BRISTOL — Tax rates in some Addison Northeast Supervisory Union towns likely will increase in the coming year by a penny more than they otherwise would have as school directors, on the advice of supervisory union officials, try to rein in operating deficits for all six district schools.
ANeSU interim business manager Susan Jefferies shifted into high gear early this month to quickly draw up fiscal action plans for each of the schools after audits released at that time showed the official cumulative deficits that the schools had run.
From May 9-20, Jefferies met with each school board, walked them through their financial situations and future options, and presented a series of fiscal maneuvers to reduce deficits. Every school agreed to adopt her recommendations.
The actual cumulative deficits up until June 30, 2010, for each ANeSU school, which have accrued over the years, are:
• $326,489 for Mount Abraham Union Middle/High School.
• $220,321 for Lincoln Community School.
• $110,438 for Robinson Elementary School in Starksboro.
• $97,888 for Monkton Central School.
• $32, 913 for Bristol Elementary School.
• $2,731 for Beeman Elementary School in New Haven.
To begin reducing these deficits, Jefferies recommended two steps. Federal money from the Education Jobs Fund was earmarked to each school and tax rates will be increased (except for Bristol Elementary) to account for increases in the deficit line at the six schools.
Although voters approved school budgets on Town Meeting Day, Jefferies said boards still have room to make changes.
“The only thing that voters vote on is the amount of money to be spent in support of the school, so they vote on the total expense line,” said Jefferies. “They don’t vote on the revenue line and they don’t vote on the surplus or deficit line … they can and do change after the budget is voted on.”
According to Jefferies and Superintendent Evelyn Howard, deficits were caused by paper-thin budgets that only accounted for predictable expenditures. When the unexpected occurred — such as changes in health insurance plans, requiring substitutes for a principal on medical leave, and structural damage caused by a severe winter like this past one — deficits occurred.
“I think (the deficit) is being dealt with very responsibly by using federal money that we have,” said Lanny Smith, chairman of the Mount Abe school board.
“Things have happened that are out of our control … it happens to many businesses,” said Smith, who explained that he was losing money at the present because he budgeted for a painting job and then the price of paint suddenly spiked $3 a can.
“Wouldn’t it be great if we were always at zero every time? Yes. Is it going to happen? No,” Smith said.
Accounting for school budgets requires meticulous number work and estimations.
When a school runs a deficit one year, the budget that addresses this deficit won’t take effect until two years later because the current year hasn’t finished and the numbers from the current year haven’t been reviewed by an auditor. For example, a school that ran a deficit in the 2009-2010 fiscal year (FY10) — ending on June 30, 2010 — won’t receive their official audit until part way through FY11. So, school directors can’t address the FY10 deficit until the FY12 budget, which begins July 1, 2011.
At Jefferies’ suggestion, the ANeSU school boards this month tweaked their budgets for 2011-2012 school year. The most notable changes for each school budget are:
• For Mount Abe, the amount allocated to address the deficit in the FY12 budget increased from $111,363 to $124,893, which accounts for 0.9 percent of the total $13,280,147 FY12 spending. Jeffries indicated that this move will increase the present tax rate by one-fifth of a penny.
• The spending line in Lincoln’s FY12 budget for addressing the deficit grew from $73,765 to $94,655, which accounts for 5.5 percent of the total $1,733,545 FY12 spending. According to Jeffries’ numbers, the change will increase the tax rate by an estimated one cent.
• For Robinson, the amount allocated to address the deficit in the FY12 budget increased from $36,000 to $63,000, which accounts for 2.7 percent of the total $2,296,679 spending. The tax rate will increase an estimated one cent. An additional $28,425 in spending to reduce the deficit will be factored into the FY13 budget, Jeffries said.
• For Monkton Central, the amount allocated to address the deficit in the FY12 budget increased from zero to $24,000. The deficit line accounts for 1 percent of the total $2,328,997 FY12 spending and tax rates will rise an estimated one cent. Additionally, residents on Town Meeting Day 2012 will be asked to fund a three-year loan to pay off the remaining $133,698 in deficit that is expected to have accrued.
• The Bristol Elementary budget will remain the same, allocating $44,294 in spending to address the deficit, which accounts for 1 percent of the total $4,369,147 FY12 budget. Tax rates will not rise, and at the end of FY12 the Bristol deficit is projected to be zero due to aid from the Education Jobs Fund.
• For Beeman, the amount allocated to address the deficit in the FY12 budget increased from $26,451 to $29,209, which accounts for 1.7 percent of the total $1,714,013 FY12 budget. The rise in taxes is predicted to be negligible.
When will the increase in these tax rates be felt?
“It’ll be in your next bill,” said Jefferies.
ANeSU is required by law to submit its yearly expenditures to an external auditor. According to Howard and Jefferies the results of those audits would ideally be returned well before Town Meeting Day so the school budget presented to residents is calculated using approved numbers rather than estimates. This year, Howard said, audits came in two months after Town Meeting Day because they went out two months later than planned.
“We originally planned to turn in the materials in August,” she said. But since previous business manager Gregg Burdick and other staff were on medical leave for parts of last summer, those numbers were not submitted until October.
To prevent tardiness in the future, Howard said that ANeSU is requiring schools to submit their expenditures two-to-four weeks in advance of the previous August deadline. Also, new software will be incorporated into the budgeting process, such as an asset tracker, a budgeting module and a report-writing program.
To decrease spending in the future, administrators are working on expense sharing programs and there is talk that they might centralize management to consolidate financial responsibilities, like the supervisory union did with the Food Service Cooperative to keep better track of food spending.
A new business manager has been hired. Edward Gomeau is due to start at the beginning of July (See related story).
Howard said Jeffries has helped improve administrative matters greatly.
“Susan knows the system and has been able to help prioritize targets and identify areas to improve upon,” said Howard.
“I have no issues with our team at all,” Smith added. “We’ve got really good staff.”
Reporter Andrew Stein is at [email protected]