At the direction of the Board of Finance the Woodstock Board of Education cut their proposed 2008/2009 budget by $50,000. At the special meeting on Thursday, April 10th, Superintendent Baran articulated three options for reducing the budget by the required amount.
The Superintendent, Dr. Baran, produced three options for the Board of Education to vote on. His recommendation was to choose Option III which was an option to lease-purchase a large bus rather than purchase the school bus outright. He noted that he doesn’t like the idea of financing the purchase, but by doing so the district would be able to accomplish the mandated reduction, not run the risk of under-funding the health insurance account and would minimize any negative impact on our students (the latter two were the other options). The members of the board voted unanimously to accept the Superintendent’s recommendation to achieve the reduction mandated by the Board of Finance.
The three options were as follows:
Option I
The first option was the most detailed and involved many reductions and/or cuts most of which had direct impact on student. Those reductions and/or cuts are as follows:
• Reduction of 1 tuition to ACT (anticipated 6 enrollments but have only 5 applications)
• Remove cost of Lighting Supplies
• Remove cost of WES Computer Software (Discovery United Streaming Subscription, Acronis Universal Restore, Expression Web Software)
• Remove cost of WMS Computer Software (Discovery United Streaming Subscription, Acronis Universal Restore, Expression Web Software, Finale Music Software)
• Remove cost of Fireproof Filing Cabinet (1)
• Remove cost of File Cabinets for permanent student records (2)
• Remove cost of Cameras for Gifted/Talented (3)
• Remove cost of Video Cameras for Computer Teacher (4)
• WES – Reduce Network Support & Regular Repairs
• WMS – Reduce Network Support & Regular Repairs
• WES – Reduce Technical Supplies
• WMS – Reduce Technical Supplies
• WES – Deduct cost of Removing Carpeting/Tiling from 2 rooms
• Remove Curriculum/Assessment writing
• Remove cost of Grade 3 CMT Math Practice Books
• Remove cost of Grade 4 CMT Math Practice Books
• Remove cost of Grade 5 CMT Math Practice Books
• Remove cost of Grade 6 CMT Math Practice Books
• Remove cost of Grade 7 CMT Math Practice Books
• Remove cost of Grade 8 CMT Math Practice Books
• Remove cost of Grade 8 CMT Open-ended Questions Workbooks
• Remove cost of Radios/Chargers (4)
• Remove cost of WMS Repairs/Maintenance – Painting Classrooms
• Remove cost of WMS Repairs/Maintenance – Bathroom Partitions
• Remove cost of WES Computer Equipment Hardware – Firewall & Filter
• Remove cost of WMS Computer Equipment Hardware – Firewall & Filter
• Reduce cost of WES General Classroom Supplies by $10 per student
• Reduce cost of WMS General Classroom Supplies by $10 per student
The total dollar value of these reductions and removals comes to the $50,000 required by the Board of Finance. There were some questions from board members and some discussion regarding the direct impact on students and the teaching environment. (I am certain of the questions and discussion, but uncertain as to whether it came at this particular juncture or later in the superintendent’s presentation.)
Option II
Dr. Baran continued with two other options that could be considered by the board. The second option was to under-fund the health insurance fund. This was a practice engaged in some years ago. However, the health insurance fund has been fully funded for some time now. By Dr. Baran’s calculation the BOE could choose to level-fund health insurance (not acknowledge the 5% cost increase) and accomplish the $50,000 budget reduction in that manner.
Option III
The third option was to lease/purchase one of the buses in the budget as opposed to outright purchasing. Since the cost of transportation in this year’s proposed budget was less than the last budget (the current budget year), there was no exemption from the Prop 46 calculation. If mandated increases in transportation had been part of the Prop 46 calculation, this option would not be possible. By leasing/purchasing a large bus, rather than outright purchase, the district could make a $48,000 =/– savings. By leasing/purchasing a small bus, rather than outright purchase, the district could make a $31,000 =/- savings. If the BOE would choose the large bus lease/purchase, they could add the reduction of the ACT tuition to accomplish the needed reduction. Conversely, if the BOE would choose the small bus lease/purchase, they would also have to add the first thirteen items of the reduction list to accomplish the required reduction.
Becki Leavitt
Would you please explain this purchase VS. non purchase of buses option? Why does that Schultz fellow insist that leasing out the whole fleet would be better?
