Members of the Committee Present

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EEC Board Committee

Fiscal and Budget

Thursday, October 22, 2009

3:00pm – 5:00pm

Massachusetts Business Roundtable

141 Tremont Street

Boston, MA 02111

Members of the Committee Present:

J.D. Chesloff

Sherri Killins, Ed.D EEC Commissioner (Ex-Officio)

Sharon Scott-Chandler (Ex-Officio)

Chi-Cheng Huang, M.D.

EEC Staff Present:

Sean Reynolds

The meeting was called into order at 3:10 pm.

9C Reductions:

Commissioner Killins updated the sub-committee regarding the potential of 9C reductions. Though it is unclear of the extent of the 9C reductions, it is clear that they will be implemented. As part of the 9C reductions Commissioner Killins said furlough days for managers will be imposed on a sliding scale based on salary.

Review of the Caseload Accounts:

Sean Reynolds reviewed the projected FY10 cost of the three caseload accounts. Commissioner Killins prefaced the discussion by saying that it is extremely early in the process of projecting costs in these accounts.

The DTA (3000-4050) and the Supportive (3000-3050) accounts are currently showing a potential deficiency of a combined $8M. JD Chesloff inquired as to how the legislature builds the Support account line item.

The Income Eligible account indicates a total $19M availability after projected expenses. According to Sean Reynolds this number could change dramatically depending on various factors such as any unanticipated increase in particular populations, under-utilizations does not meet expectations, thus straining the flex pool for which it helps support. Commissioner Killins discussed the impact attrition has on the Income Eligible account. She said EEC will look more closely at this.

JD Chesloff asked whether the $19M available in the Income Eligible account would be susceptible to 9C reductions. Sean Reynolds added that, due to legislative language within the caseload line items, EEC may be expected to support some of the deficiency in the two accounts with any available money in the Income Eligible account.

Going forward JD Chesloff asked if any action regarding the caseload accounts is necessary by the board. Commissioner Killins responded that it is still premature to make decisions and that we should wait to see how the caseload progresses over the next few months. Commissioner Killins reiterated that many factors (flex pool) may impact any projected availability of funds in the IE account, however, if the IE cost projections hold true then perhaps EEC can support additional caseloads for the remaining six months.

FY2010 Spending:

Sean Reynolds reviewed the FY10 spending to date. JD Chesloff asked if we are where we should be in non-caseload spending for this time of the year. Sean Reynolds responded that EEC was, notwithstanding “9C” reductions.

Unified System Update:

EEC just completed the re-bidding process and only one viable bidder responded, Deloitte. An evaluation committee has met to review the proposal. Commissioner Killins estimates that by late December we can formalize the bid. By summer of 2010 the IT plan will roll out and the project will be complete within two years. At a coming board meeting the vendor may give a presentation on its proposal. Overall Deloitte has come up with a strong bid; however, in the unlikelihood that EEC and vendor cannot consummate an agreement a rebid process is possible.

Financial Policies:

JD asked what was driving the effort to update the financial policies.

Providers and internal initiatives (improper authorization payment study) indicated the need to clarify many portions of the financial policy manual. Currently, EEC staff is updating a handful of policies, but a comprehensive look and updating of the manual is underway and planned for completion in the upcoming months.

JD asked about the impact on the budget. Commissioner Killins said that financial policies can drive the budget. Also, he asked whether this is on the agenda for the board meeting next month. Commissioner Killins said the financial policies will be on the agenda soon.

FY2011 Maintenance:

Before reviewing the FY11 maintenance budget, JD Chesloff asked what the Board will vote on at the next board meeting as it pertains to the FY11 budget. Commissioner Killins said the board may anticipate voting on the proposed restructuring of community and family engagement grants and where cuts should be made.

FY11 maintenance essentially reflects level funding in most areas and a slight increase in personnel (CBA mandated cost) and leases (Sleeper Street and Lawrence).

FY2011 Grants:

Commissioner Killins lead the review of grants for the sub-committee. She detailed the following grants:

• Community & Family Engagement Grant (which the commissioner proposes moving the money to the Family Engagement account);
• Building Careers Grant;
• Pre-school Learning Environment Grant;
• Professional Development Grant;
• Head Start Grant; JD asked Sharon whether kids lost care due to FY10 budget reduction (compared to FY09). Sharon responded that no children lost care due to ARRA funds; and
• Mental Health.

Commissioner Killins also stated that it is EEC’s intention to issue one RFR for the Professional Development grant and to really focus on evidence based programs and QRIS alignment. JD Chesloff asked whether the “Race to the Top” grant and Readiness centers supplant the existing professional development expenditures.

Commissioner Killins said that in light of the budget crisis, we must focus on workforce development and professional development. We should invest in programs that will allow us to survive the recession and position ourselves for the future. The Unified System and QRIS are examples of how we can place ourselves in a position of strength going forward.

FY2011 Potential Cuts:

Commissioner Killins stated that we are not sure what cuts we will be faced with, but it is certain we will have to make difficult decisions. There is a real possibility we could face as much as a 10 percent cut in FY11. If the cut went across the board EEC would lose up to 22 positions and the caseload accounts would be forced to reduce the population served by roughly 6,000 kids. JD Chesloff said there are very difficult decisions with limited options. Also cutting all programs is problematic because UPK is a priority of the Governor.

Notwithstanding cuts, Commissioner Killins offered restructuring a few line items to reflect earlier movements in grant efficiency. She proposed to move the $1.3M LPC-CPC Supplemental grant in the IE account and $10.1M Local Planning & Coordination grant in the Quality Account to the Family Engagement account. The members assented to the proposal.

The Commissioner also recommended that recipients of the Inclusive Classroom grants be notified of the potential reduction of the grant amount. JD Chesloff said everyone should already be aware of the gravity of the fiscal climate. Members did not decide on a letter to the recipients.

Meeting was adjourned at 5:05 pm.

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