Proposed Budget Approved - Synopsis

[distribution date - 4/29/09]

There are very few benefits to enduring a ten hour drive, which is what it takes to get to my daughter's college in western NY State. But, the morning following last Thursday night's special Board of Education meeting, at which some major steps were taken regarding the 2009/10 proposed budget, we were underway to Fredonia, and it gave me a chance to reflect upon what was said and done at that meeting.

For the sake of greater clarity, I am going to break my summary and my analysis into two parts, with this first part providing a general synopsis, and a subsequent second part providing some very specific information and comments relating to the subject of Full Day Kindergarten.

Of a somewhat general nature, dialogue among trustees is much better when it is free of ancillary considerations or contrivances. Therefore, I am going to ignore the somewhat treacly comments of one trustee, and the somewhat self-promoting comments of another trustee, and focus upon the substance of what took place.

First of all, the start of the meeting was delayed by a previously unscheduled Executive Session, at which the Board and cognizant Administrators were joined by Lorelei Stephens, who is the President of Elwood Teachers Alliance, which is our local teachers union.

The wonderful news is that the teachers union agreed to forego the scheduled 3% increase in their contract for 2009/10, which had been in effect since their three year contract was signed as of July of 2007.

That is real money, folks, and we should be grateful to the teachers union that their members will be surrendering approximately $500,000 of expense which was otherwise scheduled to be paid in 2009/10. They responded to calls all over Long Island that employees of school districts share in the sacrifice which most families have had to make since the severe economic recession began.

Now, for anyone who understands the structure of typical teachers contracts, this does not mean that every Elwood teacher will see no increase in their compensation, since it really depends upon where a particular teacher fits into the matrix of steps based upon longevity, and additional credits taken or degrees earned.

But some teachers will indeed have no increase in compensation, and all teachers will be sacrificing the 3% raise which they were otherwise due to receive.

This is a blessing for Elwood’s residents, and it will benefit Elwood’s students and the fiscal health of our district, as I will subsequently outline.

It would have been nice if we had also seen some evidence of sacrifice from administrators in the District, both from the central office and from the buildings, but I must admit that I don't know what compensation increase, if any, they were scheduled to receive in 2009/10. For now, all we know about is the significant sacrifice by our teachers.

Once that agreement had been reached in the Executive Session, it was then necessary for the Board to deliberate on how the $500,000 in savings should be applied, and this was far from a simple matter.

The first consideration was how to reduce the projected increase in the tax levy for 2009/10, which had been left at 3.99% as of the April 16th Board meeting, with a budget spending increase of only 3.37%.

As most of you are aware, even though the State was able, through the special assistance of the Obama Administration and Congress, to restore the aid to Elwood that had been scheduled for elimination, NY State is not keeping pace with increases in costs to school districts, and has not been doing so for years. We have generally had to fund more and more of our expenses through local property tax hikes made necessarily higher than historical ratios demonstrated.

The second consideration was how to restore the fiscal integrity of the Elwood School District, by building up our fund balance (think of the word “reserves” when you hear fund balance) which provides a cushion against future unanticipated fiscal burdens, such as the approximately $200,000 NY State took back from Elwood in 2008 as a recaptured overpayment of aid from prior years.

Elwood’s fund balance had dropped to $325,000, while the district would have been permitted, under State Education Department regulations, to have as high a level as 4% (this permitted level was increased by the State two years ago from 2%) of our annual budget. With a 2008/09 budget of $47.8 million, Elwood would have been permitted to maintain fund balance of about $1,912,000, and without that change we would have been permitted to maintain a fund balance of about $956,000.

Now, do not imagine that fund balance has no cost to you, since it does require a pre-funding, and that pre-funding comes from your taxes. But, the most prudent family does maintain a “rainy day fund”, and the trick is finding the balance between sufficiency and excess. If you are over the age of 40, you might recall the famed ad campaign for California Prunes, where the tag line was “Are three enough; are six too many?” Finding the right fiscal reserve may be as arcane as that ad campaign suggested, and there really is no absolutely right answer.

The third consideration was to examine some of the things that were carved out of the formative budget as it was being prepared by the District Administration and submitted to the Board. Included in that discussion were things like certain textbooks or supplementary material, as well as the proposed sharing of our Asset Sup't for Human Resources with the Harborfields School District.

I would be remiss if I failed to applaud the quality of the discussion among the five Trustees of our Board, who did not agree on every point, but who took principled and reasoned stands on various matters before them.

But I want to provide special praise for the integrity of two Trustees, Board President Mike Kaszubski and Board Vice President Joe Fusaro, each of whom had the courage to vote their convictions against approval of the Proposed Budget, as modified, which was ultimately approved by the Board of Education by a 3 to 2 margin. I am praising these two Trustees who voted “no,” even though I personally support this budget despite my great disappointment in the quality of supporting information which the Superintendent authorized for release, and in the lack of candor from the Superintendent about the Full Day Kindergarten consideration process.

With the reduced expense for the teachers, as a result of their bold action, partially offset by the increased expense for the Ass't Sup't for Human Resources, who would no longer be shared with Harborfields, and partially offset by increased spending for supplementary educational materials, and partially offset by the $300,000 increase to fund balance (think “reserves”), the new Budget to Budget increase was reduced to 2.33%, and the new projected tax levy increase was reduced to 3.66%.

Mr. Fusaro had consistently maintained that more of the teachers concession should be applied to reduce the tax levy further, since people in Elwood were already undergoing economic pain, and that is why he voted no.

Mr. Kaszubski had clearly and consistently and publicly, and he did this throughout the course of the past several months of budget work-up, called for Mr. Cenerelli to provide greater detail, hopefully in the form of a comprehensive analysis, of the Superintendent's proposal for Full Day Kindergarten for Elwood.

This focus upon clarity should also have been no surprise to anyone since Mr. Kaszubski, as well as Mr. Fusaro, and Mr. Ciccone, and Mr. Kaplan, had made clear during the 2007/08 school year, that they did not oppose Full Day Kindergarten, per se, when it was proposed by the previous Superintendent, Dr. Swart. However, they opposed the
badly structured and ill-conceived and risky proposal, as it was launched with great surprise by Dr. Swart in early 2007. Ultimately Dr. Swart, himself, withdrew the proposal and provided sound reasoning to district residents for doing so.

The superintendent of schools of any school district reports, under State law and State Education Department regulations, to the president of the board of education of that school district. When Mr. Cenerelli failed to produce what the Board President had consistently called for, Mr. Kaszubski’s only possible response, in order to maintain the integrity of the office of president of the board of education, and in order to fulfill his fiduciary responsibility to district residents, was to vote against adoption of the proposed budget.

Mr. Kaszubski knew, as did most of the residents in that room paying attention to the dialogue, that the proposed budget would be approved by a majority of the Trustees of the Board of Education, but he was making an important statement about integrity and responsibility.

I will save further comments about Full Day Kindergarten for Part Two of my summary and analysis, which will basically be devoted to that topic, and to the process for its further recommendation in 2008 for our 2009/10 school year.