The purchasing vs, non-purchase option is fairly straightforward. The budget, as originally set, laid out a small bus at $45,000 and a large bus at $75,000. The option of lease/purchase involves only leaving the dollar portion required to satisfy the first year’s contractual agreement. The BOE decided to lease/purchase the large bus which will save us a little more than $48,000. The downside of this is that the next two years’ budgets now are contractually obligated to these continued payments. However, this decision will allow the district to satisfy the reduction requirements set by the Board of Finance without negatively impacting students services. – Becki
Ok – so they are eliminating all these things that are neded in the classroom at the cost of one teacher being cut.. That’s pathetic really.
They ought to cut staff and keep the resources… and as for $50,000 as compared to the rest of the budget … it is chump change.
Are these people serious?
The additional $48,000 would remain in the budgets going forward. Every year we would have that $48,000 already built into the budget.
The contractual requirement of the lease payments is significantly less and does not raise the budget unnecessarily. Leasing makes the most sense.
So what did the Town and Fire Department cut?
Reality Check, how can you say leasing buses makes more sense than owning and maintaining them. “Leasing” isn’t free.
What,
That $48,000 would live on indefinitely in our education budget. Never to be removed. Long after the purchase of those buses.
Oh, you mean like the Recreation Director’s $14,000.00 a year (started with Delpha). That money is supposed to be for “trips to New York” and “floats on Memorial Day Parade.” We all know soccer is NeConn and Basketball and baseball and softball are run by volunteers and are “pay for play”.
Meta,
No, not like the Rec Director. Every amount budgeted adds to the total amount of the budget.
The total amount of the budget is not decreased in subsequent years even though an item and the cost associated with it are no longer relevant.
RC,
Transportation only has an effect on Prop 46 budget cap calculations if there is a year over year increase in spending. This year our transportation cost was less than last year whether we purchased or leased.
So no matter what we do this year it will have no effect at all on the budget cap under prop 46, this year or the following years. Well that’s not exactly true. Since we now have reduced this year’s transportation budget by $48,000 there is a greater chance that next year’s transportation budget will be greater than this years, triggering an increase in the overall budget cap for the town under prop 46.
So if the rise in the overall budget cap for the town is the sole measuring stick that you use, it would have been better if we purchased this year (though that’s not true all years). But unfortunately this is the box that we have been forced into by prop 46. We can’t look too much at what is cheaper for the taxpayers in the long run, only what is cheaper for them in the current year. Those can be two very different things.
Kevin
This post represents my personal opinions and in no way should be considered an official act of the BOE or that I am speaking on behalf of the BOE in any way
Kevin,
Who was talking about Prop 46 or the budget cap? It’s irrelevant to this discussion.
RC, Proposition 46 has EVERYTHING to do with the the budget. What is it that you don’t understand about what Kevin is saying about lease vs, purchase and the transportation budget and the spending cap?
RC,
If you are not talking about the prop 46 budget cap then I really wonder what you are trying to say with the statement, “That $48,000 would live on indefinitely in our education budget. Never to be removed. Long after the purchase of those buses.” Outside the Prop 46 budget cap how could your statement necessarily follow in an normal budgeting process?
Kevin
This post represents my personal opinions and in no way should be considered an official act of the BOE or that I am speaking on behalf of the BOE in any way
My guess is, that RC is just parroting what little information CPS understands.
Jordan & Kevin,
You both have heard of a little thing called the base budget that is used for the Prop 46 calculation, right? If the $48,000 is included in the budget, the base budget for next year is $48,000 higher.
When this expense is not in next year or subsequent year budgets, this $48,000 will remain.
Whether or not there is an increase in transportation or any other exemption in the Prop 46 calculation is irrelevant to this discussion.
Get it now?
I get it fine, I just had to clarify what assumption you were working off of before I could properly answer you. So yes, in the end this absolutely has to do with the Prop 46 budget cap. You want the budget to be lower this year so the cap will be lower next year.
The mistaken assumption you are working under is that if we had decided to lease in the first place the budget would have been $48,000 less. The fact of the matter is that we had already cut hundreds of thousands of dollars in things we thought were important to the education of Woodstock’s students. If we decided to lease the buses up front we would have spent the $48,000 on those things. There would have been no drop in the budget because the annual education needs (which is admittedly a subjective measurement) far outstrip the allowed budget under Prop 46. On the face of it your argument is disconnected from the reality of the situation.
