Default Budget: exposing the shakedown

Guest Contribution by Arthur Green

Timberlane’s default budget is a shakedown of the taxpayer to ensure that the proposed budget passes.

By law, the default budget is the same as the current year budget, with addition of contractually committed changes (such as raises in collective agreements) and removal of one-time expenses from the current year.

Instead of following the law, the School Board approved an inflated default budget that is by my estimation $1.8 million higher than it should be if it were honest.

Donna Green and I have undertaken personal expense, as well as the risk of being saddled with TRSD legal bills, to require the district to be transparent about how the default budget was constructed.  We are asking for a line by line default budget.  All that has been released is a high-level summary sheet. We still hope for a decision in advance of deliberative, but I need to make the case in public as best I can with the information currently available.  If I am wrong, let the school district provide the proof by disclosing the information we have asked for through the courts.

Example 1: Salaries

The first line in the TRSD default budget summary reads:

1100-2490 Bargaining Unit Salaries, etc. $744,324

The budget contains 69 lines which are salaries.  It happens that if you add up the salary lines (excluding custodial) from the proposed budget (draft 2, 3 or 4) and subtract the current budget for those same lines, the difference is $744,324.  So the starting point for the TRSD default budget is 69 lines from the proposed budget – not the current budget as required by law.

This matters because the default budget includes about $100,000 for raises in the administrative and clerical salary lines which are not, to the best of my knowledge, included in the TTA or TSSU collective agreements.  I have removed those increases from my “Responsible Choice” default budget, and I would be happy to reinstate them if it can be shown that they are a contractual obligation.

Example 2: Special Ed Program

The third line in the TRSD default budget summary reads:

1200 Special Education Services $207,355

The Special Ed section of the proposed operating budget has 17 line items excluding salaries (covered above).  The sum of these lines in the proposed budget minus the same lines in the current year budget comes to a difference of $207,355.  In other words, the district’s “Default Budget” is simply the “Proposed Budget”.  This pattern repeats in many other areas of the budget.

By the way, for those eagerly seeking an excuse to slander the Greens as being opposed to Special Ed, please take a deep breath.  The amount for Special Ed in the “Responsible Choice” Default Budget is slightly higher than the TRSD budget.

Example 3: Euphemism Services

The 9th line in the default budget summary reads:

231x District Meeting & Other School Bd Services $11,000

In this category, there are only 4 non-salary lines which differ between the current year budget and the proposed 2017/18 budget:

• School board conferences:  up by $2,300
• Miscellaneous expense:  up by $5,000
• Dues and Fees:  up by $1,000
• Legal Services:  up by $10,000

So in the proposed budget, this category was up by $18,300.  But in the default budget, it is up by $11,000. Why is the default budget up at all in these non-contractual lines? I am going to take a wild guess that the administration wants another $10,000 in its legal budget even under default.  Note the irony of illegally raising the legal line in the default budget.  And then let’s throw in the dues and fees for a thousand.

There is nothing in District Meeting & Other School Bd Services which remotely satisfies the legal requirement to be included in a default budget as far as I can see.

This example should also demonstrate why the administration owes the public a line-item accounting of the default budget.  By trying to infer where the changes lie, I open myself to accusations that I have failed to understand how the budget is constructed, that I have misinformed the public, and that I have made unfounded accusations that the district failed to follow the law.  Perhaps the district will respond with iron-clad contract commitments to spend $5,000 more on miscellaneous expenses and $2,300 more on school board conferences.

What are my cuts?

1.  Salary

There is about $122,000 in salary which is identified as “additional” positions in the budgetary salary information which we received using Right to Know law, and which the Budget Committee was never given.

• additional Grade 5 teacher (full time)
• additional teacher – Interventionist (regular program) (full time)
• additional 0.4 Latin teacher
• athletic security monitor (part time)
• boys varsity assistant soccer coach (stipend)
• girls varsity assistant soccer coach (stipend)

These additions, along with associated FICA and retirement amounting to $27,000, have been removed from my Responsible Choice default budget.

