E&D Accounts....
May 22, 2008
Recently several questions were asked concerning the Bridgewater-Raynham Excess & Deficiency account, how it could get to be $1million, why it did not figure into the current year budget, and why did B-R ask Bridgewater for $1.4M last year when this could have been reduced by the $1M in the E&D account.
The Bridgewater-Raynham Regional School budget is built and voted upon based on data through month-ending February, as the B-R School Committee votes during the month of March. As such, B-R is still in the third quarter of the year.
There are some areas of the budget that the School District truly has no control over how much is expended, and does not know of any remainder until our fiscal year is closed, the auditors review, and the State certifies our accounting and accounts. Some of these areas are:
Substitute teachers (fy09 budget=$360,000): April-May-June can have a large number of days required.
Special Education tuitions (fy09 budget=$4,911,000): there is fluidity in number of students enrolled in various programs.
Special Education transportation (fy09 budget=$1,767,000): as with previous category - tuitions and transportation costs are related.
Health Insurance costs (fy09 budget=$9,840,000): laws allow employees to enter plans or change plans during the year for qualified events (such as marriage, job change). With over 600 employees, if 1% (six people) decides to join the family plan, this would be about $100,000 in new expenses.
Careful spending throughout the school/fiscal year, and especially as the year concludes, can create an overall excess for the year in aggregate. Beware that individual line item categories can and do exceed initial plans [like gasoline, snow & ice, utilities, Special Education tuitions this past year], but were offset by lower than expected costs elsewhere [substitute teachers, health insurance, teacher salaries].
To the question of the B-R funding request, the following is the approximate timeline relative to Bridgewater:
(a) March 29, 2007, B-R School Committee votes fy2008 budget
(b) May 8, 2007, Bridgewater Town Meeting approves budget and contingency budget
(c) June 16, 2007, Bridgewater defeats over-ride vote and funding for contingency budget
(d) June 20, 2007, B-R School Committee re-certifies fy2008 budget (requiring Bridgewater to hold a town meeting to decide on assessment)
(e) July 30, 2007, Bridgewater Town Meeting approves B-R School budget and by this action agrees to assessment amount
(f) approx. Nov-Dec 2007, B-R receives notification of certified Excess & Deficiency (same as Town Free Cash) from the State
Some question, myself included, why it takes so long for the State to certify our numbers. The answer from the State is that they prioritize municipal (town) documents prior to reviewing data for regional schools. (Perhaps in deference to communities trying to close out prior years and thus to set tax rates?)
So, even into July, the B-R School Committee did not know the final amount that would be established by the State as E&D. We can only allocate to our budget E&D amounts that are less than or equal to our most recent Certified E&D Balance. Further, for the past couple of years, the majority of these funds are then assigned to the next school year budget to offset expenses thereby reducing Town Assessments. For fy2008, B-R voted to apply $800,000 of E&D to offset expenses, and for fy2009, B-R voted to apply $1,000,000 of E&D to offset expenses (and reduce the Town Assessments).
It is important to note that funds in E&D are the result of assessments paid by both towns. They are therefore returned [added 5/27/08--> applied to Assessments, not actually 'returned'] to both communities. Thus of the $800,000 used in fy08, $504,800 was the pre-rata share for Bridgewater and $295,200 was the share for Raynham. For fy09, $631,000 is Bridgewater’s share and $369,000 is Raynham’s share. [added 5/27/08 --> E&D funds are from the operational budget, and are not connected or related to school building project funds.]
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