Tonight was the Annual Meeting to approve the 2013-14 budget for the ECSD. This is the meeting wherein all electors of the ECSD may attend and vote. It is never well attended save for those for whom a rubber stamping of the budget pays their salary. All the usual suspects showed up: much of the administration, the school board, a few former board members and the occasional citizen without a dog in the show. I estimate a total of 25 folks in the room. I was the lone vote against approving the budget as presented.
The first budget item to come to my attention when I reviewed the board packet today was that the 2012-13 budget was under-spent by $380,000. A reduction in expected revenue reduced the net "savings" to $344,000. The problem is that this isn't a savings. Sure, it goes into the fund balance, but the result of under-spending a school district budget is that the state will reduce your aid the following year. We were scheduled to get a 0.55% increase in funding from the state this year, but this will be reduced this year because of items that fell into nearly all salary items: subs, teachers that quit mid-year and other unexpected reductions in expenses. I am appalled that the board approved teacher lay-offs of 8.8 teachers between 11-12 and 12-13 and then the administration couldn't better follow the budget to determine how under-spent it would be? What the heck? If I were one of the laid off teachers, I would be so blinking hacked off by this development. Word on the street is that the only department to have not had a layoff at the high school was math.
Here's a rundown on what Doreen Treuden, business manager, had to say about the three biggest budget areas that came in way under budget.
1) Curriculum, primarily from teacher salary for things like teachers leaving mid year and maternity leaves, but also included under-spending of classroom budgets by $20,000. Net underpayment $163,000.
2) Plant operations under-spent by $84,000. According to Ms. Treuden, it's hard to anticipate how often the boilers will need attention. I guess that amount will go toward the $25,000 insurance deductible on the press box.
3). They overestimated how much of the Fund 10 budget would have to be transferred to the Fund 27 (special education) by $170,000. It's somewhat distressing that the government mandates many programs without fully funding them. the total projected transfer from Fund 10 to Fund 27 last year was estimated to be about 2.1 Million Dollars, or 11.5% of the operating budget. The fact that they "only" needed 1.9 Million Dollars, or 10.4% of the Fund 10 operating budget to make ends meet does not inspire my enthusiasm, especially considering that the total expenditures in the group of four funds including Fund 27 only totaled about 3.4 Million Dollars. If I correctly interpret this information, this means that over 50% of the mandated services aren't funded and have to come from Fund 10. It was unclear why the amount transferred to Fund 27 was lower than budget. Whether that means there were higher revenues in that category or they just can't plan properly for distribution of services wasn't discussed.
My quick and dirty sum of these three items ($417,000) show that other parts of the budget must have come in a total of $37,000 over-budget, which isn't hard to imagine, what with all the substitute teachers they have to hire over there.
Then we were given a brief synopsis of the debt service schedule, to which we owe a great deal of our current property tax increases in the ECSD. The annual payment on our debt has increased 28.9% since 2008-09 and will increase by another 33% between now and when the debt is paid off in 2020. This year's debt service alone is a little over $3,000,000, which is added on top of the revenue cap when calculating the total levy and mill rate. By 2020, that number alone will be over $4,000,000. In 2008-09, the debt service accounted for 32.4% of the total levy and this year is accounts for 36.4% of the total levy. Ms. Treuden noted that in a few years, the district will be eligible to restructure the debt again, perhaps to an interest advantage. It would be nice to have a debt service value that wasn't increasing every year, but I don't know enough about financing huge sums of money to know if that would be possible. I can say that even if the district freezes expenditures and budgets at 2013 levels for the foreseeable future (unlikely), the total tax levy will continue annual increases because of increasing debt service.
So how has each component of the budget changed in the last five years? The Fund 10 budget has decreased by 0.3%, the Debt Service Levy has increased by 28.9%, the Total Tax Levy has increased by 14.7%, the Equalized Property Value has decreased by 5.2%, the Mill Rate has increased by 21.1%, the State Aid has decreased by 4.03%, the number of teachers has decreased by 10.5% and the total employees by 6.9%. The enrollment has declined by 6.6%. Recap: We're paying a lot more for fewer teachers, lower academic achievement and people are fleeing the district. Why have teachers decreased by 10.5% while enrollment has only declined by 6.6%? Either the teachers have taken an inordinate proportion of the hit or there were too many teachers for the enrollment in the first place. Neither of these scenarios gives me a great deal of confidence in the leadership of the school district. Click on the link below to view the Annual Meeting Packet to see this data for yourself.