Memo

To: Lawrence City Council

CC: Lawrence School Committee, Lawrence Public Schools
From: Pavel Payano, Lawrence School Committee Member
Date: May 4, 2017
RE: Funding from the City of Lawrence to Lawrence Public Schools

The City of Lawrence needs to increases its investment in our Lawrence Public Schools (LPS).
Within this document you will see that the Lawrence has historically not met some of the
responsibilities of funding our districts public schools. Lawrence has failed several times in the
last 10 years to meet the municipal contribution required by Massachusetts General Law Chapter
70, it has not covered the cost of leases as required by Massachusetts General Law, and it has not
funded its maintenance responsibilities such as the Pay Go Capital Account.

This has resulted in a net loss of millions of dollars for LPS that could have gone to hire more
teachers, buy new books, and further improve our public-school system. It is likely that this year
LPS will again face a decrease in funds from the Commonwealth. To mitigate this loss and
ensure that our children have an education system that is more than adequate, the City of
Lawrence should meet its required current obligations, allocate more funds than the minimum
spending requirement, and begins to pay back on funds it owes to Lawrences youth.

To further explain our current situation and create stronger partnerships between both governing
board I would like to request to be placed on the agenda of the Lawrence City Councils next
meeting, under Section 2 Communication from Mayor, City Officials and City Attorney. I
hope that the information I am providing will help you come up with decisions that will improve
our community.

Sincerely,

School Committee Member, Lawrence Public Schools

Table of Contents
I. City of Lawrence Required Obligations .............................................................................. 1
A. Net School Required Contributions .................................................................................................. 1
B. Pay Go Capital Account ................................................................................................................... 5
C. Leases ............................................................................................................................................... 5
II. Why Is There A Public School Municipal Contribution Requirement? ........................... 7
A. Simplified Chapter 70 Formula Calculation .................................................................................... 7
I. City of Lawrence Required Obligations

A. Net School Required Contribution

At the start of receivership, the City of Lawrence was in danger of losing Chapter 70 aid, as it
was failing for years to meet their Net School Spending requirement.1 In fact in seven of the last
ten fiscal years, Lawrence has failed to meet its required contribution to net school spending (See
Figure 1A & 1B). 2 In total, it has failed to contribute more than $26 million in Net School
Spending to LPS. 3

While it contributed in FY14, FY15, and FY16 the required amount to meet an adequate
minimum per student funding for FY 17 Lawrence is projected to be $354,756 below the Net
School Spending requirement (See Figure 2).4 Lawrence should not only be contributing the
required adequate minimum amount but it should also be contributing more to ensure that its
students are on par with other municipalities across the Commonwealth5.

Lawrence receives the highest percentage of Chapter 70 aid in the state (See Figure 3) while its
contributions rank among the lowest in the state (See Figure 4).6 In a comparison between 10
cities with similar student population sizes we see that not only do these other Cities contribute
their required local contribution but that they also allocate more funding than their minimum
requirement (See Figure 5).7 These are not just wealthy towns but also Gateway Cities like
Brockton, Lynn, New Bedford, and Fall River that share similar economic issues as Lawrence.

Fig 1A Actual Net School Spending

Above Foundation Budget
2,000,000
Dollars Over/Under Requirement

-2,000,000

-4,000,000

-6,000,000

-8,000,000

-10,000,000

1
FY18 Preliminary Budget Presentation, Lawrence School Committee Meeting 2.7.2017
2
History of Actual NSS
3
History of Actual NSS
4
FY18 Budget Hearing Presentation, Lawrence School Committee 4.26.2017
5
FY18 Budget Hearing Presentation, Lawrence School Committee 4.26.2017
6
FY18 Preliminary Budget Presentation, Lawrence School Committee Meeting 2.7.2017
7
History of Actual NSS
 Figure 1B Actual Net School Spending
Above Foundation Budget by
Percentage
2.0%
1.0%
0.0%
% Over/ Under

-1.0% FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17*
-2.0%
-3.0%
-4.0%
-5.0%
-6.0%
 Fig. 5 FY 2015 Net School Spending Comparison

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Required Local Contribution State Aid Extra Contribution

B. Pay Go Capital Account

LPS has had a history of using funds allocated for educating our students to cover costs that
should be paid by the municipality. In FY 2013, Lawrence Public Schools had to obtain a waiver
from the Department of Elementary and Secondary Education to allow it to use Chapter 70
funding to fix our school buildings, a cost and task that is the primary responsibility of the
governance of municipality. In FY 2017 the City of Lawrence did not fund this account and it
should be funded for FY 2018.10

C. Leases
According to 603 CMR 10.06, Chapter 70 Aid and Net School Spending from municipalities can
be used to pay for rental or lease of land, buildings, or building space for student instruction or
school administration purposes for a period not exceeding three years .11 This means that apart
from the required Net School Spending funding the City of Lawrence is also required to take on
the payment of leases for the Lawrence Public Schools that exceeds a period of three years.

