2013-14 Proposed Budget Frequently Asked Questions
Q. How is a 2.99% tax levy increase within the cap?
A. When New York passed a property tax cap in 2011, elected officials touted the new state law as a “2% tax cap”. However, the law does not restrict any proposed tax levy increase to 2 percent—or any other amount. Instead, the legislation requires each school district in the state to calculate its own tax levy limit using an eight-step formula to determine how much they can increase their tax levy by. As a result, most school districts can raise their tax levies by more than 2% and still be within the tax cap.
Under the state's calculation for 2013-14, Averill Park Central School District has a lax levy limit plus exclusions of $ $27,525,611. This is our maximum allowable levy limit to pass the budget with a simple majority of voters (50 percent + 1). The tax levy proposed in the adopted budget is at this amount. That is why the proposed 2.99 percent increase in the tax levy for next year is within the property "tax cap" limit according to the law.The Board decided to cap the tax levy increase at 2.99% in an attempt to reduce the level of cuts that would be required to programs while still being mindful of our community’s taxpayers.
Q. What happens if the budget is not approved by voters?
A. The Board of Education has the option of putting another budget (revised or not) up for a vote in June or adopting a contingent budget. If the budget is defeated a second time, the Board must adopt a contingent budget. Under New York’s tax “cap” law, the contingent budget cannot result in a tax levy that’s higher than the previous year—a true 0 percent cap without any of the currently allowable exemptions (certain pension costs, court judgments and local capital expenses). For AP, a contingent budget would mean cutting an additional $798,233 from the proposed budget, which could result in additional reductions in educational programs and services.
Q: What is the Gap Elimination Adjustment?
A: Due to the Gap Elimination Adjustment (GEA), AP will lose another $3.4 million in the coming year, for a total loss of $13.4 million under GEA legislation. The GEA was first introduced for the 2010-2011 fiscal year as a way to help close New York State’s budget deficit. Under the legislation, a portion of the funding shortfall at the state level is divided among all school districts throughout the state and reflected as a reduction in school district state aid. GEA is money that is deducted from state aid originally promised to school districts based on state aid formulas. Essentially, it’s a "take-back" by the state of aid originally due to school districts. School districts across the state, including AP, have asked state leaders to remove the GEA.
Q: What is a fund balance? How is it used?
A: A fund balance is a reserve much like a homeowner’s savings account. Just as homeowners are careful not to use up their savings accounts, school districts also must plan carefully how they use their fund balance to ensure it does not run out. When a district’s expenses are less than what was expected or revenues are higher than expected, the money is held in the fund balance. The money is can be used for unforeseen expenses throughout the school year. AP does not have a substantial fund balance to help compensate tax increases. Currently, the District expects to ends the fiscal year with an unappropriated fund balance of about $1,069, 786, or two (2) percent of the proposed budget, well below the four (4) percent limit allowed by state law in an unrestricted fund balance.
The following questions/comments are stated as provided to Superintendent Hoffman with answers provided directly by Dr. Hoffman.
Q. Can the school release actual expenses?
Budgeted numbers are nice, but are just that, budgeted numbers. They tell us nothing about actual expenses and prevent any meaningful analysis of whether the budgeted number for the following year is good, bad or indifferent. For a proper budgetary analysis I need to compare actual expenses for the 2012/2013 school year to the proposed budgeted numbers for the 2013/2014 school year. I realize that the 2012/2013 year isn’t completely over, but the finance dep’t should be able to project out the final 2-3 months of the year pretty accurately.
A. Actual expenses have been released and discussed at BOE meetings. It is done every year. The "actuals," as they are known, are not something that are very useful until near the end of the year. I will tell you that at this point, it looks like we will spend about 99 to 99.5% of our 2012-2013 budget.
Q. Over the 09/10 thru 13/14 period, Contract Electric & Gas expense has declined by 39.5%. A) What is Contract E&G, B) What is driving the decrease and C) Is this sustainable?
A. The Contractual Electric & Gas declined because we received a bid for these services below what we had budgeted for 2012-2013. It can be sustained at least until this contract with the service provider expires. At that point, we go out to bid again for the best price we can get, as we do for every item on which we bid.
Q. Over the 09/10 school year to the projected 13/14 school year the cost for liability insurance has increased by 27.5%. Why? Has the school shopped the policy?
A. We have and will again "shop" the policy. However, there are very few companies (2) that are certified to offer the breadth and scope of a policy required by law for NYS public schools. That is the estimate we received, but will work on getting a better price prior to signing on for 2013-2014.
Q. What is “Instructional Column Changes?” Over the past 5 years, $710,000 was “expensed” for this. Not sure what spending on “Column Changes” constitutes. A less charitable person might call this a “fudge” column.
A. In the teacher contract, there are "columns" that are set up based upon the number of college and professional development credits teachers aquire. If a teacher increases his/her credits or degree by certain levels (for example, getting a master's degree, getting 30 or 60 credits beyond a master's degree), there is a change in their salary as they move to a new "column." The number we used is an average of what was paid over the past few years.
Q. What is the $551,475 of expense for Private School Tuition? Over the 09/10-13/14 period, over $2.9M has been allocated to this account. Is this required by the State? Given the financial straight the District finds itself in does it make sense to spend over 1% of the Operating budget on, what I assume is, a small select group of children while the vast majority of District students are experiencing cuts in the overall program? Can the District decline to participate in this program?
A. Some students with disabilities are not able to function in a regular public school setting, and we are required to provide an appropriate setting for every student. In the vast majority of these situations, they are students with severe physical, emotional, or developmental delays, and it would cost us more to hire the varied staff necessary to work with the students than the tuition to send them to a private institution. As expensive as it is (and it is sometimes as much as $60K per year per student) it is still cheaper than hiring the 2-3 staff members needed to deal with the particular student's disabilities.
Q. Similarly, why the constant spending on Private School textbooks? Is this required by State Law? Over the past five years, the District has spent $127,000 on private school textbooks. In fact, spending on private school textbooks accounted for 9.5% of all textbook spending done by the District in 12/13 and is projected to be 8.5% of all textbook spending in 13/14. It is inconceivable to me that nearly 10% of the District’s children attend private school that the District must pick up the textbook expenses.
A. We are required by state law to provide textbooks and transportation for any student who lives in the district who attends a private school.
Q. Are bus attendants required by the State?
My understanding was that the busses are already equipped with cameras. Although the expense has declined over the 09/10 – 13/14 period, annual bus attendant expense is still in excess of $250,000.
A. Most of the bus attendants are there to assist students who are physically disabled and need 24/7 attention. It is necessary for their well-being and guarantee of safety. The cameras are useful to address situations "after the fact," but if a disabled student who has a breathing tube needs assistance, obviously a video of what happened later is of no use in the moment of the emergency. The cameras are there regarding discipline situations and to sort out the "he said, she said" of a normal problem on the bus.
Q. Why is workers comp expense projected to nearly double year-over-year? Counter-intuitive given that there has been zero change in the style of work performed by workers in the District, the number of district employees has declined over the years, and workers comp rates actually declined in 2012.
A. Insurance is based upon what has occurred in the past, and what is likely to occur in the future. Our number of worker's comp claims have risen in the past three years due to unexpected situations that can not be anticipated. If your car is hit in a parking lot, your insurance may go up, even though it is not your fault and there really was nothing you could have done to keep it from happening. Our situation here is similar to that.
Q. Along the same lines, why the significant changes in unemployment insurance expense? From $71,000 to $596,005 to $45,000 in three years and now projected to more than double in 13/14? From what I can find, the major employee reductions occurred in 10/11, 12/13 and 13/14, with the largest in the 12/13 period. If accurate, the yearly expense items would not seem to reflect experience.
A. Our unemployment costs are due to the large number of staff that have been excessed over the past four years. We have reduced by over 75 employees, and are required to pay unemployment insurance for all of them.
Q. With the decline in employees shouldn’t the growth rate in NYS Teachers Retirement contributions be declining, not accelerating? Please explain the cause and drivers behind the continuing increase in the rate of growth.
A. Pension costs are set by NYS, and we have no control over it. The biggest factor is the performance of the stock market. The numbers we get are based upon the performance of the stock market two years prior to the current year. So, our pension costs are based upon the performance of the stock market in 2010, which as you know, was not a good year for the market. Also, with the large number of teachers laid off since 2009 statewide, the pension payments to retirees is split between fewer employees, which causes the per-person cost to rise. Our pension costs have doubled since 2009, and are up 1200% since 2002.
Q. The District used to provide statistics on student population by grade level. Is this data still available? If not, can I get the overall student population from 2000 through now?
A. We do have student numbers over the past ten years. I can give you a quick snapshot of them. They have first risen, and then fallen in the past 10 years. We reached an all-time high of approximately 3500 students in 2007, and have slowly reduced since that time. We are currently around 3180 students. The chart is as follows:
There is noting in particular causing the decline other than the end of the "echo boom" (the children of baby boomers are just about out of school), and the overall decline of population in the county and most of upstate (Saratoga County is an exception).
Q. What happened to "Equipment" in the line item budget in 12/13 and 13/14? District had been spending $20,000-$50,000 annually in the three preceding years but I can't find any mention in 12/13 and 13/14.