Total salary reduction: $150,000

2.  Capital Improvements to sites and buildings

We all know the difference between fixing a faucet and renovating a bathroom.  The current budget includes $441,000 for maintenance and repairs, and $1.3 million for capital improvements to extend the life or enhance the use of sites and buildings.  The 2016/17 budget for site and facility improvements included projects such as

• metal roofing for a kindergarten addition at Atkinson
• science room cabinets at TRHS
• replacement of the gym roof at TRMS
• replacement of all the ceiling lights at the PAC
• resurface the parking lot at TRMS

These capital projects are clearly one-time improvements, and do not belong in a default budget.  The administration was able to determine that one particular project, improvement of the Sandown North Phys Ed field, could be removed from their default budget ($125,000).  I can see no rationale to remove that item while retaining appropriation for the other one-time projects in the 4200 and 4600 budget lines.

Total Capital Improvement reduction:  $1,175,000

3.  New Equipment and New Computer Equipment

The current year budget for new computer and other equipment is $243,000.  These budget lines are counted as capital purchases, meaning that the equipment has a lifespan of multiple years.  There is a separate budget allocation for replacement equipment, which is $609,000.  Although replacement equipment is also accounted for as capital purchases, I have retained replacement equipment in the “Responsible Choice” default budget, because it is logical that the district cannot operate properly if it is not funded to replace desks, copiers and computers that are no longer dependable.

Total New Equipment Reduction:  $243,000

4.  Replacement Equipment and Replacement Computer Equipment

There are specific items in the Replacement Equipment lines which were identified to Budget Committee during the prior year budget cycle as being exception items which could not be absorbed in the customary replacement budget.  I’ve previously itemized those items.

After removal of these one-time expenditures, the “Responsible Choice” default budget still funds $546,000 for routine replacement.

Total replacement Capital Equipment Reduction: $63,000

5.  Software Acquisition and Implementation

The current year appropriation includes a major upgrade to the district’s Infinite Visions business management software package. Installation services were budgeted at $38,000, which has been removed from the “Responsible Choice” default budget.  For some reason, the TRSD default budget retains $5,078, although there has been nothing in the budget for IT professional services for at least as far back as 2010.  Software acquisition added $38,000 to the current year budget.  The district wishes to retain this amount in the budget, although the recurring annual fee for the software (obtained using Right to Know) is $13,000 less than the initial license fee.

Total Software Reduction: $18,000

6.  Legal Budget

The legal budget for the current year was increased by $10,000 over historical levels to enable the district to aggressively obstruct transparency on issues such as the current debate over the default budget.  This exceptional condition should not be bolstered by additional funding to be used against citizen and taxpayer interests.  The legal line should return to its historic level ($70,000).  In contrast, the district wants to add $10,000 to the legal line in the default budget.

Total legal Services Reduction:  $20,000 

The Responsible Choice default budget includes 34 budget lines which exceed the TRSD proposed budget for a total amount of $604,000.  This money would be available through transfer of appropriation to mitigate shortfalls in other parts of the budget.

Conclusions

There are 240 line items in the TRSD budget.  My analysis is that 156 of those lines in the TRSD default budget, comprising 89.6% of the the expenditures of the district, are the same as the proposed budget. Some of this draws on educated guesses, because the district is fighting with taxpayer funds to prevent line item scrutiny of the default budget, but we know enough to know it is grossly inflated.

Timberlane voters are entitled to a default budget of $69,714,514.  This is $1.6 million less than the budget proposed by the school district, and $1.8 million less than the shakedown default budget voted by the School Board.

 This attachment shows

• The current year budget as adjusted by the school district for warrant articles passed in  March 2016 ($70,194,988)
• The TRSD Default budget for 2017/18 as I have inferred it from the summarized information presented to the school board in lieu of a proper line-item detail ($71,559,032)
• My “Responsible Choice” default budget ($69,714,514)
• The TRSD proposed budget as it will be presented to Deliberative, including the Draft 5 changes made in response to the Budget Committee meeting on January 12 following Public Hearing ($71,328,093)

 

 

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“Do the voters have confidence in Timberlane Superintendent, Dr. Earl Metzler?”

