Budcom Surprise: 2.5% raise for all non-union staff slipped into budget

At the Budget Committee meeting on November 20, chairperson Michelle O’Neil asked a most insightful question.  Since the SAU staff got an across the board raise of 2.5% in the SAU’s 2013-2014 budget, did the non-union staff in the Timberlane district also get a 2.5% increase?  The district’s Business Administrator, Mr. Stokinger, replied, “Yes.”

Timberlane’s school board representative, Roger Barczak, immediately asked if the school board had approved or even discussed this raise.

Stokinger replied, “No.”

I asked the Budget Committee chair how she deduced this raise from the voluminous information we had been given.

“You can’t,” she said. “I just asked.”  [All dialogue is from my memory and not verbatim.] 

This is troubling indeed. Had it not been for Ms. O’Neil’s experienced intuition, I don’t know who of your elected representatives would have known about the 2.5% raise to all the non-union staff in the district. At the meeting I said this 2.5% surprise gave me “a crisis of faith” in the budget.  It is only natural to wonder just how many other untoward surprises are in the budget about which no one has had the smarts to ask a question of the Business Administrator. This situation is only aggravated by the fact that the Budget Committee receives a new draft budget at the beginning of each meeting rather than a week before to allow us contemplation and examination.

A surprise is bad, but the system that allows it is worse.

So here is my question:  What prevents the administration from giving as much of your money as they like to staff?**

In my miasma of ignorance and inexperience on the budget committee, I can’t see a single impediment.

A lively discussion ensued at the meeting about raises.  Ms. O’Neil made a passionate statement about the grimness of many people’s economic reality right now and the scarcity of raises in the private sector. I couldn’t have agreed with her more. She wanted to explore lowering the raises to 2%.  I advocated no raises at all. At this, Dr. Metzler said staff would be getting raises no matter what we did to the budget, he would make sure of that. He would find the money from somewhere.

Noble, indeed, I thought at the time.  What a fighter for his people! You cannot help but be impressed with this Superintendent’s commitment to his people and his mission. But then in the calm of my drive home, something struck me. The school board didn’t approve the raises.  They hadn’t ever discussed them. The budget committee  could theoretically disapprove the raises (not likely) and zero them out in the budget, but the administration will jolly well do what they please. It is a bottom line budget, after all, which means that the administration can spend your $64 million pot of gold any way they see fit and the lines on the budget do not mean a thing. OK, that’s the way it is.

In Timberlane, your elected representatives who are supposed to provide oversight are being pulled behind a runaway wagon of salaries, benefits and expenses. The Budget Committee as a whole were not inclinded to reduce raises.  What costs do we have both the power and the will to rein in?

Has this happened before?

Surfing through SpeakoutDanville.org, I stumbled upon an exchange from Jan.5, 2012 with this telling statement on the broad subject heading, “Does Timberlane have a Trust Issue?”

“My trust issues grew over the years in large part because of my experiences as a budget committee member. That made me painfully aware of how tightly administrations were able to control the flow of information to get the results they wanted.”  (Excerpt from a post by AlfredTwo)

Attempting to make a 2.5% salary increase  de facto in a budget without discussion by the School Board and potentially by the Budget Committee seems to fit AlfredTwo’s observation to a tee.

A raise isn’t just a raise; it’s an albatross of benefits

When the cost of a raise is worked out, rarely are the increases in benefits included in those calculation.  $30,000 added in a budget could easily become $50,000 when compounding and long-term benefits are taken into consideration. Timberlane is facing a large pension cost transfer from the state in budget year 13/14 , the equivalent of 1.3% of our entire district’s budget. We, the taxpayers, are guaranteeing a defined pension payment infinitely into the future for members of the New Hampshire Retirement System (NHRS), regardless of the performance of the underlying investments. This is known as a defined benefit plan and I defy you to show me one private sector employer who still offers this, yet this is what teachers and many other district employees still have.  NHRS has saddled us with a huge unfunded liability that threatens us all: New Hampshire has among the largest percentage of unfunded pension liabilities in the country. Giving raises without also adjusting benefits is rubbing salt into a gangrenous wound.