A. It was reduced this year to save money. There were no immediate needs, so no equipment was budgeted to be purchased.
Q. Equipment repair has been trending down over the period, which is good, but counter intuitive if the District is spending less on new equipment. Thoughts? Also, relating to my plea for actual numbers, over the five year period computer and av repair has been the same number ($51,000) each year. Would be very surprised if that was actually the case. And Athletics equipment repair has been the same $8,300 every year.
A. The repair budgets are the same through reductions. We are cutting corners more, so these line items are held at the same level until such time as it is not possible to do so. We were able to reduce our bus repair line item through the purchase of the new buses last fall.
Q. What is up with Copier Lease/Network Printer lease expense? This has run over $125,000/yr over the period. If I take the projected expense for 13/14 of nearly $127,000 and assume a $0.03/page cost, that's nearly 4.3 million copies or 1,367 pages per student! What happened to a "green" District?
A. Schools run on paper. It is very difficult to reduce that, but one way we are going to attempt to reduce paper use is the intent to put wireless internet district-wide for student use. If the building proposition passes, we are going to institute a "bring your own device" policy for students, which can have a great reduction in paper. Also, the NYS Education Department has reduced their paper costs by sending everything to us electronically, which means WE need to print it out, instead of them doing it. It really isn't going green, as much as passing the cost along to schools.
Q. Student population versus Budget - Although student numbers are down 9.4% since their peak and the overall employment in the District has fallen by 75, the overall budget has not shown anywhere near a corresponding reduction. Why? No new capital projects over the time frame. Inflation has been relatively modest over the period. Is it mostly (all?) due to staff salaries and benefits? If so, does that not suggest the Board needs to be extra vigilant in future contract negotiations?
A. It is a combination of many factors. Our salary line items have been relatively flat or declining, but unfunded mandates, healthcare costs, and pensions have had a huge impact upon our budget. Also, fuel and utlility costs have risen. However, we DO need to be vigilant with our personnel costs overall.
Q. By decreasing the hours of kindergarten, how much is that actually saving in light of the fact that there still has to be pay involved for after school hours care and the supposed $20,000 for running of additional buses? Originally it used to be 1/2 AM 1/2 PM = 1 FTE. Are all of the K teachers taking cuts?
A. By reducing the kindergarten hours, we are saving approximately $220,000. The 9 kindergarten teachers will have an additional two hours each day after the students are dismissed. The 18 hours a day available will be used to reduce three teachers who are working with students providing additional assistance in language arts and math. The kindergarten teachers will take over that responsibility each day. Also, since there are now fewer art, music, and PE classes in the elementary schools each week, we are reducing those areas by approximately .2 of a full time teacher in each area. We do not pay for any after-school care, so there are no district costs involved in that area.
Q. I did not realize there was a separate line item for Kindergarten Music and Art ... isn't that covered by the normal teacher even in a half day class?
A. Art and music are programs that have their own staff who teach all students in the elementary schools. We have a music and an art teacher come in to each class each week to teach those areas, which is a part of the art and music budget. The proposed budget will reduce those areas, and the funding will be reduced from the budget. These are listed as a portion of the reductions in art and music, as well as PE.
Q. If there are 13.5 FTEs cut from teachers, yet the expenditure for salaries is up, what percent raises are the teachers getting and what is the average salary of a full time teacher in the Averill Park School District?
A. The increase in the total salary line items for teachers is up 0.2% for the coming year. This is due to "step" increases, which vary based upon where in the salary schedule the teacher is, based upon, their experience. We do not compute average salaries, as there is no purpose in our computing it. However, the Capital District Business Review listed our median salary for 2012 as $60,358. Of course, as younger teachers are reduced, the average salary rises.
Q. Assuming most of the attrition is due to retirements, wouldn't that be the highest level of salaries leaving?
A. It is not a correct assumption that most of the teachers leaving are due to retirements. In fact, fewer than half are due to retirements. Some of the teachers who are being reduced have 5 or fewer years of experience in the district.
Q. How can you say spending is decreased, when it is actually up?
A. Spending for the coming school year is reduced, for the fourth consecutive year. Our total proposed budget for 2013-14 is $53.49M. Our current budget for 2012-2013 is $53.50M. That is a reduced budget. Here are the numbers for the past four years:
Q. How much is spent on supplies for teachers and staff and if that is not all spent, where does that money go to, because it repeats in subsequent years?
A. The amount spent on supplies changes every year, but overall has been going down for the past four years. Any funds not used in a budget goes back into the "general fund" at the end of the current fiscal year. Funds are not permitted by law to "roll over" into the following school year.