“Do the voters have confidence in Timberlane Superintendent, Dr. Earl Metzler?” 

This is a question you will find on the Timberlane School District ballot on March 14 (if left unchanged at Deliberative).  It is a Citizen Petitioned Warrant Article put forward by Danville resident, Shawn O’Neil.

Your school board was in exceptional form Thursday night (Jan. 26, 2017)  when 6 members got together in an emergency meeting to vote their recommendations on the two Citizen Petitioned Warrant Articles that will be on the ballot. Had I been in attendance, I would have argued against taking any board vote on any Citizen Petition, though, of course, it would have made no difference. (Dube, Green and Sapia were absent.)

Being fully aware that this petition is an opportunity for voters to voice their displeasure with our SAU’s leadership, each board member took greater pains than the last to pledge their allegiance,  gratitude, and appreciation for Superintendent Metzler and his work. It rather resembled a meeting of the Communist Party where the first comrade to stop clapping would be dragged from the room.

Generous raises, maximum bonuses, an early and long contract extension, and hiring Mrs. Metzler for six years apparently does not speak for itself. And don’t overlook the further vote of confidence the board demonstrated, if only they had known, when they purchased a $183,400 literacy program (Achieve 3000) from a company with which Mrs. Metzler was associated as a consultant.

None of that is enough for Mr. Collins who yesterday morning asked school board members  if they would like to participate in some unspecified demonstration of confidence in our superintendent. It will be interesting to see what other expenditure of public funds Mr. Collins will suggest to show our devotion to our superintendent. We’re already set to extend Achieve 3000 from our middle and high schools this year to the elementary schools next year.

The meeting lasted 35 minutes. I highly recommend watching it.  Jan. 26, TRSB meeting

I will soon be writing about their rehearsed arguments against the second Citizen’s Petition the board dealt with on Thursday night.  That petition asks the voters to require TRSD to change auditors regularly.

Spoiler Alert: your taxes

Guest Contribution by Arthur Green

The TRSD School Board and Administration love surprises, and the surprise they love best is the tax impact of the proposed budget.  This will be sprung on the public at Deliberative on Feb. 9.

Spoiler Alert: If you love surprises as much as your school board, STOP READING NOW.

Here it is:

We reported on this blog that the Budget Committee took the unprecedented step of reducing the proposed budget by $200,000 following Public Hearing on January 11 (BTW I am not aware that this reduction has been reported elsewhere, although the details have now been posted on the TRSD web site).

I had previously calculated the tax impact of the budget here, and so I am showing the difference between the tax impact of the newly changed budget, compared to the previous calculation prior to budcom reduction of $200,000.

The taxpayer relief of the reduction is modest at best.  Originally we were looking at a 7.9% average tax increase across the district, that increase is now 7.5%.  Town by town the change is similar.

Taxpayers should also keep in mind that the Support Staff contract (warrant article 4) will, if approved by the voters, add $181,323 over and above the proposed budget, which will effectively reverse the $200,000 budcom cut and reinstate the tax impact as originally calculated.

I am criticized for posting these tax calculations.  There is a simple remedy – the district should be providing this tax impact information, and it should be provided to Budget Committee in early December as part of their deliberation.

Should residents be outraged at the rising tax burden to serve a shrinking enrollment? Yes.

We should also be outraged at a Budget Committee which fails to insist on having this information for their deliberations.

We should also be outraged at an administration that withholds this information until it is too late for the public to act on it, either by reaching out to their elected representatives or by coming out to Deliberative.

The Battle Turns Ugly

Today Timberlane petitioned the judge to assess legal costs against Green.

TRSDs-motion-for-fees-1

The SAU uses two lawyers to my one.  Why not?  You are paying, after all.  And if not, perhaps I will pay.

