March 19, 2016
The Administration presented a plan to go on a spending frenzy of hiring and purchases, with an additional $1.1 million in new expenses. The Board and Administration are continuing to increase taxes to the maximum rate possible without a referendum. The administration has presented requests for 18 new Full-time and Part-time positions, only 4 of which were teaching positions.
$1.1 Million Spending Spree
On Tuesday March 8 the Finance Committee met. Business Manager Dan Carsley gave a presentation on the expense side of the first look budget for 2016-17. The presentation showed a comparison between the proposed budget and the 2015-16 approved budget. The budget projection includes an overall growth of 2.2%. However, this growth is in spite of a significant reduction in debt service costs as the district works down their outstanding debt. The funding required to support debt was reduced by over $2.0 million, yet the overall budget still increased by $1.9 million so the real spending growth is closer to $4 million or 4.6%. In previous meetings the Administration has cited growing cost pressures from retirement obligations (PSERS) and property reassessments (reducing tax obligations) that consume or eliminate funding. Taxes were increased in 2015-16 by 2.39% and are anticipated to increase by another 3.1% in the 2016-17 to keep up with existing expenses. In the face of all that, Mr. Carsley's presentation demonstrates a plan to go on a spending frenzy of hiring and purchases, with an additional $1.1 million in new expenses.
Tax and Spending Increases - No 5-Year Plan
The Board and Administration are continuing to increase taxes at the maximum rate possible without a referendum or exception to the Act 1 index. Projected spending for 2016-17 exceeds anticipated revenue, with the balance being made up by consuming the available general fund balance. Capital spending for 2016-17 has been reduced dramatically from an earlier plan by deferring all major investment in the existing High School Facility, pending a decision to potentially replace it that is supported by a carefully crafted study commissioned last year. Pressures continue to rise on revenue available for discretionary spending.
The Administration shows no indication of restraint in their appetite for new spending with this dramatic increase (see details below), coupled with future plans to add the cost of full day kindergarten. The justification available for the public (and even much of the board) to consider lacks any real substance. Finally they are unwilling to develop and publish a 5-year Financial Projection (as many other school districts routinely do) so that anyone can see where we are headed financially before adding significant new expenses.
We urge all taxpayers within the district to contact their board directors and insist that a comprehensive 5-year plan be developed before any new spending is initiated. Contact details are available here.
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18 New Part-time and Full-time Positions Requested
During the presentation, eight leaders of various functions in the district spoke individually about their requests for additional manpower. Each gave a short presentation to the board explaining in detail while they felt they should hire additional staff. This part of the process was commendable, but the justification details are not represented in any way within the slides that do little more than show what is requested.
There was a fair amount of discussion between the presenters and the 3 official board members of the Finance Committee. (A couple other board members were in the audience but did not participate in the discussion.) The Board will soon be asked to approve these new expenses on behalf of the public without the benefit of any of the supporting details relying on the recommendation of the Finance Committee.
It was not clearly stated which costs were one-time expenses, and which represented ongoing costs. It was also not initially explained what those ongoing costs would be. The discussion seemed to draw some of this out, and the Committee specifically asked for this to be clarified later. For example, replacing an existing vehicle is a single expenditure but adding headcount can be expected to continue indefinitely with salaries, medical benefits, and pensions that continue to rise year after year.
We found many of the justifications provided for the new expenses to be very weak. They would likely not hold up well if challenged further, especially if considered from the starting basis of an organization that is operating effectively and educating students to a high level. (AGSD currently ranks 68 in the state, and compares favorably to most local districts.) A number of the justifications provided were based on peak activity and short term challenges, which are potentially satisfied with selective overtime or sharing of duties with other job positions.
Listed below are the 18 additional staff positions requested, some key comments from the presentations, and follow up questions to consider.
The budget expense presentation is available via this link: