Forecaster Forum: Brunswick School Dept. fails to plan, plans for bailout

Mr. Ellis:

You’ve certainly cleared things up for me; thanks for that. I trust everyone else who sees your posts is similarly inclined.

In retrospect, I submit that everything in my article stands as written with the exception of this passage:

• Now the worst part: annual per-student costs have grown from $8,230 in 2004-2005 to $13,559 in the current year, an increase of $5,329, or 65 percent. The result is a cumulative cost of $176,000 this year, compared to $123,000 five years ago, and $93,000 10 years ago – an increase of 89 percent.

I made the mistake of assuming that budget figures closely align with spending figures; I should have known better.

That said, rewording the passage as follows corrects the passage:

• Now the worst part: budgeted annual per-student costs have grown from $8,230 in 2004-2005 to $13,559 in the current year, an increase of $5,329, or 65 percent. The result is a cumulative budgeted cost of $176,000 this year, compared to $123,000 five years ago, and $93,000 10 years ago – an increase of 89 percent.

Accordingly, I submit this revision to the readers who come here, though it is not possible to make the correction in print.

I grant you the point above, but hardly see it as undermining my overall premise, nor the fiscal trends in the Department. The majority of your elaboration has been to emphasize the terminology mistake just described .

Tangential excursions into ‘subsidizable pupils’ and similar EPS esoterics are largely irrelevant to the conclusions I draw in the published item, but do serve to expose the underlying budget strategy and how it obscures reality.

Had Superintendents clearly stated in their budget presentations to the Town Council and the citizenry that there is a budgeted set-aside against expected costs, this confusion might have been avoided. On the other hand, it might have emphasized the need for a summary balance sheet.

Late development: I understand that in the various fund balances in the Municipal Budget, for the year ended June 30, 2010, of the $8,082,597 that is restricted, $7,952,876 is restricted for education. Hence, the lack of total disclosure in the School Budget points to other amounts being tucked away in a less than obvious location. Why aren’t these figures shown in the annual school budgets?

So, summing things up:

- To the extent that I used hasty and unwarranted language in response to your postings, I apologize.

- I take from our discussion that it is the practice of the School Department to submit a budget with something like a 10% cushion to deal with uncertainties. One would think that provides sufficient cushion for a ‘crisis’ year such as the one before us, in which the advertised shortfalls are something like 7% of the current budget. Especially since more sizable reserves apparently have been banked.

- Since there are no balance sheets provided in the School Budgets, it is not possible to reconcile revenues against actual expenditures and various reserve accounts that might or might not exist.

- We have no way of knowing about such accounts. If it is the standard practice going in to apply a 10% cushion to ‘expected’ expenditures, it would be more transparent and forthcoming to state up front a ‘budgeted reserve amount’ of the dollar figure so planned. A “reserved fund balance” of $3,500,000 against budgets of $33,319,985 and $33,301,672 seems too round a number two years in a row to be the difference between budget and actual expenditures. It begs the question of what actual amounts might have resulted from that difference, and where they end up. Since no reconciled balance sheet is provided, we have no way of knowing, do we? Inquiring minds would like to know, and even worse, inquiring minds are prone to speculate in the absence of complete disclosure.

- I have requested actual spending figures per school year, and as soon as I receive them, I will calculate new figures that I will designate as actual spending per student year.

- It would be helpful if you were to provide details of all reserve account balances, whether they show in the budget or not. As compared to the municipal budget, the school budget does not show an assets and liabilities summary, at least that I can find.

- You will note that the Municipal Budget explicitly states various fund balances, and these amounts are accumulated over a number of years. I understand that many of these reserves are essentially required practice. Because of the absence of multi-year balance sheets in the School Budget, it is not possible to know how ‘reserves’ are handled year to year. And I’m not going to review budgets state wide to discern the SOP.

- We were told closing Jordan Acres was an imperative because of structural damage from snow overloading. Is it too much to suggest that could have been prevented by removing heavy snow accumulations before they reached critical stage?

- We must hope, of course, that the other schools, including HBS, which are primarily flat roof structures, are tended to more diligently, lest we have to replace them or invest major renovation dollars if a winter like past years occurs again.

- At the taxpayer level, ‘local appropriation’ is fungible dollars. They go into the revenue stream, and I assume are spent just like all other dollars. Saying they only pay for local students and not tuitioned students from other towns is irrelevant to this discussion.

- I stand by my claims in the article that the revenue shortfalls cited in information from the Department were entirely predictable, if not to the exact dollar.

- Durham tuition loss reflects a decision of several years ago, and a well known one. Presumably the Department knows which students are from Durham, and when they will leave the system and take their dollars with them.

- Stimulus funds were clearly one time money, and their receipt comes with clear presumption that they will not be coming again.

- Loss of federal impact aid is a similar item. Presumably, the Department is aware of the loss of military dependent students, and should not be ‘surprised’ by the loss of related funds.

- Not to mention, of course, that Durham tuition and in particular, the federal impact aid, are well below per student costs, and therefore present a windfall gain against the students they supposedly paid for. You chose not to acknowledge or discuss this.

- GPA, while not up to the levels all would like, has increased on a per student basis, and the effects of student decline are tempered by a sliding 3 year average. While I am not an EPS formula expert, you acknowledge the figures are enrolment dependent. I suspect they are also school plant dependent and employee dependent, but you can elaborate on that if you wish.

- Last year at this time, the early leaks from the Department were that the budget for the coming year was looking like a $36-37 million total. Even though budgets have been flat, more or less, for several years, enrolment has been in steady decline. We’ll see what the actual spending figures show.

- Loss of 90 positions is an unclear claim in my view. I have payroll information reported to the state for the three prior school years, and they raise doubts as to whether 90 persons disappeared from the payroll, or instead, 90 separate pay lines disappeared. I plan to dig further into the details, and compare teacher totals to enrolment to better understand circumstances. Student to teacher ration, etc, will be of interest .

- I assert that the school department is run on the basis that automatic salary and benefit increases for the teachers have priority over everything else, and that teacher compensation has no merit or performance component. The best teachers make the very same as the worst teachers (at the same ed level and year step), and this fundamental truth undermines all the rhetoric about an ‘excellent education system’ and the professed need to spend more to make it better, because you ‘get what you pay for.’

- Perhaps you can calculate the annual teacher compensation totals, and compare the increases to the elimination of sports funding, etc.

- I believe that the school department does not competitively procure its insurance coverage, and that a sizable amount goes to the MEA middleman to be used as a political advocacy fund.

- Looking at the most recent school budget, I note the absence of any reference to actual expenditures as context for budget proposals. Surely by the time a budget proposal is presented to the Town Council in May, expenditure data for a good ¾ of the current school year is known, and could be provided to establish a point of reference.

- As to the budgets provided to the public, they are absent any actual spending figures. In the current budget, there are typically 3 columns: 09/10 budget, 10/11 budget, and 11/12 budget proposal. There is every opportunity to provide actuals in prior years as a baseline for understanding, but from what you have described, that would clearly result in questions.

- Furthermore, if one goes to the municipal budget that summarizes all spending for the town, including the School Department, you will see school figures stated as ‘expenditures’ that come very close to budget amounts, except for the most recent year and the approved budget year.

- As to difficulty estimating enrolment, the current budget estimated a total of 2488 in October 11; that compares to 2,456 reported in October, which means the estimate for this year was pretty close to reality.

Mr. Ellis:

(Note: Mr. Ellis is a current member of the Brunswick School Board.)

Thanks for your extensive response. As you can imagine, I am quite busy keeping the bank of computers I use to generate false numbers and spurious arguments humming along. But I do wish to offer a timely reply to your efforts, and trust you will consider what follows in that regard.

Let me begin with the following. While you and virtually every other school board member I can think of, not to mention superintendents, are intent on shifting the problem elsewhere, it all begins and ends with spending, and the Brunswick School Department has an unblemished record in that regard. Nothing you say or do can change the recorded history of approved budgets and the enrolment reports to the state. Unless you wish to suggest that some or all have been falsified. Should you provide numbers (with sources) that correct those I have been collecting for more than ten years, I will be happy to consider them against the budgets, Department data, and state records I have relied upon.

That said, thank you for your kind explanation of the legislation in this area. Please note as well that the Maine State Constitution reads:

Article VIII. -- Part First.
Education.
Section 1. Legislature shall require towns to support public schools; duty of Legislature. A general diffusion of the advantages of education being essential to the preservation of the rights and liberties of the people; to promote this important object, the Legislature are authorized, and it shall be their duty to require, the several towns to make suitable provision, at their own expense, for the support and maintenance of public schools; and it shall further be their duty to encourage and suitably endow, from time to time, as the circumstances of the people may authorize, all academies, colleges and seminaries of learning within the State; provided, that no donation, grant or endowment shall at any time be made by the Legislature to any literary institution now established, or which may hereafter be established, unless, at the time of making such endowment, the Legislature of the State shall have the right to grant any further powers to alter, limit or restrain any of the powers vested in any such literary institution, as shall be judged necessary to promote the best interests thereof.
http://www.maine.gov/legis/const/

So let’s agree up front that the State’s record of complying with clearly written obligations is less than distinguished.

As to the initiative you cite, what it said on the ballot is a starting point, since legislatures are then free to do what they will with the language.

That detail aside, I would remind you that the initiative you refer to was passed with promises of 15% property tax reduction statewide; I know; I still have one of the signs. Note as well from your own sources that the education unions provided the majority of funding for the campaign. And I can remember Nick Mavadones, then an official at the MMA, and in more recent years, mayor of Portland, in the TV ads urging a yes vote and making the promise. You may also recall that this was the establishment’s offering to fend off the so called Palesky initiative modeled after California’s proposition 13.

I don’t know about you, but we’ve lived in our current house for nearly 15 years, and not once has our tax bill gone down that I can remember. And it is thousands higher than it was at the beginning.

I took a read through the statutory language, and found more than enough passages to confuse someone with a better mind than I. Some of them suggest that the figure the state is obligated to pay is less than 50%, not to mention any number of complexities associated with baselines, definitions, pension payments, etc.

The fact is, the GPA per student, whether it reaches 55% or not, has increased significantly on a per student basis. My figures show that it has increased from $3432 in FY 06 to $4765 in the current school year, an increase of 39%.

The fact is, the GPA enrolment figures are based on a sliding 3 year average, as shown in the appended statutory language. Given Brunswick’s precipitous enrolment decline, you should at least admit the state is cutting you some major slack here.

The fact is, the state pays for sizable sums for teacher retirement and retired teacher benefits, amounts not shown in local budgets in any form. So one could argue that the state is paying considerably more toward ‘education’ than you suggest.

Here is one relevant passage:

Beginning in fiscal year 2011-12, the annual targets for the state share percentage of the total cost of funding public education from kindergarten to grade 12 including the cost of the components of essential programs and services plus the state contributions to teacher retirement, retired teachers' health insurance and retired teachers' life insurance are as follows.
(1) For fiscal year 2011-12, the target is 49.60%.
(2) For fiscal year 2012-13, the target is 52.50%.
(3) For fiscal year 2013-14 and succeeding years, the target is 55%.

The fact is, that per student enrolment costs have grown exactly as I indicated.

The fact is, if per student costs had gone up by 5% a year since FY 05, our budget would now be $29.1 million, or $4,200,000 less than it is. I should think that an annual increase of 5% in “tuition” would be considered a generous growth rate by virtually any standard.

“You are mixing residential pupil expenses in FY06 (apples) with total budget approved per pupil in FY12 (oranges).”

Excuse me? I’m afraid you lost me here. Fruit salad aside, my standard practice is to divide the total budget by total enrolment to arrive at what I call ‘per student spending.’ If you have another way of calculating this, I’d like to see it.

The fact is that negotiations for a new teachers contract will begin soon, if they aren’t already underway; please tell me what you are doing to see that these costs are kept within reason, and that benefit costs are being restructured to be more in keeping with widely based employment norms. And what’s being done to see that the worst teachers don’t get paid the same as the best teachers. I don’t know what field you work in, but unless you consider yourself to be at the bottom of the performance scale, I doubt you would be happy with such an arrangement, or consider it ‘fair.’

Along those lines, please tell us what the Department is doing to see that the millions we send the MEA for insurance don’t include several hundred thousand to be used for political activism. And beyond that, what you’re doing to see that the insurance costs benefit from a competitive process.

The fact is that the overwhelming majority of budget increases over the years go to teacher salary increases, warranted or not, and benefits so generous as to make the average Maine taxpayer faint in disbelief. On top of the best job security one could hope for.