So why do we decide to buy instead of lease when we know that it will cause us to drop things we think are important this year? Because in the long term it is better for the taxpayers and the WPS. In the long run we can provide them more services for the same dollars because in the long run it costs less to buy than to lease. But unfortunately the annual cap doesn’t always allow us to consider the long term. The taxpayers will end up paying the same amount but get less services in return for their dollars and that’s a shame. I’ve said it before and I’ll say it again. We are being forced to be penny wise and pound foolish. The bus is no exception.
Kevin
This post represents my personal opinions and in no way should be considered an official act of the BOE or that I am speaking on behalf of the BOE in any way
It is indeed unfortunate, that more people don’t understand proposition 46 “Pennywise and pound foolish” is one of the better ways I have heard it discribed.
The truly unfortunate thing that comes out of Kevin’s post is this……we are cutting needed programs and services to the school in order to make a lease/buy decision on a bus. When everyone who has an ounce of common sense knows that the correct thing to do with the bus is to include it in a bonding issue along with the rest of the capital assets that the Town needs. That way, it is excluded from the Prop 46 discussion going forward because it comes under the Debt Service exclusion when calculating the 46 cap. But the people of this Town don’t seem to follow the common sense that the Democrats extolled during the recent election…you don’t pay for long term assets that you may need out of your short term working capital. You spread the payments out over the useful life of the asset being acquired. Accounting 101. I’m sure that they even teach this at the Academy!!
Kevin,
As for the hundreds of thousands of $ of cuts? Well, I’ve seen what was originally in the budget and let’s be honest, it’s debatable how vital those things were to our children’s education.
Is there anyone who doesn’t know that it is a common practice to include every wishlist item in initial budgets because it is known that there will be cuts? No one I know.
With this $50,000 cut the BOE is still realizing an increase of $651,948. That is with zero increase in WA tuition. Zero.
Add that to the $864,341 increase for 07-08 the BOE budget will realize an increase of $1,516,289 over a 2 year period.
In fact, if you then add the $588,881 increase for 06-07 and the $997,322 increase for 05-06 the BOE budget will realize an increase of $3,102,492 over a 4 year period.
Those are significant increases by any standard.
Oh and can you provide figures projecting the cost savings that the BOE realizes when it purchases a bus versus leasing? I daresay it would be helpful to actually see the figures to determine the validity of your statement.
This just goes back to what I said earlier: I don’t believe that people who defend Proposition 46 really understand it at all. But I also think, that if the Board of Finance and Selectmen Wholean weren’t acting stupidly with an excess of items for bonding last time around, that bonding would have passed and at least we could have gotten Bennet’s Farm done. They had some frivolous government budget items on the last bonding package (and a token school bus so that Dave Hosmer could at least try and get the parents to vote in favor of it).
RC,
So let’s take a look at what these increases really are.
Statutory Requirements (SPED, transportation, HS): increase of $415,236. Not much we can do about that, well we could have leased the small bus too.
Well what next?
Contractual and Other Salaries (exclusive of SPED and transportation): increase of $229,319. Well I suppose we could start laying people off but outside of that we have no choice, these increases area contractually required.
Well what next?
Maintaining a Safe and Healthy Leaning Environment (Utilities, Health Supplies, Repairs/Maint): $91,980 Yes, the price of oil went up. I suppose we could always turn down the heat and hand out sweaters.
Well what next?
District Services and Supplies (Legal, Audit, Advertising, Office Software and supplies) ($11,106). Well we lowered the budget here, what more do you want us to do?
Educational priorities (Professional Development, Instructional Supplies and Equipment) I’m unhappy to report ($73,481) A huge decrease.
So what does that equate to, an increase of $651,948.
So what exactly could we have done different here? Instead of looking at the totals maybe we need to pay a little attention to what they represent.
Now Prop 46 gives us a budgetary cap and we have been living under it, but that’s not good enough for some people. They still want to cut more but I really have to wonder if they have paid much attention to what is actually happening in the budget. For example would you like me to call out what pathetic number our professional development line item currently is?
As far as leasing vs. buying let me ask you this? When we buy a bus (not lease but buy)how long do we keep it for? If the answer is more than 3-4 years then it is almost certainly cheaper to buy. As far as I know the average life of a bus is over 10 years.
