How the ANWSD cut spending by $485K
VERGENNES — Elizabeth Jennings, the Director of Finance and Operations for the Addison Northwest School District, showed up to the Nov. 18 ANWSD board meeting armed with a handful of budget-related documents — hot off the presses.
“This was literally finished today,” she told the board as she passed out sheets of paper. “It’s in draft form, so basically if you find a typo or anything, please forgive me, because it was a little bit on the rush.”
The documents were printed last-minute in part because some of the information contained in them was received last-minute.
Three days before, at a meeting of Vermont’s school district business managers in Berlin, the ANWSD Business Office had confirmed that implementation of the Act 173 special education funding model would be delayed by one year — to 2021–2022.
Maybe in a “normal” year this wouldn’t be such a big deal, but this year, in the ANWSD, nearly everything has turned into a big deal.
For months, the ANWSD had anticipated that it would need to cut $955,000 from next year’s budget in order to avoid incurring a tax penalty for exceeding the state-mandated per-pupil-spending threshold.
Consequently the school board proposed closing Addison Central School (ACS) and Ferrisburgh Central School (FCS) next year, in order to save money, but on Nov. 5 voters in those two towns rejected the idea.
Since then, budget projections and “true-ups” and revisions have evolved at a furious pace — partly because of a mad scramble to pinch pennies in ever larger quantities, and partly because of a constant stream of updated information.
“This is specifically the reason we are hand-carrying information to board meetings versus sending it to them with board packets the week before,” Jennings told the Independent in an email. “That gives us the opportunity to recalculate revenues or other information up to the last hour before the board meetings.”
Consequential as it was, the Act 173 update was only one of several dozen bullet points that contribute to the story of how that projected $955,000 shortfall was revised down to $470,000 over the past several weeks — a story of five steps forward and three steps back, with an indeterminate number of steps remaining.
The Independent asked Jennings to unpack the numbers and this is the story she told.
Last May the ANWSD Business Office undertook its 2020–2021 budget projection, using current-year budget numbers as a starting point.
“This assumed many factors, including estimates of what the district’s revenue would be, the number of equalized pupils, debt credits, the homestead yield and even the threshold set by the state,” Jennings explained.
Changes that went into the initial projection included increasing:
• Staff salaries by 3.25%.
• Health insurance benefits by 11%.
• Other benefits by 3.25%.
• Transportation costs by 3%.
• All other expenditures by 2.7%, based on the consumer price index.
At that time, the district also estimated a $242,000 decrease in special education revenue.
By August the district was projecting it would need to make approximately $955,000 in cuts in order to remain below the per-pupil spending threshold; if spending is a above a state-set limit district taxpayers would pay a penalty.
The administration then began developing draft worksheets for what came to be known as the “Do Nothing” budget.
Not cutting $955,000 would result in an estimated union school district tax rate increase of $0.18, the district warned — more than twice as much as last year’s rate increase.
GETTING TO $739,000
By the time Addison and Ferrisburgh voters went to the polls on Nov. 5, ANWSD administrators had already begun to “true up” the initial 2020–2021 “Do Nothing” projection, so it could create a draft budget.
One component of that process involved reducing 3.9 full-time equivalent (FTE) special education staff positions and 1.0 FTE Central Office support position.
“The Special Education reduction came as a result of writing the Special Education Service Plan due each fall to the Agency of Education, which involves anticipating student needs and planning for staff accordingly,” ANWSD Superintendent Sheila Soule explained to the Independent. “This change, along with the reduction of the Central Office position, was included before sharing the first ‘Do Nothing’ budget with the administrators (at their monthly meeting) on Nov. 5.”
The new working draft of the budget reduced expenditures by $343,000, including:
• Cutting the aforementioned staff positions.
• Cutting one bus route.
• Increasing Central Office rent by 13.5%.
• Increasing vocational tuition by 2.7%.
• Updating staff salary increases to 3.5%.
The $955,000 was old news now. It looked like the district would only have to cut $612,000.
But then new information regarding eligible expenditures for special education reimbursements arrived from the state, indicating that ANWSD revenues would decline by another $97,000 next year, Jennings explained.
The $612,000 suddenly increased to $709,000.
Then, as the 2019 audit process drew to a close, it began to look like there’d be a $30,000 deficit in the current year’s General Fund, which represented more money the district would need to raise next year.
The $709,000 became $739,000.
During that Nov. 5 meeting, the Business Office tasked all of the district’s administrators with providing feedback and analysis with an eye toward identifying further cuts.
GETTING TO $470,000
With that input in hand, the Business Office created the second draft of the “Do Nothing” budget, which was passed out at the school board’s Nov. 18 meeting.
Overall expenditures decreased in this draft by $183,000, including discretionary line-item cuts suggested by administrators — things like supplies, books, equipment, postage, software, dues, fees and field trip transportation.
These cuts reduced the $739,000 deficit target to $556,000.
The draft also included a $75,000 local revenue increase based on the recent Act 173 news.
At the same time, a FY 2019 audit update indicated that the General Fund deficit would be $11,000 less than previously thought.
The revenue increase reduced the target from $556,000 to $481,000, and the $11,000 deficit decrease further reduced it to $470,000 — where it stands now.
Not cutting $470,000 from next year’s budget would result in a $0.10 tax rate increase, Jennings predicted — down from a projection of $0.18 just weeks before.
She is now working on two alternative budget scenarios with a deadline of Dec. 9 — the next school board meeting.
It’s likely that, as she did at the Nov. 18 meeting, Jennings will wait until the last minute to print them out.
As she explained to a district resident in an email last month, “New information about our revenues usually starts rolling in from the state somewhere around the beginning to middle of December.”
Reach Christopher Ross at firstname.lastname@example.org.
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