PORTLAND — School Board Chairwoman Sarah Thompson told city leaders Monday night district test scores are improving and school facilities are expanding, but challenges remain on the horizon.

Thompson delivered the third annual State of the Schools address, as mandated by a 2011 slate of City Charter changes approved by voters.

The approximately 30-minute speech came less than a month after the board extended Superintendent Emmanuel Caulk’s contract by a year, from 2015 to 2016, and received the initial draft of his fiscal year 2015 budget, which increases spending by $4.1 million, but includes no staff cuts.

“The board and superintendent are working well together, bringing focus and stability to the district,” Thompson said.

Thompson noted that Portland schools where students previously scored poorly on standardized tests have bounced back, with Presumpscot Elementary School recognized by the state last week as a “High Performance Reward School” and Riverton Elementary School now outperforming state and district scoring averages.

District wide, fifth-graders exceed state averages on the standardized New England Common Assessment Program tests by 6 percent, while Portland eighth-graders top state means by 8 percent, Thompson said.

But she acknowledged that the district graduation rate of 79.5 percent lagged behind the state graduation rate of 86.4 percent, and only 46 percent of Portland’s third-graders living in economically challenged households scored as proficient in reading, compared to a larger district average of 62 percent.

Thompson said Caulk and other school system leaders are working hard to develop individualized learning strategies for the most at-risk students. She added that district officials are continuing work on plans to replace the deteriorating Fred P. Hall School and upgrade several other school facilities, are increasing the amount of locally sourced food served in school cafeterias, updating its technology infrastructure, stepping up its composting efforts and shifting to more environmentally friendly natural gas buses.

She also lauded the system’s recent purchase of the former Goodwill Industries building at 353 Cumberland Ave., which will allow the district to move its central offices out of its Allen Avenue school building and free up space to expand its popular expeditionary learning-based Casco Bay High School there.

“Portland public schools are at a crossroads in many ways, but we have strong leadership and a clear focus on how to become one of the best small urban school systems in the country,” Thompson said.

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