Kevin
This post represents my personal opinions and in no way should be considered an official act of the BOE or that I am speaking on behalf of the BOE in any way
I think a closer read will indicate that the $48,000 is the figure that the Board of Education will NOT be spending on the bus. The lease cost for this upcoming budget year is in the neighborhood of $26-27,000. Then there will automatically be a similar amount in the 2009-2010 budget and again in the following 2010-2011 budget. Those dollars will not be available for the BOE to spend on anything else in the budget. Then on top of making the lease payments each year the BOE is obligated by the Board of Finance to buy two buses each year. So, we are already in the hole for next year’s budget, which is why the superintendent philosophically doesn’t like the idea of leasing.
I think RC needs to reassess the assertion that the $48,000 is included in the budget and makes next year’s baseline budget higher by that figure. It is what the district is not having to spend this year. The lease payment will be in the budget until the lease/purchase contract is satisfied. But until that time (I believe it is three or four years) that dollar amount will not be able to be spent anywhere else.
The other thing about lease/purchasing (I believe) is that we end up paying more for the bus (finance charges).
Kevin,
Yes. I’ve seen the same pie chart you pulled your categories from. Categories. Not line items.
What’s interesting in the first category is that All H.S. related costs including SPED, Transportation, and Tuition only increased $125,959.
Transportation for PK-8 actually decreased.
So the remainder is SPED PK-8.
Interesting what all can be labeled SPED and therefore a statutory requirement.
The reason the BOE chooses to purchase rather than lease is BECAUSE it is a Prop 46 exemption. Leasing is always the last resort.
Henry,
The discussion was that the $48,000 would remain in the budget indefinitely if the bus were purchased instead of leased. You should re-read the posts.
The fact is that the $48,000 would indeed remain in the budget, every year, indefinitely. It would live there. Just as any past major purchases have done. Long after those purchases were final.
If we continue to have the budget raised by major purchases and then compounded with future major purchases, how is it cheaper to purchase the buses rather than lease? It’s like paying $48,000 a year, every year, to own the bus.
Fixed lease payments are significantly less than a major purchase and do not continually, indefinitely raise the total budget to the extent that the purchases do.
Wonder why companies choose to lease their fleets rather than purchase?
Oh and Henry,
What’s wrong with that? Money that is budgeted for a specific item actually goes towards that item. Imagine that.
RC – You really are obtuse.
The district is required by the Board of Finance to purchase two buses every year. So, yes if that $48,000 had remained in the budget it would then again reappear next year in the budget, but it would remain there and be purchasing another bus. The purchase of buses is an ongoing yearly event. It is not some major purchase that ‘increases’ the budget. It is a purchase that is basic to the type of activity the education budget entails. Buying buses, like buying electricity, oil, and other items required to provide an education for the children of Woodstock are not frivolous expenditures. They are the cost of doing business.
Businesses are commercial enterprises and the reason any of them ‘choose’ to lease fleets probably has a lot to do with capitalism, commercial accounting and taxes. Education is not a business with a finite product at the end of the production cycle, nor does it have the convenience or options available to common commerce.
There isn’t anything wrong with money going to pay for what it is budgeted to pay for. The point is that the lease/purchase payments will be in the budget for the next few years AND we will also have to budget additional monies for the purchase of two more buses EVERY year. Next year we will be purchasing buses AND paying for the lease/purchase contract for this year’s bus.
That means that the lease/purchase monies are on top of next year’s bus purchase. Those monies will not be available for electricity, oil, supplies, insurance, wages, textbooks, software or anything else in the budget. So, in actual practice, the BOE budget for the next three to four years has already been short-sheeted.
That is what is wrong with lease/purchasing. It ties up money that may be needed in other places. It is not quite as bad as paying the minimum payment on your credit card (I’m not ‘accusing’ you of having a credit card) but it does have an impact for several budget cycles.
RC
You stated, “Interesting what all can be labeled SPED and therefore a statutory requirement.” What exactly are you implying here? If you are trying to say it, bring it out and back it up. As far as I can tell, the numbers I presented for the increases are devastating to your case and with nothing to back it up you are now trying innuendo. No thanks, once again what exactly are you implying here? If you’ve got some specific information present it.
BTW, those numbers I mentioned are not contained on the budget pie chart. The budget pie chart shows the budget as it exists for this year, not the year over year figures that I just gave you.
