Newton Community Education is facing an ongoing deficit problem, and the School Committee has decided to try to help solve it, just in time for NCE’s winter programming to move forward.
The committee will provide NCE with up to $500,000 to cover deficits accrued after years of financial obstacles including a pandemic and a teachers’ strike.
NCE Director Kate Carpenter Bernier met with the committee Monday night to present a plan to save the beloved local organization.
“I am also a Newton resident,” Carpenter Bernier said. “I want to be as efficient in our programming and resource allocation as possible.”
The rough road to the red
Launched in the early 1990s, NCE provides learning and enrichment programs to kids and adults from all walks of life and describes itself as a “self-sustaining arm of Newton Public Schools.”
NCE serves about 3,500 people in 650 programs and operates with an enterprise fund within Newton Public Schools. But in recent years, being self-sustaining has been more and more difficult for NCE.
New requirements to pay for not just employee salaries but also employee benefits and pensions as well as custodial services has put NCE in a financial bind.
NCE takes in $1.8 million a year and has $1.7 million in direct costs (salaries and bills), the memo lays out. That leaves $100,000 in surplus money.
But employee benefits cost $159,000 a year, pensions cost $153,000, custodial services cost $63,000 and PRC permits cost $42,000. That creates an annual deficit of $317,000.
NCE offers financial assistance for low-income families through fundraising “and then figuring it out,” Carpenter Bernier said. In 2024, more than $65,000 was awarded in financial aid.
“You have to provide income verification. However, if an NPS counselor or principal or ELL teacher calls us and they say, ‘we have a family in need,’ that is enough,” she said.
Since she came onboard a couple of years ago, Carpenter Bernier said, NCE has started asking vendors to provide scholarship funds.
She’s also been working on a turn-around plan for NCE’s finances since she started in her job.
“Ten years ago, in 2014, our reserves were growing, and our revenue was high,” Carpenter Bernier said. “That continued to build. The pension was low.”
In fact, in 2017, NCE was able to give more than $100,000 in support to NPS when NPS needed it.
Then came COVID-19, which forced NCE program closures, cut off revenues and wiped out those reserves.
NCE did not receive any of the $63 million in American Rescue Plan Act (ARPA) money that came to Newton in 2021.
“We also did not receive any financial relief for the losses that occurred during the NTA strike,” Carpenter Bernier said.
Bringing it back to the black
Part of the comprehensive plan to build back finances involves bringing back programs that COVID-19 had stopped.
For example, the NCE Travel Program—which organizes trips and tours within the United States and abroad—is back this year and has already netted $10,000.
NCE also lost its lucrative baseball program and driving school, both of which Carpenter Bernier said she wants to bring back.
NCE is also cutting expenses, and it’s looking at a deficit of about $5,000 by the end of Fiscal Year 2025.
“The previous [NCE] administration did not cut expenses, and in ’22 and ’23, actually increased central staff by more than $130,000 a year,” Carpenter Bernier said. “I know there was a lot of optimism that our revenue would return, and you do need your basic office functions, we needed to correct earlier. And now you see we are correcting.”
That correction is a combination of cost controls and staff cuts starting this year. Positions were not backfilled, and this year NCE has 2.5 fewer full-time positions.
NCE is also moving classes around to save money.
“We reduced one night of adult classes,” she continued. “We still offer the same amount of adult classes, but we’re not paying for the site coordinator for four nights. We’re paying for three nights.”
NCE is also working on decreasing credit card fees and moderately increasing program fees.
The School Committee was satisfied with the turnaround plan, at least enough to let NCE hold its upcoming winter programming and start signing people up for summer offerings.
Ward 8 member Barry Greenstein faulted the School Committee with not properly managing the NCE situation earlier, but he also called out the city for not stepping in.
“I’m kind of surprised to find out that you did not receive any ARPA funds, because in my mind, that’s exactly what those funds were for,” Greenstein said.
Mayor Ruthanne Fuller, who sits on the School Committee, countered that NPS received ARPA funds directly.
“Millions and millions and millions of dollars came to NPS,” she said.
“Money could have been allocated to this [NCE],” Greenstein replied. “It was allocated multiple different places it didn’t need to go. It could have been allocated toward this.”
Vice Chair Emily Prenner said she’d like to see a “middle ground” between NPS paying for robust NCE program offerings and closing NCE. Focusing on lucrative programs like summer camps was one idea she raised.
“There’s a Yiddish phrase: I think it would be a shanda, it would be almost disgraceful, for us to shutter NCE,” Prenner said. “That doesn’t mean that it can necessarily work the way it has in the past.”
There was talk of helping NCE cover its deficit for the remainder of the calendar year for winter programming and then having NCE come back for more funding, but Ward 6 member Paul Levy said that would create a perception that the School Committee lacks faith in NCE, which could keep people from signing up for services.
The committee voted unanimously to give NCE up to $500,000 to cover its coming FY2025 deficit and approve new fees for NCE programs.
The deal requires monthly updates from NCE on its finances and how those finances compare with projections.
NCE will be back in front of the School Committee in the spring to discuss overlap of programming with other city services and how NCE can streamline programming to eliminate those overlaps.