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Schools Surplus Frustrates Wilton Parents

Town officials say BOE over-budgeting is sound financial practice.

For some Wilton parents, the Board of Education’s nearly $2 million surplus doesn’t add up.

According to town resident Diane Kuczo, many parents are "very frustrated that we are paying higher taxes" under threats to cut programs, increase class sizes and make do with fewer teachers or without freshman sports.

"Yet there are still program cuts in the schools, and then we find out we have extra money, so the programs didn’t need to be cut and our taxes didn’t need to be raised," Kuczo said.

Last spring, Wilton passed a $112 million town budget, and of that, $72.8 million was slated for the Board of Education. Now unaudited figures show the BOE running a surplus. Yet, many parents are confused as to whether it signifies good financial planning or false alarms.

In that, Kuczo’s frustration mirrors other parents of school-aged children. Every year at budget time, the Board of Education and its representatives tell parents programs will be cut if the budget doesn’t pass, Kuczo said in an email.

“I can understand frustration when budgets have been cut to pretty low levels in the past years and then we end up giving money back at the end of the year,” said Ken Post, Director of Financial Planning and Operations for Wilton Schools. “But you get a set amount of money and you can’t be wrong the other way, you can’t spend more than you have.”

Moreover, this year’s surplus won’t necessarily factor into next year’s budget. When putting together next year’s budget Post said he looks at which items caused the surplus.

For example, the surplus might result from a heating oil surplus, or from unexpected teacher retirements. And while Post might hypothetically budget for three teacher retirements, there could be four unexpected ones.

Schools, similarly to departments in private companies, over-budget out of caution, said Board of Finance member Andy Pforzheimer.

“They don't want to get caught short if they guess wrong on the medical, and have to get supplemental appropriations from the town, which is a big headache,” Pforzheimer said.  “It's a balancing act as to how much this makes perfect sense, and how much of it is an overuse of taxpayer money.”

Nearly the entire surplus came from items unrelated to academics. They included Medical, early retirement and energy savings.

For example, in 2011 the schools spent $8.2 million on health insurance, but had budgeted for $10 million. Then, six months into the year it was clear the schools weren’t going to need that money.

Yet, Post said “It’s often six months into it by the time we knew with any certainty what it’ll [surplus] be."

Situations such as this have some on the Board of Finance members pushing the schools to adjust the amount of money requested in their budget. However, the finance board understands the BOE's fear of being caught short-handed.

“The schools self-insure. If there are fewer claims than expected—or rather, fewer than the worst-case scenario incorporated into the budget—then there is money left over at the end of the year,” Pforzheimer said.

Board of Finance member Lynne Vanderslice said the Board of Education budget, like any town department, is simply an estimate.

“Some years you might be under and some over,” she said. “Typically both the schools and the BOS are conservative in their budgeting as unlike a company, if they under budget they can't just sell more product. Instead they have to come to the BOF for a special appropriation.”

If there’s a surplus the BOE returns the money to the undesignated general fund confident that if a deficit occurs in a future year, the BOF will provide them the additional funding, Vanderslice said.

“So it stands to reason that if there's "extra" it would go back to the Town,” Pforzheimer said. “If your kid asked for $20 to go to the movies and get some popcorn, and it turns out the popcorn was less than he thought, and he had $2.00 left over, he would give it back to you, not keep it.”

