Why a budget reduction if the BOE is spending the same amount as last year? Well, several contracts have built-in percentage increases in cost over time. For example, teacher salaries might have a contracted 2.5% increase per year, so even if no other costs change, it would cost more for teacher salaries each year, so the budget would have to increase by that amount. However, the BOE was able to negotiate a zero percent salary increase and no step increase between the Middletown School Administrator's Association (MSAA) and the Middletown Federation of Teachers (MFT) for FY 2010-11. The classified and paraprofessional salaries do have an estimated 2.5% salary increase for FY 2010-11, but both contracts expire on 6/30/10 and will have to be re-negotiated.
The Superintendent had asked for a 1.28% increase over last year's budget, and not getting it meant $859,520 had to go. The full explanation for where the "trimming" occurred will be available on the District website very shortly and I will put a link in this article when I can. For now, though, here's a brief summary of the major changes:
- A drastic reduction in diesel fuel costs was achieved by re-negotiating the purchase price and buying less fuel overall. The cost went from $3 per gallon to $2.62, and only 176,000 gallons were purchased in FY 2009-2010 instead of the 207,000 the budget originally estimated. This saved $621,000 in fuel costs.
- Savings on electricity, natural gas, water/sewer, and telephone costs as contracts were re-negotiated at a lower cost or actual usage was less than budgeted amounts. Revising these estimates saved $75,000.
- There is a $1,497,466 surplus from the 2009-2010 budget, and some of the surplus will be spent on services that can be "pre-purchased" for next year out of this year's funds. As an example, a computer software license was renewed for a three-year term instead of just one year, and this saved $45,543. The Upward Bound Program starts in Fiscal Year 2009-10, so the program's $34,020 cost will also be paid out of surplus funds. Memberships and dues that have already been received will be paid out of surplus funds as well, saving another $8,000 from the 2010-11 budget.
- The Workers Comp Premium was $87,362 less than what was originally estimated for the 2010-2011 budget.
Budget Committee Chairperson Jay Keiser commented that "everyone should be very pleased with this proposal" as no teaching positions were cut and no programs were cut to accomplish the zero percent increase. Keiser went on to say that many entities took action to make this "healthy position possible," and he recognized teacher/administrator cooperation, reduced energy costs, a new business manager and a hard-working facilities manager as being responsible for the necessary reductions. Board member Ryan Kennedy stated that his dream of a zero increase budget was finally accomplished, and he commented the administration for its cost saving efforts without impacting staff or educational services. BOE Chair Ted Raczka agreed: "This is really an excellent budget given the circumstances." Board member Bill Grady was quick to point out, however, that budget realities did impact what the board would have wanted to do if it had the funding: "We didn't have to take stronger measures like other districts did, but we're not doing what we could have if we had funded the requested budget."
After the board voted to approve the budget, it also approved a series of line item transfers totaling $1, 497,466 in "surplus funds." This surplus "will lesson the impact of next year's zero percent Budget," and District Business Manager Nancy Haynes explained the surplus as follows:
- A substantial savings in salary costs came as positions were filled over the summer at a lower cost than the 2009-2010 budget anticipated.
- Energy and supplies costs were not as much as originally budgeted (diesel fuel, electricity, etc.)
- "Built-in assumptions" were re-evaluated to reveal lower actual costs
Haynes went on to say that while she would love to have a surplus every year, she can't predict what will happen in the next year. She also commented that "a year from now we'll reach the funding cliff we've been talking about, so anything we can do now will help us then."
[Author's note: the funding cliff refers to the almost $5 million in Federal stimulus funds that will expire at the end of 2011. The town and the state passed on those funds IN PLACE OF rather than in addition to funding the BOE would have had otherwise. It is largely assumed that when the federal dollars run out, the BOE will have to close the gap itself as the state and town will not be able to maintain the elevated funding level.]
Commentary:
Superintendent Michael Frechette noted that with more than 3/4 of Connecticut's towns already having approved FY2010-11 budgets, the average budget increase was almost 2%. Now, most towns aren't as large as Middletown, so that's something to consider when comparing our zero percent to their 2%. I also couldn't help noticing that much of tonight's budget explanation started or ended with "it wasn't as much as we had estimated." While I can appreciate the hard work it takes to put together a budget, and while the "difficulties" between the BOE and the town have certainly been a distraction at this busy time of year, and while the District has only had a Business Manager for a year, I'm kind of wondering about the "estimating" that has happened over the years. I added up all the columns on the recommended changes summary sheet that indicated an estimate had changed, and that was almost $650,000. Granted, some estimated costs ended up being more, but a lot more costs were substantially less.
Comparatively speaking, only about $83,000 will be saved if projected salary increases aren't paid or if a vacant position isn't filled or if a position is paid for by grant funds instead. Roughly another $80,000 will be saved by paying for programs or fees out of this year's funds for next year.
There was almost a $1 million surplus in the FY 2008-09 budget as well, and $500,000 of that went to athletic uniforms that were not a part of the 2008-09 budget or asked for in the 2009-10 budget.
There were also questions raised during the public comment session about how the District spends grant money and whether or not it spends those funds on what the granting entity intended the funds to be spent on.
And don't forget that we re-districted for next year, so no one really knows yet how all the various costs for that will shake out. Ideally transportation costs should decrease and so should other program costs, but it will take a year to figure that out.
Until then, it seems that a rough economy has actually been good for the school budget process...I like seeing phrases like "revised estimate based on updated usage." While it pains me to think about this too hard, I'm hoping that we're seeing smarter and leaner budgeting because that's how it's supposed to be, not because times are tough and people are paying attention to what's going on. I also hope that future savings from the re-districting process will be funneled back into the educational services part of the budget so we can update our curriculum, fund a longer school day and keep class sizes small. And guess what? The BOE actually talked tonight about finally scheduling that summer workshop to talk about their goals and priorities for the next 5-10 years...OK, they've been talking about this for about 18 months now, so I can't get all that excited...
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