Donations to the legal fund for this case are very much needed and can be sent “In Trust for D. Green” to : Richard Lehmann Law Office, 835  Hanover St., Suite 301, Manchester, NH  03104.  If we are awarded attorney fees, your donation will be returned.

$200k Cut from Budget: Here’s Where

It’s been a mystery until now.

After last week’s public hearing on Timberlane’s proposed budget for 17/18, the budget committee cut $200,000 from the budget.  That’s all we knew.

Rob Collins informed the board yesterday in an email (10:35 am, Jan 18, 2017):

Hi All,

After the Public Hearing the Bud Com met and voted to remove $200,000 from the bottom line of the proposed budget.  They did not specify where that money needed to come from and instead left it at the discretion of the Administration.  The vote to do this was 7-3, I voted against.

Attached is the detail of where the cut of $200,000 will hit the district in 2017/2018 for your information.

Please do not respond as this is informational only.

He also included a summary sheet of the cuts which I summarize:

• 1 teacher
• Sandown Central observation windows
• Classroom wall mount projectors
• Electrical work (outlets) for classroom wall mount projectors

The detailed accounting is trsd-budget-2017-18-post-publ-hearing-cuts

This list is actually extremely interesting. The budget committee left it up to the administration to cut those things the administration thought were the lowest of its priorities. (Does the giant red bull’s eye come to mind?)

Instead of laying off a teacher,(assuming that was a filled position), I would have eliminated the principal at Sandown Central, a school with fewer than 100 students. That would have saved $140,000- $150,000 in salary and benefits right there.

As for the technology cuts, please note that there is no evidence that these expensive projectors improve academic achievement.  We have them in our high school math classrooms. I asked to see some correlation between the installation of these projectors and an improvement in math scores.  Not forthcoming, of course! But, the school board was fine with saddling the taxpayers with more than $100,000 in added expense.

When hard decisions are necessary, your school board unfailingly errs on the side of spending money rather than managing wisely.  It is good to see the budget committee providing a small if rather tardy check on that irresponsibility.

Attorney Lehmann’s Court Submission Today

This morning, Richard Lehmann submitted an Objection to the District’s Motion to Dismiss our original suit.

His submission was given to the judge only moments before our hearing commenced. As a result, Judge Schulman did not have an opportunity to read it before the oral arguments.  He will get to it before his decision.

I include it here in hopes that you will read it now.  It is elegantly written and trenchantly argued.

objection-to-motion-to-dismiss

objection-to-motion-to-dismiss-exhibits

objection-to-motion-to-dismiss-exhibits-ii

Our Hour in Court

It is remarkable how pages and pages of written arguments can come down to 70 very intense minutes in front of a judge.

The Rockingham County Courthouse is a modern building with friendly dignity. That pretty well describes the attitude of all the staff I’ve had the pleasure of encountering there too, from the security guards who X-ray bags and briefcases, the helpful court clerks, and all the other assorted people whose job description I don’t know.

Observers, friends and members of the press assembled on the wooden pew-like benches in the courtroom this morning, neither deterred nor delayed by the snow. We were the first case called at 9 am. Richard Lehmann and I sat at a table in front of the judge and to his right.  James O’Shaughnessy, counsel for Timberlane  and Geoffrey Dowd, SAU employee, sat at a corresponding table to the judge’s left. None of the named defendants in the suit were present.

Judge Andrew Schulman also radiates an air of friendly dignity. Strangely, I was not nervous and became immediately absorbed in the judge’s questions, directed to Mr. O’Shaughnessy for the first 35 minutes. Mr. Lehmann was practically jumping out of his seat in eagerness to respond.  He was also given a good long hearing by the judge whose thinking-out-loud style of conversing with the lawyers was engaging and fascinating.

