“Unintended Consequences” are Neither for Stand Alone SAU Budget

Watching the SAU  meeting on October 9th you would think that the wisdom of voters this March to separate the SAU budget from the school districts’ budgets was the worse thing that could ever befall an SAU.  Members of the SAU and its board noted many times the so called “unintended consequences” of stripping out the SAU budget from the school budget.   (Mr. Barczak, Sandown’s own, thank you for not disrespecting the voters by joining that chorus and for offering two extremely insightful questions during the budget discussion.) I encourage everyone to watch the first 35 minutes of the meeting , but here are the controversial highlights in which everything that ails a budget is blamed on the successful warrant article.

1)  EMPLOYEE HEALTH BENEFITS UP BY NEARLY 50%

Last year’s SAU budget allotted $195,000 for health insurance for the twelve SAU employees, many of whom opt for a buyout.  This year the proposed budget is at a whopping $288,000 (round numbers). The explanation?  What if every member of the SAU who is currently taking the buyout suddenly decides to take the insurance?  We have to cover ourselves!

Dr. Metzler had this to say:  ” In the past, [the SAU budget] was a line item in a much bigger budget…  What you saw [in previous SAU budgets] was what we really spent…   This is a direct result of the warrant article that  passed  … we need to budget for total exposure at the SAU for what it costs to run the SAU. … in the past it was just a line item in a larger budget. Now it is a stand alone budget. So if everyone were to exercise that benefit, we would not have the money in the SAU budget to pay for it.”

The SAU admits that they did not in the past budget for the contingency of more people opting in to the insurance program.  They did not do this in the past but now must do it BECAUSE IT IS A STAND ALONE BUDGET.   This  implies to me that the SAU was dipping into the district’s budgets when they had a shortfall.  In fact, this is what they admitted to doing with the superintendent’s search.

Mr. Stokinger:  “If you recall, the recruitment costs [for the new superintendent] the SAU couldn’t afford. .. so I apportioned it to the two districts…. because we didn’t have it in the [SAU] budget.”  [Vimeo 18:30 and on.  My emphasis.]

So I’ll let you judge if this result  of the SAU having to fully document all its expenses in a stand alone budget is indeed an unintended consequence for the voters.

2) VOTERS WILL REJECT THE BUDGET AND VOTE FOR THE DEFAULT SAU BUDGET

Previously, the SAU did not have to prepare a default budget because their budget never had to stand before the voters.  Now it does.

Jason Cipriano, member from Hampstead, asked what would happen if voters rejected the now larger SAU budget in favor of the default?  Here is Dr. Metzler’s reply:

“…[W]e’d have to look at the money allocated for raises, we’d have to look at the insurance costs, and we’d have to take a look at what we have for personnel here but we’d have to respect the will of the voters and work within the budget that they voted for. We put together what we believe is a respectful budget.  I will say it, that warrant article drove up our budget.  That’s the fact. It also drove up the default budget. Direct result of that warrant article. …”

Now how does making a budget stand on its own two feet drive up costs?  It doesn’t, unless it wasn’t standing on its own two feet before, which we now know is what was going on.

Jim Stewart. another Hampstead member, adroitly noted that since both the budget and the default budget included extra money for insurance benefits: “Even if the budget got rejected, the default  still contains some extra money that may or may not be spent.”

Now default budgets are a funny thing, but they absolutely should not be stuffed full of unjustifiably large and indefensibly pessimistic expenses.  I don’t find that respectful in the least.

3) NOW WE CAN’T GIVE RAISES TO THOSE WHO DESERVE IT!

Dr. Hoppa:  “This is one of those unintended consequences of that warrant article passing… this warrant article takes away the executive power of this board that we’ve had very healthy debates …. as far as to how to assign executive raises and merit raises, for all the SAU staff . We lose that power due to the warrant article effectively… and now it limits our ability, depending on whether the voters accept or reject this, to provide appropriate feedback thru monetary awards…. ”

If voters, in their wisdom, reject a budget because the raises are too generous, their elected officials should take a message.  Rather than think voters stupid, they should view the result with some humility: “Hey, do you think a 3% raise every year might be too much?”

This year Dr. Metzler asked for a pool of money equivalent to an across the board 3% raise to award on merit.  Merit based raises are great, but a 1.5% pool is more than sufficient in my opinion.  But I’m happy to leave that up to the voters.  Clearly Dr. Hoppa isn’t.

So just what untoward unexpected consequences is the SAU complaining about?  Their raises will have to be subject to voter approval?  Their budget will have to fully reflect the entire costs of running the administration?

As for the large increase in insurance benefits, this is an insightful lesson in budgeting politics. The Town of Sandown budgets one extra insurance subscriber each year.  Given the uncertainty over Obamacare, maybe two new subscribers might be prudent for the SAU.  Anything more is padding the budget.  Watch the meeting here:   http://vimeo.com/76638920

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Filed under Budget 2014-2015, Budget Committee, Sandown Issues, SAU 55 Issues, SAU petition

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