Al Alper November 17, 2011 at 04:14 PM
Geoffrey, I know you asked Andy but as a BoF member I thought I'd clarify. There are no guaranteed reimbursement rates. State budgeting can ebb and flow the amount of dollars returned to the Town.
Geoffrey Day November 17, 2011 at 04:21 PM
Thanks, Al. Do I understand you correctly, that all reimbursements are made directly to the town? So, for example, SPED reimbursements don't go to the school district?
Andy Pforzheimer November 17, 2011 at 04:25 PM
That is correct. Typical SPED excess-cost reimbursement is between 75% - 90%, although it dropped this past year to 77%. It is budgeted at 60%. This can be construed by some people as a "waste" of money that could be spent better elsewhere, or as a prudent estimate in a climate where you never actually know what the State will decide until the last minute, and you don't want to be caught short.
Sue Donem November 17, 2011 at 04:36 PM
Andy, Your response might be read as though 77% of SPED costs were reimbursed, though I'm pretty sure that's not what you meant. As I recall there are two reimbursement lines on the town's P&L that totaled about $2 million last year (one was about $1.5M and the other about $500k). I have always found the town/BOE split confusing and frustrating. For example in a previous post you cited a total budget of $73M, but that is not net of the town reimbursements or the school related costs that are on the town' books correct? Assuming that's the case then it's very hard to exactly how much is really spent on the schools, the cost per pupil, etc.
Andy Pforzheimer November 17, 2011 at 04:46 PM
It's "excess-cost" reimbursement. That only refers to the amount by which the cost of educating special-needs students exceed the state formula (4.5 x avg per-pupil, I think?) This flattens the playing field somewhat for schools that have a large number of more-expensive special needs students. As I think I said before, the difference between what we budget (60%) and what we receive (77%) is in the low six figures, and is almost always completely eaten up by overspending in the SPED budget. The large reimbursement is generally not from SPED, but from excess (out of caution) in the self-insured medical plan.
Geoffrey Day November 17, 2011 at 07:57 PM
Andy, in an earlier post today you said the SPED reimbursements don't go to the school district. To Sue Donem's concern, do the reimbursements ever get into the school district's revenue stream/budget, or do they just offset overspending in a contra-account in some other Town budget?
happy November 17, 2011 at 08:21 PM
Hi WT, NO, I never said that I would pay 20,000 for a Wilton education. I have trouble justifying the $15,000 I pay in taxes, and that covers schools, police, fire, etc...
Sue Donem November 17, 2011 at 08:47 PM
Obviously I will defer to Andy, but I'm Pretty sure the answer is no they do not find their way directly in to the BOE revenue stream. The best you can hope for is that the reimbursements that go to the town allow the BOF to allow for larger budgets, both BOS and BOE. Not a great position imo......
carol ball November 17, 2011 at 09:37 PM
If the $ went back into the BOE budget, then the surplus would be more than $2 million. Y'all will be hopping mad then, especially since there is no line item for spending the windfall reimbursed money. A conundrum.
Eustace Tilley November 17, 2011 at 09:50 PM
Well, its my understanding the underspent funds do wind up back in the BOE budget! How so? Well, the mill rate increase offered by the BOF is 1.7% above the current year budget. For ease of demonstration, lets assume the BOE budget is $100,000,000 so next years budget will be $101,700,000.00 Now compare this to what was actually spent ($98,000,000.00) So they will have an extra $3,700,000.00 to spend next year or 3.8% more. Reasonable? Not really!
Andy Pforzheimer November 17, 2011 at 10:18 PM
Ed - That would be correct if in Year 1 there were a surplus, and in Year 2 they spent all the money. Using your example, in Year 2 in real life they would spend $99,700,000 and return $2,000,000, as they usually do - for a spending increase of about 1.7%.
Geoffrey Day November 18, 2011 at 02:17 PM
To EP's and WT's complaints about budget transparency, this past year's BOE budget showed 2008-2009 Actual, 2009-2010 Actual, 2010-2011 Budget, and 2011-2012 Proposed. By the time the 2011-2012 Proposed Budget was being compiled, I'd think that full-year 2010-2011 Actual should have been available. Is this something the BOF could request be included in the budget presentation (due to space limitations, the oldest actuals would probably have to be dropped, or they'll need to go to an 11 X14 format)?
Eustace Tilley November 18, 2011 at 02:33 PM
Geoff, Andy and Al I'd be willing to read the fine print if the information were compiled and published ! I have long complained that we do not see published actual expenditures compared to that year's budget and to the new year's budget by line item. To my mind, that makes it almost impossible to understand and critically evaluate where the money is going. This then makes it impossible to pose questions that the entire community can understand (and either endorse or oppose). We already know the BOF does not keep records of prior year's budgets (per Warren's email to me last year) but I would hope it keeps records of actual expenses by line item as part of the review process Andy says they do.
Eustace Tilley November 18, 2011 at 02:38 PM
Andy, By recommending a budget increase of 1.7% the BOF has enabled the BOE to spend 3.8% more than it spent the prior year. The BOE is now able to move funds around from one line item to another and (as you stated earlier) the BOF does not have the authority to decide where that extra money will be spent. In other words, the BOF's recommendation opened the doors to increased spending of 3.8%.
Geoffrey Day November 18, 2011 at 02:56 PM
You can lead a horse to water, but...Look, folks, go to the BOE website, load the 2011-2012 approved budget, go to page 12 for total expenditures by school, see page 13 for totals by type of expenditure, and find line item breakdowns of expenditures by location starting on page 49: 2008-2009 Actual, 2009-2010 Actual, 2010-2011 Budget, and 2011-2012 Proposed. It's all right there in front of you!!!