You never know what a judge will do in the contemplative hours before a decision, but we felt encouraged.  For one thing, the judge did not dismiss the case immediately as he almost certainly would have had he viewed it to be frivolous. He also seemed to take seriously our contention that elected officials do have greater rights with respect to public information than the limited reach of the Right to Know law. As for the default budget itself, and what level of detail should be provided to me, that seemed rather more unsettled.

One remarkable bit of information came from Mr. OShaughnessy’s argument.  He said his law firm advises many, many school districts around the state and they always tell their clients that school board members have no greater right to information than the limit of the Right to Know law.

Again, what is said in court and what ends up in a written decision can be quite different, but for those many wondering what happened this morning, let me say that I feel encouraged – and deeply grateful to Richard Lehmann for his unflinching commitment to this case.  His written submissions, the most recent one submitted this morning, are brilliant. I now have a good idea of what goes into preparing and responding to briefs and the intensity of the work is remarkable. I mean this not by way of the easy flattery school board members give at meetings to show how thoughtful they are, but out of a truthful understanding of the effort that has been poured into this case on my behalf and on behalf of taxpayers across the state should we prevail.

We hope to have a ruling early enough to be able to influence events at Timberlane’s Deliberative Session.

Donations to the legal fund for this case are very much needed and can be sent “In Trust for D. Green” to : Richard Lehmann Law Office, 835  Hanover St., Suite 301, Manchester, NH  03104.  If we are awarded attorney fees, your donation will be returned.

 

How We Practice to Deceive Part II

At Thursday night’s public hearing on Timberlane’s bloated proposed operating budget, Mr. Leon Artus from Atkinson and Arthur Green from Sandown asked some perceptive questions. Not a single member of the budget committee could answer them.  They were as basic as you can get, too.

Among the things asked after were:

• the number of staff budgeted for in the 17-18 budget, as well as whether the budget included vacant positions*
• what enrollment projections for 2017/18 were considered in preparing the budget.
• the number of children in full-time kindergarten paying tuition

School board member, Stefanie Dube (Danville) happened to have a sheet with full-time kindergarten details. I knew, and said at the hearing, that this sheet did not report the number of children who pay tuition. This salient detail has not been disclosed by the SAU, despite many requests by elected officials for this information.

The chairman of the Timberlane Budget Committee, Mr. Lee Dube (no relation to Stefanie)  couldn’t answer the questions either, but assured Mr. Artus and Mr. Green that the budget committee did review what was asked after and that he, Mr. Dube, would send them the responsive information the next day.

The next day Mr. Dube did send  Artus and Green links to the information on the budcom site. The only problem is that there is no information on the budcom site that responds to the questions.  For example, here’s the link which Mr. Dube provided for staffing information.  This folder contains no files more recent than January 2016 – a whole year ago.  There is zero information about staffing plans for the proposed budget year.

Similarly, the link responding to the question about enrollment projections contained only the annual reports of actual enrollment, with no projections for the budget year.

The budcom has no idea the number of full-time equivalent staff in the 17-18 budget.  Neither does the budcom have any idea of the projected enrollment for next year. This is, of course, why not a single member of the budget committee could answer those very simple questions.

Mr. Dube’s response in public view seemed like a forthright willingness to share information.  The implication was that the information was readily available to the public on the website – though strangely absent from the heads of individual budget committee members.  In fact, Mr. Dube was giving the questioners the run around and misleading the public as to the true nature of the budget committee’s (pitiful) deliberations.

*Mr. Cantone did speak to the vacant positions and said that Dr. Metzler had ASSURED the budget committee that there were no vacant positions in the budget. It was clear that the budget committee had no evidence to corroborate this assurance, however.

Who’s Up For A Fresh Round of Cost Per Pupil?

Guest Contribution by Arthur Green

The NH Department of Education recently published the Cost Per Pupil data for the 2015/16 school year which ended last June.  So it’s time to update our look at how Timberlane stacks up.

