Less than 10 weeks before the close of the fiscal year, Bedford’s education budget is running a deficit of more than $1.2 million.
The primary categories responsible for the shortfall are special education transportation, out-of-district special education tuition, and special education contract services. There is also a significant deficit in the cost of substitute teachers.
“We are facing all of those headwinds simultaneously,” Superintendent of Schools Cliff Chuang said.
Chuang presented details in a memorandum to the School Committee, and discussed them at Tuesday’s School Committee meeting. He emphasized that these are “preliminary projections,” but that immediate cost-saving measures won’t make a big difference as 82 percent of the budget has been spent or encumbered.
“This is of a magnitude that is going to require some collaborative problem solving,” Chuang said.
Copies of his memo went to the chair of the Finance Committee, the chair of the Select Board, the Town Manager, and the town Director of Finance.
“We are trying to identify how we can address this gap as a town,” Chuang told the committee.
“We hope this is the high-water mark of the damage. We hope we can bring numbers down as we inch toward the end of the year,” Chuang said.
He will be meeting with municipal financial department heads and board members – several of whom were monitoring the meeting on Zoom.
The superintendent said he will provide an update at the May 14 School Committee meeting “with specific recommendations on how to get through” the remainder of the fiscal year.
“There’s going to be a combination of potential solutions,” said the schools’ Director of Finance Julie Kirrane.
“We need to protect some of those core tenets about what people love about Bedford,” Chuang said, “juxtaposed with the fiscal realities. We may need to make some compromises in a thoughtful way, not a reactionary way.”
Asked by committee member Sarah McGinley if the timing of the notification was due to late out-of-district assignment, Chuang acknowledged that the impact of new students was not immediately addressed because of ongoing “intensive modeling” related to ongoing contract negotiations with two educators’ collective bargaining units.
“Next year, we will have full visibility,” he said, reporting quarterly instead of mid-year.
Special education transportation both in and out of district is having the greatest net impact, the superintendent said. “The environment for hiring and the availability of drivers is quite competitive.” Yet under state law, “We have to get them to school.”
Kirrane told the committee, “Very early in the fall, it was clear that special education transportation costs had risen, and I was concerned.”
Out-of-district special education tuition is about $1 million over budget, according to the superintendent’s memo. If all offsetting sources of potential funds are factored, including a $150,000 reserve fund transfer, the deficit is still $300,000.
Plans called for 34 out-of-district day students and eight residential, but the actual number was 31 day and 12 residential students, including four newly enrolled, Chuang reported. “We have not had this many residential placements in recent history,” he said.
There’s also a deficit of $450,000 in contract services that support in-house classes for students with special learning needs. This category includes specialized instructional aides “for students who require smaller group attention. We need to turn to contract service partners to fulfill the requirements for an IEP (Individualized Education Program).” If these positions aren’t filled in-house, he said, “rates are significantly higher.”
So far this school year, the superintendent wrote, the cost of substitutes is almost $200,000 more than all of last year. One reason is a broader policy on parental leave that results in more teacher absences.
“That was a major priority for teachers,” Chuang said, and it helps the district be competitive for professionals. Also, he added, “we made adjustments in the rates to attract more substitutes.”
“There aren’t any real discretionary out-of-district tuition expenses,” Chuang explained. “Financial considerations aren’t part of the calculation. There are federal and state laws around special education.” Still, he noted, “My jaw dropped when I saw the individual tuitions in the $200,000 to $300,000 range.”
Kirrane added, “We are seeing a lot of changes in placements at a higher level of need,” a pattern consistent with other districts.
Committee member Sheila Mehta-Green, who for several years was a leader in Bedford’s Special Education Parents Advisory Council, said she expects the challenge to continue. “All you need is one student to topple that model. I would expect this to happen next year.”
Chuang acknowledged that “there is evidence of increased need,” and “we need to have the ability to withstand something we just can’t predict.”
He added, “I feel very confident that our special education and general education teams will work hard to keep kids in the district.”
Next year, he noted there also will be a new stabilization fund seeded to offset these kinds of anticipated costs. Chuang proposed the fund that was approved by Town Meeting in March. His initial call for $950,000 in seed money was reduced over the budgeting process to $350,000.
One source of state revenue is known as the special education circuit breaker. Districts are reimbursed 75 percent of qualifying tuition and transportation expenses exceeding $50,000. But the reimbursement is delayed by a year, so only payments from last school year’s expenses will help reduce the shortfall.
Noting that the budget update indicated a surplus in teacher salaries, but a deficit in the substitute budget, member Brad Morrison asked Chuang if the district is “having trouble hiring people?”
“We have fallen behind in respect to competitiveness,” Chuang replied. As contract renewal talks continue, “We are in a weird liminal place” for the fall, but “I am cautiously optimistic that things will get better with overall hiring.”
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