In July of 2016, the lease for the Phoenix Academy Lawrence, a Lawrence Public School High
School, entered its fourth year. Phoenix Academy Lawrence focuses on challenging teens whom
have not succeed in other schools and require an extra level of support, resources, and training
necessary to succeed in high school and college, and become economically secure in their
futures.12 At our last School Committee Meeting we were told that the leaders of the City of
Lawrence knowing this requirement still decided to punt the required $350,000 payment for
the Phoenix Academy Lawrences lease to the Lawrence Public Schools.13 This shifting of

10
FY18 Preliminary Budget Presentation, Lawrence School Committee Meeting 2.7.2017
11
http://www.doe.mass.edu/lawsregs/603cmr10.html?section=06
12
http://www.lawrence.k12.ma.us/pal-main/299-pal-main
13
Lawrence School Committee Meeting, 4.26.2017
responsibility is a violation of both the spirit and the letter of the law. If the Lawrence Public
Schools is not reimbursed by end of the fiscal year it would mean that money that should have
been spent on the education of Lawrences children will have been used to pay for a
responsibility that our municipality was supposed to undertake.

For FY 18, Lawrence Public Schools, will have three leases that will exceed a period of three
years, totaling $689,467:
The Phoenix Academy Lawrence ($350,000), will enter its 5th year.

Former Governor Deval Patrick and State Officials Tour LPS - Phoenix Academy Lawrence 2.14.2014
http://www.socialventurepartners.org/boston/news/governor-and-state-officials-tour-phoenix-academy-lawrence/

Lawrence Family Resource Center ($148,485), which provides resources and services to
our students and their family. This department of Lawrence Public Schools ensures that
our families have greater knowledge and access to essential community and school
resources to address social, academic, health and economic challenges.14

Family Resource Center - Another Source of Pride in the City of Lawrence

http://elmundoboston.com/the-new-family-resource-center-another-source-of-pride-in-lawrence

14
http://www.lawrence.k12.ma.us/about-lps/family-resource-center
 Lawrence Family Public Academy ($190,982) a school of LPS which serves 172 Pre-
Kindergarten to Kindergarten students.15

Students from the Lawrence Family Public Academy

II. Why Is There A Public School Municipal Contribution Requirement?

The Massachusetts Education Reform Act of 1993, introduced comprehensive changes that
greatly affected urban public education. It created a massive infusion of public money to
communities like Lawrence and it also demanded higher standards and accountability. The
program which provides the general assistance to Lawrence Public Schools, Lawrence Family
Development Charter School, and the Community Day Charter Schools is normally referred to as
Chapter 70 as it gets its statutory basis in Chapter 70 of Massachusetts General Laws. Chapter 70
not only provides state aid to support our local schools but it also establishes minimum
spending requirements for each school district and minimum requirements for each
municipality's share of school costs.16

Chapter 70 assures fair and adequate minimum per student funding for public schools in the
commonwealth by defining a foundation budget that considers inflation and a local districts
enrollment and demographic data. 17 It also sets a standard of local funding effort applicable to
every city and town in the commonwealth. 18 In other words it establishes a minimum required
local contribution for all the cities and towns in Massachusetts. This minimum requirement also
considers the ability of the municipality to contribute. Chapter 70s funding formula is supposed
to have an equalizing effect in education as it ensures that all districts are able to meet the
adequate minimum per student funding.

A. Simplified Chapter 70 Formula Calculation

a. Foundation Budget
A districts foundation budget is determined by multiplying the number of students in thirteen
enrollment categories (e.g., grade level, low income, and limited English proficiency) by a set of
educational expense categories (e.g. administration & teacher compensation, maintenance, and
learning equipment and materials), adding together the total amount, and adjust for inflation.19
(See Figures 6 and 7).

15
Fiscal Year 2018 Proposed Budget April 2017
16
http://www.doe.mass.edu/finance/chapter70/
17
Mass. Gen. L.c. 70, 1.
18
Mass. Gen. L.c. 70, 1.
19
http://www.doe.mass.edu/finance/chapter70/chapter-cal.pdf
The determine the per pupil cost, the total foundation budget is divided by the number of
students in the district. FY 17 Lawrence Total Foundation Budget: $185,788,08220.

20
http://www.doe.mass.edu/finance/chapter70/chapter-17p.xlsm
 b. Required Municipal Contribution
Once the foundation budget is calculated the Commonwealth then calculates the municipalities
ability to contribute to its public schools. Essentially the required contribution is calculated by
measuring a municipalities tax revenues and how much it can reasonably raise to fund its
schools. FY 17 Minimum Required Lawrence Contribution: $8,809,10821.

c. Difference Between Local Contribution and Foundation Budget

Chapter 70 education aid is determined by calculating the difference between the total
foundation budget and the minimum amount required by a municipality. This ensures that every
municipality can at least fund the minimum amount possible that a district needs to provide an
adequate education for its children. FY 17 Chapter 70 Aid: $178,458,23622.

21
http://www.doe.mass.edu/finance/chapter70/chapter-17p-local.xlsx
22
http://www.doe.mass.edu/finance/chapter70/chapter-17p.xlsm