In context of debating the 2017/18 budget, this new data is very much in the rear view mirror.  The state defines Cost Per Pupil (CPP) in a way that’s intended to support reasonable comparisons amongst districts, but it depends on numerous factors not available until well after the end of the school year.  At the bottom of this post, I’ve included the DOE definition of CPP, suffice it to say that transportation and other costs are not included.  So, the CPP figure is much lower than the amount we actually budget and spend per pupil.

I also use the concept of “comparable”districts.  NH has so many tiny districts that averages across such differing profiles are meaningless.  There are only 10 districts in the state with +/- 4,000 students, a single high school and its feeder schools with unified governance for pre-K through 12.  Here’s the Cost Per Pupil for these:

A few observations:

In 3 short years, Timberlane’s Cost Per Pupil is up from $13,300 to $15,700.  That is a huge jump in a short time.

The District likes to do its Report Card comparison against the state average.  We’ve gone from being 1% below state average to 5% above.  If we were still 1% below state average (in 2015/16), that would be almost $1,000 per pupil lower cost.

The more meaningful point of comparison is the comparable districts.  The average CPP of districts with reasonable economies of scale is consistently below the state average.  But Timberlane is not only above the average for comparable districts, but by an increasing margin.  In 2012/13, our CPP was 7.6% above the comparables, by last year that had ballooned to 13.5%.

What does that number really mean?  Suppose that our CPP in the past year were still holding at 7.6% above the average of comparables.  That would be a CPP of $14,889, which is $800 per pupil less than what we spent.  This would imply a cost reduction for the district of $2.8 million dollars.  Oh, and we would still be outspending 6 out of the 9 comparable districts.

Remember, this is not arguing that there are no increases in costs.  The CPP of comparable districts has gone up over that time from $12,382 to $13,832, an increase of about $1,500.  But over the same period, Timberlane has gone from $13,329 to $15,695, an increase of $2,300.

And remember, all of these comparable districts have athletics, music and theater.  They all have employee health insurance and retirement costs.  They all have to fund updated curriculum materials and technology.

This is what runaway spending looks like.

Unfortunately, the CPP defined by the state does not help with budgeting a year into the future.

An alternate metric of per-student costs which can help us understand the year-to-year change in the resources our district is planning to commit is Gross Budget Per Pupil.  For the current year, the budget is $70,194,988.  The enrollment (minus tuition students) is 3,566.  Gross Budget Per Pupil is $19,685.

For 2017/18, Timberlane has a (currently) proposed budget of  $71,528,092.  We don’t know the enrollment next Oct. 1 – let’s get a feel for the range by looking at 3 cases:

• flat enrollment:  Gross Budget Per Pupil is $20,058
• enrollment up by 11 (administration estimate):  $19,997
• enrollment down by 47 (my “forecast”):  $20,326

We can say with some confidence that on the (currently) proposed budget, Gross Budget Per Pupil is very likely to be above $20,000.

As usual, context is everything.  Here’s the context on Gross Budget Per Pupil (note that I can’t use this for comparison with other districts, just year-by-year for TRSD):

For 2017/18, I’m charting a flat enrollment number (it will almost certainly be lower, which will push Budget Per Pupil higher.  I’m using the currently-published proposed budget to demonstrate the cost impact of that number – again, once the dust settles from Deliberative and voted warrant articles, we will have to revisit the final 2017/18 number.

Note on Cost Per Pupil -State of New Hampshire Department of Education

The Cost per Pupil represents, with certain adjustments, current expenditures from all funding sources (local, state and federal) associated with the daily operation of schools. Payments to other school districts and private schools have been subtracted. Revenues from the sales of lunches have also been excluded. Cost per Pupil is calculated by subtracting tuition and transportation from K-12 current operating expenditures, and then dividing by the average daily membership in attendance (ADM-A). The report “State Average Cost Per Pupil and Total Expenditures” identifies which expenditures have been included or excluded.

Education Crisis Isn’t about Money

Education Crisis Isn’t about Money

Thank you to the Union Leader for publishing this article.

The School District Governance Association of NH welcomes members who share our goals.  SDGANH.org for more info.