The fact is that just a few years ago, we had four schools teaching grades K-5, and we now have one school teaching each. If that hasn’t resulted in major cost savings, I don’t know what would, over and above the enrolment declines. Four school lunch services have been reduced to two; two fewer schools require bus service; classrooms per grade should be significantly lower due both to enrolment decline and efficiencies; support staff and admininstrative staff should be lower as well. EG, budgets should be lower, yet they have not declined.

I get that you are angry with the state and wish to drive all the attention towards Augusta and away from Brunswick. Perhaps that is why you chose not to address the other realities I mentioned.

As to your comment about ‘predicting numbers’ and the associated difficulty, no one had to ‘predict’ the loss of Durham students and military dependents any more than one has to ‘predict’ the age of their children in coming years. Influencing factors?? My goodness; they were a certainty, givens with entirely known effects on revenue from those sources.

Want to talk about trouble ‘predicting?’ Perhaps you should review the Planning Decisions studies that said Brunswick’s enrolment would rebound just like magic. And the predictions made to justify building the new school.

In particular, I note that you completely ignore the windfall aspects of the loss of military dependents and Durham students. Do you dispute that these students were not bringing ‘fair share’ revenue with them?

And my figures for per year student spending are accurate. For example, in the current year, the approved budget is $33,301,672. If you divide that by 2456, the enrolment reported to the state in October, you get a figure of $13,559.31.

As a member of the school board, I would have expected you to have up to date budget data. If you are unable to get the info you need, please let me know, and I’ll forward the budget files to you.

Readers can find the current year budget here: http://www.brunswick.k12.me.us/wp-content/uploads/2011/08/Approved-Schoo...

I refer you to page 2 in the document, though you may wish to become familiar with the rest of it as well.

To repeat, while you are intent on shifting the problem elsewhere, it all comes down to spending, and the Brunswick School Department’s are a matter of public record. Nothing you say or do can change the recorded history of approved budgets and the enrolment reports to the state. Unless you wish to suggest that both were falsified.

Anyhow, while I am pretty sure our philosophies on local education funding are diametrically opposed, I would encourage you to get better informed and to contribute more productively by helping to find actual solutions instead of just shooting the messenger or taking the annual swipe across the messenger’s posterior. Hopefully at the upcoming budget meetings, you’ll have accurate figures in hand.

I have no doubt however, that your ‘actual solutions’ will consist of spending however much more it takes to preserve the status quo, rather than reforming the enterprise to reflect economic, demographic, structural, and performance realities.

If you have the time, though, we’d love to hear what you and the school board have done and are planning on doing to improve student education in Brunswick, aside from giving the teachers annual guaranteed raises regardless of their performance or student outcomes. Suggesting that paying teachers more will yield better education for our kids next year than this year is an insult to the concept of teacher professionalism, and even worse, an affront to taxpayers.

Best regards,

Pem Schaeffer

PS: please tell us where the extra $5,329 we’re spending per student compared to FY 05 has gone.

PSPS: you can find ample commentary on the same issues from last year here:

http://othersideofbrunswick.blogspot.com/2011_05_01_archive.html

Feel free to offer your criticisms on the points contained therein; I will do my best to respond.

PSPSPS: Since you have a firm grip on Maine Statute, perhaps you can comment on this passage from §15671:

B. The annual targets for the state share percentage of the statewide adjusted total cost of the components of essential programs and services are as follows.
(1) For fiscal year 2005-06, the target is 52.6%.
(2) For fiscal year 2006-07, the target is 53.86%.
(3) For fiscal year 2007-08, the target is 53.51%.
(4) For fiscal year 2008-09, the target is 52.52%.
(5) For fiscal year 2009-10, the target is 48.93%.
(6) For fiscal year 2010-11, the target is 45.84%.
(7) For fiscal year 2011-12 , the target is 46.18%. [2011, c. 380, Pt. C, §2 (AMD).]

C. Beginning in fiscal year 2011-12, the annual targets for the state share percentage of the total cost of funding public education from kindergarten to grade 12 including the cost of the components of essential programs and services plus the state contributions to teacher retirement, retired teachers' health insurance and retired teachers' life insurance are as follows.
(1) For fiscal year 2011-12, the target is 49.60%.
(2) For fiscal year 2012-13, the target is 52.50%.
(3) For fiscal year 2013-14 and succeeding years, the target is 55%.