mayor and City Council agreeing last summer to give the schools an additional $1.35 million to plug a budget shortfall that school officials said was caused by an unexpected overrun in special education spending.

In exchange for the city bailout, the School Committee also agreed to cut its budget by $500,00 and put $200,00 into a special education reserve in case that account runs over again this year.

The mayor said does not support tapping the special education reserve at this time.

“The reserve is for emergencies and it be would be a tremendous mistake to drain it now,” Fiorentini said.

Scully said he will be present his plan to make cuts and balance the spending plan to the School Committee within the next few weeks.

The Melanson financial review concluded the shortfall is mainly the result of inadequate funding in three areas: Transportation, special education and money set aside to pay substitute teachers.

Scully said the shortfall is also the result of about 200 more students enrolling at city schools this year.

“We’ve done a good job cleaning our schools and improving our student test scores, and with that comes more students,” the superintendent said. “Kids keep coming and we have to deliver for them. Much of what we spend is required by law, and the fact is we are continually asked to do more for less.”

For instance, the budget for school transportation this year was reduced by $200,000 in a deal worked out by the Scully and Fiorentini during last summer’s budget review.

The School Department was looking for an extra $500,000 for the school bus routes, but the mayor would only support $300,000 more. According to the Melanson review, the transportation budget is now projected to come up about $200,000 short.

Scully said last year’s shortfall was primarily the result of 18 special needs students who moved to Haverhill during the school year, including one who cost the district $329,000 in eight months. In all, the district spent about $2 million more than was set aside last year to educate students with physical and mental disabilities, he said.

The superintendent said changes have been made to try to avoid a similar overrun in the special education budget this year, but that a deficit is still possible.

The final Melanson report is expected to include “conclusions as well as recommendations for improvement,” according to the company’s proposal for the job. The firm has also offered to meet with school officials to provide assistance in implementing any recommendations it makes.

Scully said he expects to receive a written report for the School Committee from the accounting firm next month.

Overall, this year’s approximately $90.5 million school budget is up about $4.3 million or about 5 percent over last year’s budget.

“There is no magic wand we can wave or grant we are going to find to fix a shortfall of this size,” the mayor said.