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Eighth grader Junian Castillo headed into Intermediate School 327 in Mt. Eden Thursday morning, but not before a hug goodbye from his mom.

"I was kind of looking forward to seeing my friends back and the teachers back," Castillo said.

Junian was one of more than a million public school students returning to class Thursday after summer break. His school is one of 55 new ones across the city, and where Mayor Michael Bloomberg and Schools Chancellor Dennis Walcott popped in to welcome students back. The mayor touted his administration's successes in improving education in the five boroughs.

"It is a new year and a new chance to build on the enormous progress that we've made over the last several years. Our graduation rates are up nearly 41 percent since '05 compared to only nine percent improvement from the rest of the state," Bloomberg said.

"We will strive hard this year to make sure we raise the bar and exceed expectations," Walcott said.

But the mayor admitted there is still work to be done. Plus the city is at odds with the teachers union over a new teacher evaluation process. That needs to be in place by January or the city loses state funding.

But the mayor's visit to the New Settlement Community Campus stressed the positives, like the partnership between a community based agency and the city to get the $100 million school and adjoining community center built. It features amenities like a pool, dance studio and rooftop garden.

"It's been an incredible experience, lots remains to be done, and today is really the beginning of the hard work that remains ahead of us," said New Settlement Apartments Executive Director Jack Doyle.

Students and teachers said the first day of school was extra special in a brand new building.

"It's big and we have a lot more things to do around the school, activities and stuff like that, so it's going to be fun,' said Student Jaiden Young.

"We love it, it's the cycle of the year, it's the beginning, we get a fresh start, and today the fresh start is so fresh, we couldn't be more excited," said Teacher Cara Connors.

While talking about new school facilities, the mayor said the city can provide the building, but now the teachers and principals in the school system have to take on the heavy lifting.

Meantime, there is some relief for students struggling to get back into the school day routine as the two-day school closure for Rosh Hashana is coming up on September 17th and 18th.

UFT Head, Too, Pushes For Teacher Evaluations

United Federation of Teachers President Michael Mulgrew says getting a teacher evaluation system in order is a top priority this school year.

Mulgrew was at Sunset Park High School in Brooklyn Thursday morning to tour its new health clinic but said the first thing on his mind was teacher evaluations.

"We wanna get an evaluation system -- a new evaluation system -- done. One based upon making sure teacher are being supported and helping them get better throughout their careers cause if we get teachers the right support and they're doing a better job the kids win. That's priority number one," Mulgrew said.

Attempts by the city and teachers union to create a new evaluation system have been stalled.

Governor Andrew Cuomo says the city will lose hundreds of millions in school aid if a new system is not finalized by the end of the year.