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Shortfall for Schools Now Tops $2M

September 21, 2018

LOWELL -- The estimated budget shortfall now tops $2 million as the line-by-line internal review of the Lowell Public Schools budget grinds on.

“We understand how urgent this is,” said Billie Jo Turner, interim assistant superintendent for finance. “We understand this is impacting decisions and we’re doing everything we can to finish.”

She said she does not have a full sum for the estimated shortfall, but highlighted an estimated $2.15 million in major findings, as presented at recent School Committee meetings. In rough numbers, the shortfall comes from four main areas, each expected to impact the budget by about a half a million dollars:

* Unfunded sick leave buy back,

* Out of district special education tuition

* Unavailable offsets to food services

* Unbudgeted transportation costs

The telephone account -- which was underfunded by an estimated $150,000 according to her review -- tips the amount over the $2 million.

The committee also approved a $50,000 third-party audit of the district’s budget in July, though the results have not yet been presented.

Below are some highlights from the Turner’s latest report to the School Committee on Wednesday.

* After a review of out-of-district tuition for students in special education, Turner said she believes this line item is underfunded in the budget by $496,779.

“That is without adding a cushion for additional students that may come in through DCF and other placements,” she said.

Several factors could both raise and lower this number.

First, given the new location of the Day School in Chelmsford, the district expects to bring out-of-district students, in-district, which “could show a savings,” according to Turner.

Special-education Director Jennifer McCrystal said the district has moved 12 students from out-of-district into the Day School and expects to soon admit two more students. Seven students with one-to-one paraprofessionals in other district schools are now attending the Day School, she said.

By the end of the week, 46 students are expected to attend the Chelmsford location.

However, the budget does not include an annual five percent increase for out-of-district tuition or students in the process of receiving an Individualized Education Program plan.

“With all of those changes -- the lower than expected revenue, the savings with Day School students, the savings with aging out students -- we still have a net shortage,” Turner said.

She said she will continue to monitor the situation and regularly update the committee.

As students move in and out of the district, “it’s a moving target,” Turner said.

* According to Turner, a previous administrator signed off on a bill, which paid for the transportation of students not enrolled in Lowell Public Schools.

When questioned by School Committee member Gerry Nutter, Turner said the previous chief financial officer would have been responsible for approving the payment.

The review found $40,000 in billing mistakes for the transportation of special education and homeless students, she said. The district is reviewing other transportation bills.

Turner said the schools are also working with bus companies and fiscally responsible communities “to absorb the costs.”

* The district ended the fiscal year with over a million in unpaid bills.

The bulk, $1.43 million, is attributable to bills for food services, which were not paid because the Food Services Account that had a “healthy” balance three years ago, was almost entirely depleted by the end of last school year, bottoming out at 33 cents at one point this summer, according to Turner.

“They had to wait (to pay) until there were funds in there to pay that,” Turner said. “We offset the food services budget so much there were no longer any funds.”

However, this is a revolving account, meaning money comes in and out independent of the fiscal year calendar. As a result, this sum won’t have a direct impact on the general fund, Turner said.

What will have an impact on the general fund is $153,394 of last year’s bills that Turner said were paid using this year’s budget or held due to empty accounts.

“These are the ones that we know about right now,” Turner said.

Acting Superintendent Jeannine Durkin said the district learns of these unpaid bills through vendors.

* According to Turner, accounts for telephone and photocopiers were both underfunded by tens of thousands of dollars.

For example, three years ago the photocopier maintenance account was budgeted for $185,000. It was reduced to $70,000 the next year. In the most recent budget it was reduced again to $25,000, despite actual maintenance costs for last year being almost $20,000 higher.

“That’s not enough to cover one of our vendors for copiers,” Turner said.

Due to a simultaneous reduction of the photocopier purchase account, Turner believes this fund should have been increased by $100,000, not decreased.

She said the district has a similar situation with phone bills, which was reduced from $190,000 in fiscal year 2016 to $20,000 this year.

“We’re already in the hole in August,” Turner said.

Follow Elizabeth Dobbins on Twitter @ElizDobbins

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