You also stated, “The reason the BOE chooses to purchase rather than lease is BECAUSE it is a Prop 46 exemption. Leasing is always the last resort. ” This is interesting because I don’t recall that conversation being brought up in a BOE meeting. It wasn’t in the pro/con conversation that happened with Dr. Baran in the last BOE meeting. I certainly don’t remember thinking that when I voted for the budget. I mean, are you having ex parte private conversations with the other BOE members so you have some special insight into why they voted the way they did? Do you have some special mind reading powers that the rest of us are not aware of? Once again, long on innuendo and flat out accusations, short on facts or evidence.
Kevin
This post represents my personal opinions and in no way should be considered an official act of the BOE or that I am speaking on behalf of the BOE in any way.
Preston Schultz has been tooting the horn of leasing buses for years, and has never come up with any cost analysis to prove that it would actually be better for the education budget. Before anyone takes up any of Preston Schultzes’ gauntlets, they need to check out exactly what they are getting in to (or being fed).
The lease/purchase bus option has been a red herring that has been beaten to death for years by the CPS crowd. …(see Orson’s new article. Admin).
Lucida,
When the BOE leases a bus it is actually a lease purchase. Simply a way to finance the purchase over the long term. These buses remain in our inventory. They are not returned or traded in for new buses. Check our bus inventory some time
The district is REQUIRED by the BOF to purchase 2 buses every year? Really? That’s odd considering the BOF can not tell the BOE how to spend its money. Once the BOE has been authorized an amount they can spend it as they like.
We actually had 4 new buses on the road for 07-08. The 2 buses that were leased as part of the 06-07 budget were not acquired until the summer and put on the road in 9/07.
The fact remains that the amount of the original purchase remains in the budget. Even if new buses are leased or purchased in subsequent years, the base budget reflects the original purchase. The ONLY thing that is affected is the Prop 46 ‘exemptions’. If the transportation line item does not show an increase the BOF can not utilize that exemption in the Prop 46 calculation as this exemption is ONLY for increases. This only raises the cap it does not reduce the base budget for items that are no longer required.
Therefore, if the BOE budgeted $228,061 for new buses (as in 07-08) that amount remains in the base budget for subsequent years. While the amount budgeted in 08-09 for new buses was $158,480, which reflected a $69,581 decrease, the amount of $228,061 was already in the 08-09 base budget (prior to increases or decreases). So the $69,581 is reflected elsewhere in the 08-09 budget. Those items in the 08-09 that received the excess $69,581 will still be funded.
Actually only $2,000 will be cut as the BOE is not LOSING anything with the $48,000 portion of the cut/reduction. They will still get those buses. It’s a beautiful thing.
In fact, if the BOE had chosen initially to lease both buses the total budget could have been approximately $79,000 less. The outright purchase amount for the large and small bus is $121,800. With lease purchase this amount could have been reduced to approximately $42,800. (Kevin, this is a perfect example. Just because items are statutorily required does not necessarily mean they were budgeted for appropriately.)
And I’m the obtuse one?
Paladin,
You want an analysis?
06-07
Lease Purchase two 71-passenger buses – 4 payments of $36,680. This makes the total purchase price for these two buses $146,720.
07-08
Outright purchase two 71-passenger buses – $160,000.
If the buses had been leased in 07-08 the total budget could have been reduced by approximately $120,000. Please show me the benefit to taxpayers with the outright purchase of buses.
RC, winning feels great.
RC,
Hmm, Let’s not start comparing bus expenses from different years, shall we? …(see Kevin’s new article. Admin).
Paladin,
Yes it does. If you ever do please let me know and I will be happy to hoist my beer in celebration with you.
Everyone deserves to win at least once and I am sure your time will come. Some day. Keep the faith!
RC – The 2 buses we financed in 06/07 cost less than the 2 buses we bought outright in the 07/08 budget based mostly on the additional equipment required. The price of buses has been increasing at a fairly good clip – a lot of that cost is reflective of huge increases in the cost of steel. In 02/03 (five budgets ago) we purchased a large bus outright for $52,791, now the cost is $80,000.
- Becki
Becki,
What additional equipment was needed in the 07-08 buses and how much extra did it cost?
New buses are now required to have cleaner emissions systems. Also, there is new legislation that requires crossing arms on new buses. Crossing arms open in front of the bus and makes kids walk out ten feet or so in front of the bus before crossing. I’m pretty sure that legislation also has a date certain requiring all buses be retro-fitted, but I’m not sure when that is. Other things that add to increasing costs, besides the increasing cost of steel are the increasing cost of components made from any petroleum product (plastics) and the designs changing over to all electronic controls.
So, its not a specific detail of the bus that has increased the cost but many different things.