These days, a job is its own reward. We can no longer afford regular raises and benefits that far outstrip the growth of the investments underpinning them. The School Board and the Budget Committee need to put taxpayers first because if they don’t, eventually we’ll all end up like Detroit – or California without the nice weather.

For information about New Hampshire’s unfunded pension liabilities see:

Josiah Bartlett Center for Public Policy study on unfunded liabilities 2/2012

Pew Center State by State pension liability research–

State ranking of unfunded liabilities

P.S. Asking how I could have deduced this 2.5% raise, Mr. Stokinger, the Business Administrator, suggested it could have been gleaned from figuring out the percentage increase on a few lines in the budget… of the hundreds of lines in there and seeing, hey, this is 2.5% showing up a couple of times… could this be a consistent raise?  Forgive me:  either I lack conscientiousness or this defense lacks credibility.

**UPDATE:  At Budget Committee meeting on Dec. 3, Mr. Stokinger remarked that raises must be approved by the school board. This is a relief, but I have to wonder about the horse and the cart. Do you get BudCom to approve raises, perhaps without realizing it, then go to school board and say, ‘Hey, we have the money, we can give raises”? If that is the order of operations, who is ever going to say, “No, even if we have the money, I don’t think our staff should get raises.” If the money is there, raises will be given. That is obvious. It seems clear to me that the school board should first approve raises, then ask for them to be included in the budget, and BudCom will have to deal with that.

What Does a Million Dollar Increase Mean to You?

The Timberlane Regional School District draft budget is currently showing an increase of $1.6 million dollars over last year.  This is not a final budget and the expectation is that savings will be found and that this number, when final, will be lower.  How much lower, no one knows. What I do know, is that figuring out how much is at stake for a Sandown taxpayer in all this is not easy.

The Sandown Board of Selectmen’s Office kindly provided me with a useful formula. For any given cost to the town, this formula shows  how much money per $100,000 of assessed value will be added to the tax bill.  This may seem straightforward but there is a complication.  How much of a $1 million increase at the school district does Sandown own?  The BOS office told me we are responsible for 17% of the school district’s costs.  Using that 17%, a $1 million increase in district costs will add $28.30 for each $100,000 of assessed value.  Since the average assessment in Sandown is around $250,000, this means   $28.30 x 2.5  =  $70.75 for the average homeowner. (formula provided below)

Here is the catch.  Operating expenses and capital expenses in the district’s budget are charged to the towns at varying rates.  This is what the rates were last year:

Operating expense for Sandown that was 26.55%
Capital expense for Sandown that was 20.09%

Neither of these numbers is 17%, so I will be inquiring further about that figure. Additionally, it is necessary to know how much of the budget is considered “operating” and how much is considered “capital.” The vast majority of the budget would be operating expense, but I do not know precisely how much.  I will ask the SAU Business Administrator for this information, but until then let’s do a mental exercise.

Let’s suppose that 90% of the school district budget is operating expense.  90% of $1 million is $900,000.

Sandown’s apportionment of $900.000 would be 26.55% =  $238,950

Now let’s plug in the handy dandy formula:

1. MS-1 value of the town without utilities – line 23 of 2012 DRA filing:     $600,098,820   (from BOS office)

2. Take that value and divide by 1,000 =  $600,098.20
(600,098,820/1000)

3. Determine amount = $238,950

4.  Take amount and divide by value calculated above in line 2

($238,950/ $600,098.20) = .398

5. Take that new amount and multiply by average house values and divide by 1,000:
(.398 x 100,000) = $39818/1000 = $39.81
(.398 x 200,000) = $79600/1000 = $79.60

Since the average home in Sandown is assessed around $250,00, this means $1 million in extra school costs will mean at least

(.398 x 250,000) = $99500/1000 = $99.50 in new taxes.  I say at least because we are not taking into account the capital portion of the $1 million budget increase. Now, this giant figure is correct only IF our apportionment is closer to 26% than 17%, something that still needs to be clarified.  Someone close to the budget process cautioned me that all my figures are much too high.  Perhaps I am missing a vital piece of information.  Just note that all these calculations are preliminary until I can confirm them with Sandown and the SAU administration.  More to come…

But I think I’ve made my point.  On our first day in office, everyone on the budget committee and the school board should be given the tax impact for their town of a million dollar increase.