Al Alper November 18, 2011 at 03:13 PM
Ed - the BoF did not and is not recommending a budget increase of 1.7%. It is only guidance for the Boards of Selectmen & Education such that "should" they choose to ask for additional funding it should be in that range. any budget they put forth will undergo the intense scrutiny this rendering of the Board of Finance has given each budget request and their respective line items.
Eustace Tilley November 18, 2011 at 03:28 PM
Well, Al, maybe we should ammend the BOF charter as it appears on the Town's website and pasted below for ease of reference: "Board of Finance By Town Charter, the Board of Finance consists of six elected members. Its primary function is to recommend a budget and a mill rate to the Annual Town Meeting. The Board of Finance also has the power to designate the external auditor and to approve supplemental appropriations upon the request of the Board of Selectmen or the Board of Education. The Board also must review bonding proposals prior to consideration by the Town Meeting. Connecticut General Statutes also grant certain powers, such as approving investments of Town funds. In fulfilling its Charter and statutory responsibilities, the Board of Finance exercises oversight of the Town’s finances. By ordinances the Board also appoints one trustee to the Wilton Employees Retirement Trust and one trustee to the Other Post-employment Benefits Trust for Employees of the Town and Board of Education. The Board also appoints one of its members to the Retirement Trust Investment Committee "
Eustace Tilley November 18, 2011 at 03:58 PM
Go easy on me Geoff, I am not as informed as you. I can't seem to find a comparison of 2010-11 budget vs 2010-11 actual nor can I find a comparison of 2011-12 budget to 2010-11 actual. Is it there? ETP AKA thirsty old mustang
Geoffrey Day November 18, 2011 at 04:14 PM
As I said earlier today, the 2011-2012 budget document did not show 2010-2011 Actual.
Andy Pforzheimer November 18, 2011 at 05:55 PM
Okay - The 2011-12 budget, for example, would be published in February, when the school year is only 60% over. It's far too early to have any intelligent "actuals" - there might be guesses, or YTD numbers, but no Actuals worth looking at. Even at final adoption in April, it's still far too early. The accounting for the Medical costs alone take until July. That's why the previous year is listed as the Budget number. When we look at the proposed budget, we look at Actuals from the several previous years, and where the PY Budget number shows a disconnect of some kind, we ask questions, or ask to see current year-to-date to understand the difference. In this way we compensate for the lack of PY Actual numbers. Not perfect, but completely understandable and justifiable. In years recently past we had a hard time getting Actuals from the several years prior to the current one. That is no longer the case. Looking at 2007-8 actual, 2008-9 actual, 2009-10 actual, and 2010-11 Budget is the best we can do.
Geoffrey Day November 18, 2011 at 06:21 PM
Sorry, you're absolutely right about the timing, Andy: the budget for a given fiscal year begins to be compiled during the fall semester of the prior (then, the current) year. I think last year's BOE budget document was exceptionally well-detailed. unfortunately, too many of the WPS Admin/BOE critics on this blog don't even try to find out what information is actually available before they post their comments.
Eustace Tilley November 18, 2011 at 06:35 PM
OK folks, I can understand the delay and I appreciate the recent improvement in reporting BUT please show me a report that compares a budget for a designated year to the actual spend for that year...knowing it has to be prepared AFTER the budget is approved. By line item. Is that really so hard to get after all the money spent on technology and administrators??
Geoffrey Day November 18, 2011 at 07:33 PM
When next year's budget comes out, it will have this year's actuals in it. And then you can then this year's budget and compare the two line by line. For all the agita you cause, why should they make it any easier for you?
Eustace Tilley November 18, 2011 at 08:08 PM
Consider me a share holder trying to ensure my investment in the town won't get flushed down the .... bathtub ... Shareholders demand a lot more reporting from publically traded companies than a simple spread sheet and get it as a result of legislated requirements...(I pay for it via reduced dividends) Its really not that much to ask for but the government meme differs from the private sector meme to a risable extent.
Geoffrey Day November 18, 2011 at 08:49 PM
You're the kind of shareholder whose microphone often gets shut off at annual shareholders meetings, which, to the town's credit, doesn't happen here. You have succeeded in making Milton Pohl look like an old softy, though, which is an achievement of sorts. Salud!
Eustace Tilley November 18, 2011 at 08:58 PM
Es ist schade, daß Sie Ihr Lob einschränken mußten
Geoffrey Day November 19, 2011 at 01:07 AM
You can't compare actual to budget until you have the actuals . The budget that was approved last May was for this school year. There were no actuals to compare at the time the budget was being considered. How hard is this to understand? Wie ein Holzkopf!
Geoffrey Day November 19, 2011 at 03:34 AM
I'd be afraid we'd start with the beer, move on to splitting hairs, and wind up splitting heads. Hmmm...Good night, WT.
Eustace Tilley November 19, 2011 at 11:09 AM
Well, first of all, GD would insist I pay for the beer and then complain his government glass is half full; I would say his government glass is 4 times larger than it should be and then he'd want to take half the tip I left for the waitress... (don't take it personally GD, its just another tax metaphor) :)
Eustace Tilley November 19, 2011 at 11:23 AM
Oops! (Perry again!) I forgot; he'd leave income tax bills for the brewery, distributor, bartender & owner, a sales tax bill, a tax on electricity, and I won't even mention the property tax bill among others... The poor guy might get high on taxes alone....jeez what a rush :)

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