Sandwich FinCom Questions Superintendent’s Budget
By: Mary Stanley
Superintendent of Schools Mary Ellen Johnson went before the finance committee this week to answer questions about an apparently overbudgeted utilities account, encumbrance money, and why the school department does not return more than a few thousand dollars from its $30 million budget at the end of each fiscal year.
“The town returns a considerable amount of money to the coffers each year and that gets split out again between the school department and town. The school department does a good job of spending its budget down. Somehow, a multi-million dollar budget comes down to just a few hundred or a few thousand dollars and we still see money being returned on the town side,” said Chairman of the Finance Committee Glenn S. Paré.
“We are operating very effectively. We are operating within the law. When you are operating on a 1 percent budget when you really need 6 percent to meet contractual obligations, we are highly effective,” Dr. Johnson said.
Finance committee members questioned why the school department budgeted $1.8 million for utilities in its current budget when the actual costs in the past fiscal year were just $1.3 million.
Dr. Johnson explained that when she builds the budget, typically in November, she is basing her projections on actual costs averaged over two years.
“I understand the two-year cycle, but I just want to point out that the actual cost in ’09 was $1.3 million and this year you’ve budgeted $1.8 million. That’s a 35 percent increase. That seems high,” said member of the finance committee William Diedering III.
“It seems awful high to me and it could give the perception that you are putting extra in there to be used some place else. I’m suggesting you may want to budget a little closer,” said committee member Thomas R. Hickey.
He added that the school department could get a history of its expenses from utility companies to get a better handle on how much to budget for this account.
School Business Manager Michelle J. Austin pointed out that an analysis was done showing that the account should be budgeted for $1.5 million.
According to the history of the utilities account handed out by Dr. Johnson, in Fiscal Year 2010, she budgeted $2.039 million for utilities but the actual costs that year came in at $1.038 million. Dr. Johnson said the nearly $1 million overbudgeted for this account was used to offset reductions in Chapter 70 money from the state and Circuit Breaker funds, which are applied to the school department’s Special Education costs.
“Last year we realized we had a loss of $640,000 from Circuit Breaker and $100,000 in Chapter 70,” she said.
Dr. Johnson also pointed out that there was a nearly $300,000 drop in actual energy costs between Fiscal Years 2009 and 2010 and explained that the savings were realized by turning off unnecessary lights and negotiating lower rates with Cape Light Compact.
“Savings is wonderful but you’ve gone and used that for something else,” said Mr. Hickey.
“We all applaud the savings except that the savings goes somewhere else,” said Mr. Paré.
“The more flexibility you have, the better it is. You are buying things for the education of the children. As long as the savings is not going to frivolous things, it’s fine. It would be nice to see some of it coming back to the town,” said committee member Ellen R. Yaffe.
As for the $2.3 million that was encumbered at the end of the last fiscal year, Dr. Johnson said the majority of this money, $1.756 million, is for salaries. An encumbrance is money that is set aside for costs incurred in one fiscal year but not paid out until the following fiscal year. Dr. Johnson said because teachers collect paychecks throughout the summer for salaries earned in the previous fiscal year, that money must be set aside.
Dr. Johnson further pointed out that the school district has been able to maintain programs, even adding a few programs, all while working within budgets that have been reduced.
“We’re doing a great job. We’re really doing a remarkable job with what we have. We’re really making good use of our dollars,” she said.
“The best part of this evening is that we had a conversation. I really appreciate that you came tonight,” said Ms. Yaffe.
Dr. Johnson will meet with the finance committee again before the next budget planning season gets underway to discuss net school spending, which is the total funding contributed to the schools by the town, including any services that the town provides.