UPDATE:  I still have no clear indication of the most correct percentage figure to use in these calculations, but I have reason to think that the BOS figure does generate a number closer to what would be the probable impact. Still pending…(Dec. 5, 2012)

District Report Card Promised

The Timberlane School Board has promised to publish a “comprehensive district report card by the end of 2012.”  This announcement was publicized in School Board Notes, a flyer sent to households in the Timberlane district.  I got my flyer a few days ago.

The district report card , which is promised to be published annually going forward, is to include data about “enrollment, teacher salaries, test scores, cost per pupil, college acceptance rates and more.”  That is most welcome. Here are some suggestions for what I’d like to see  included:

•  The names of colleges and community colleges that accepted TRHS students and the number of students accepted to each.
•  Enrollment with trends past and projected vs. school-aged population  in the district (How many are opting for private school or in-home schooling?)
• Number of teachers per student; number of administrators per student, number of teaching assistants per student, and 10 year trend vs. enrollment.
• Cost per pupil vs. state average vs. Pinkerton Academy vs. private schools in NH (How much value are we getting for our education dollars?)
• Cost per pupil vs. enrollment numbers, ten year trend.
• Cost per pupil vs. TRHS average SAT math scores, ten year trend.
•  SAT scores by year for 10 years.  (This shows both the quality of education and the trend of improvement or deterioration.)
• District and SAU budget increases year over year for ten year trend.
• District in Need of Improvement and School in Need of Improvement history and status (for as long as these designations are available)

This would be a real report card to parents and taxpayers.

You can find a TRHS profile on the TRHS Guidance page.  It is missing 2012 SAT scores that were published in May/June of 2012.

http://www.timberlanehs.com/DOCS/TRHS_Profile.pdf

SAU Personnel Get 2.5% Raise in New Budget

The administrators who run the Timberlane and Hampstead School Districts have given themselves and their staff a 2.5% across the board salary raise, except for those who were deemed underpaid. The Assistant Business Administrator is being given a 6.7% raise and the Human Resources/ Office Manager is being given a 6.4% raise.  The Admin Secretary is also getting a 6.2% raise. Salary increases over the previous five budget years have averaged 2.8% annually.

Theoretically, the school boards should be controlling the SAU costs, but the SAU is a power onto itself and your elected officials who voted to approve these salary hikes have more loyalty to the administration than they do to your groaning tax burden.  Everyone working today in the private sector is doing more than they ever have before without the benefit of increased wages, job security and a lush package of benefits. At some point, taxpayers have got to insist that people on the public payroll share the same burdens of these financial times as the taxpayers. I am especially opposed to salary increases for already well compensated administrators and staff when our  resources should be going to effective teachers.

YOU CAN DO SOMETHING

The SAU’s budget still needs to go before a public hearing. In the past, this has been the sheerest of formalities, and in fact, no body, elected or otherwise, is required to change the budget based on a public hearing. But if even a few  citizens attend the public hearing to object, perhaps the Budget Committee will gain the courage to reduce the SAU’s budget funding by the salary increases.

SAU Budget Public Hearing:      

Nov. 14       7 p.m.  

30 Greenough Rd., basement level, back door.

You can see the SAU’s proposed 2013-2014 budget from a link off this page:

https://public.timberlane.net/sau/board/default.aspx

Note that “Conference and Travel Expenses” have increased from $10,000 to $15,000.  Where are these conferences, one might wonder.  Operating expenses have gone up 6.65% being driven in large part by increased employee retirement costs downloaded by the state – some of which should be assumed by the employees and not wholly by the taxpayers. Overall, the SAU’s budget for 2013-2014 has gone up 3.67%* to $1,352,057.   One and a third million dollars.  For administration. For declining enrollment. Bureaucracies only ever grow in size, reach and cost – unless your elected officials insist that they don’t.

Help them by attending the Nov. 14th meeting, or open your wallet a little wider every year.

For the salaries of Business Administrators in the state, see the Department of Education link:

http://www.education.nh.gov/data/documents/salaries12-13.pdf

* CORRECTION:  In the original post, I mistakenly said the budget increased by 4%.  In fact, the projected 2013-2014 budget increased 3.67%.  Thank you to Mr. Collins for pointing this out at the public hearing.