Budget surplus looks like a safer bet than June 5 outcome

To be fair, SPASD budget guru Phil Frei has been saying that there will be a surplus at the end of this June.  On that point we agree.  It's the dollar amount where our paths diverge.

The stock market has all kinds of indices on which performance is evaluated.  We need and index for the 9 budget focal points we monitor.  Let's call it the SP-NEYEN.

We believe that these budget lines are representative lines where the district habitually over-budgets.  They serve as nine socks of money.

Let's all be like the giving tree, eh?

At the end of March, we were projecting a surplus of $635 K just from these 9 budget lines alone.  At the end of April, we see the surplus as having grown to just over $700K.  And think about it.  Gas for Heating is virtually done for the calendar year.    83% of the school year is in the books, and we;'ve spent only 2/3 of the budgeted amount.  And the two remaining months require very little heating.   Similarly for electricity, we have $348K budgeted dollars remaining, and --on average-- we spend $96K per month.  Anyway you slice it, we have at least $150K surplus in that line item alone.

So why has Phil Frei repeatedly said that he anticipates a surplus of only $200-300K?   What does he know that he's not sharing?  Remember the giving tree?  Can't we all be like the giving tree?   Shouldn't the district be sharing information so the public can understand the budget? Sharing is caring, right?

Or does the district simply prefer to treat community residents like mushrooms.

Crystal Ball: Doesn't Take A Genius to See a Surplus

The only question, then, is.... how much?

We've heard estimates of $200-$400K surplus for the school year from the district office.
What has not been clear is whether that projected surplus considers the $350-$700K planned to be used from fund balance this year.  Or is that $200-400K over and above (meaning we would actually INCREASE rather than decrease fund balance)?

All good questions for which we currently lack answers.
And since the district is showing very few of its cards regarding the 2012-13 budget, let's just shake the trees a bit and see what falls out, shall we?

We looked at just NINE budget "lines", and we see approximately $635K of surplus just from those lines alone.  Of course their could be some hefty shortages in some budget lines of which we have not been forewarned.  But let's just focus on what we can (and you should too) see in just 9 simple budget lines.

1. Line 331 Gas for Heat
Through March (75% of the fiscal year) only 61% of budget had been spent.  14% unspent after 3/4 of the year is complete would suggest that we might logically end up as much as 18.7% under budget.   18.7% of a $305,518 budget would translate to a surplus of $57,000.

Looking at it another way, $120K of the budget remains unspent.  Last year, Gas expenses for April through June were $57K.  This year, we have averaged $23K per month.  Based on this year's spending trend, we could project spending about $69K.  That tells us that we can project a surplus of $51-$61K.  Compare that to our earlier projection, and it seems realistic to expect about $60K surplus.


2. Line 337 Water
Through March (75% of the fiscal year) only 51% of budget had been spent.  24% unspent after 3/4 of the year is complete would suggest that we might logically end up as much as 32% under budget.   32% of a $55,030 budget would translate to a surplus of $17,600.

Looking at it another way, $27K of the budget remains unspent.  Last year, expenses for April through June were $10K.  This year, we have averaged $3,500 per month.  Based on this year's spending trend, we could project spending about another $10.5K.  That tells us that we can project a surplus of $17K.  Compare that to our earlier projection, and it seems realistic to expect about $17K surplus.


3. Line 336 Electricity
Through March (75% of the fiscal year) only 63% of budget had been spent.  12% unspent after 3/4 of the year is complete would suggest that we might logically end up as much as 16% under budget.   16% of a $1,209,019 budget would translate to a surplus of $193,443.

Looking at it another way, $452K of the budget remains unspent.  Last year, expenses for April through June were $295K.  This year, we have averaged $95K per month.  Based on this year's spending trend, we could project spending about another $285K.  That tells us that we can project a surplus of $157-167K.  Compare that to our earlier projection, and it seems realistic to expect about $160K surplus.


4. Line 411 Supplies
Through March (75% of the fiscal year) only 57% of budget had been spent.  18% unspent after 3/4 of the year is complete would suggest that we might logically end up as much as 24% under budget.   24% of a $1,101,715 budget would translate to a surplus of $264,411.  Note that with the March budget adjustments, this line was LOWERED by $56K!  This however, is a line that gets spent down heavily in the last few months.  Hmmmm.

Looking at it another way, $331K of the budget remains unspent.  Last year, expenses for April through June were $248K.  This year, we have averaged $76K per month.  Based on this year's spending trend, we could project spending about another $228K.  That tells us that we can project a surplus of $83-103K.
Compare that to our earlier projection, and it seems realistic to expect at least $80K surplus.


5. Line 490 Other Non-Capital Objects
Through March (75% of the fiscal year) only 16% of budget had been spent (Nope, not a typo...16% spent to-date).  84% unspent after 3/4 of the year is complete would suggest that we might logically end up as much as 89% under budget.   89% of a $81,150 budget would translate to a surplus of $72K.  Note that with the March budget adjustments, this line was INCREASED by $7K!  Why on earth would we budget MORE for a budget line that has only spent 16% of its total budget to-date?  Hmmmm.

Looking at it another way, $58K of the budget remains unspent.  Last year, expenses for April through June were $10K.  This year, we have averaged $1,500 per month.  Based on this year's spending trend, we could project spending about another $3.5K.  That tells us that we can project a surplus of $48-55K.
Compare that to our earlier projection, and it seems realistic to expect at least $50K surplus.

6. Line 109 Substitutes (Teachers)
Through March (75% of the fiscal year) only 57% of budget had been spent.  18% unspent after 3/4 of the year is complete would suggest that we might logically end up as much as 24% under budget.   18% of a $1,157,033 budget would translate to a surplus of $268K.  Note that with the March budget adjustments, this line was DECREASED by $100K!  Hmmmm.  Seems like someone saw what we see.  But, the trend is for a much higher substitute cost in the spring.  Teachers playing hooky when the weather gets nice?

Looking at it another way, $496K of the budget remains unspent.  Last year, expenses for April through June were $391K.  This year, we have averaged $73K per month.  Based on this year's spending trend, we could project spending about another $220K.  That tells us that we can project a surplus of $105-276K.
Compare that to our earlier projection, and it seems realistic to expect at least $100K surplus.


7. Line 310 Personal Services (Send Lawyers, Guns and Money)
Through March (75% of the fiscal year) only 59% of budget had been spent.  16% unspent after 3/4 of the year is complete would suggest that we might logically end up as much as 21% under budget.   21% of a $1,109,139 budget would translate to a surplus of $233K.  Note that with the March budget adjustments, this line was INcreased by $1,100!  Ummm...what's the point of raising a $1.1M budget by $1,100?Hmmmm.

Looking at it another way, $378K of the budget remains unspent.  Last year, expenses for April through June totaled $321K.  This year, we have averaged $72K per month.  Based on this year's spending trend, we could project spending about another $216K.  That tells us that we can project a surplus of $57-162K.
Compare that to our earlier projection, and it seems realistic to expect at least $55K surplus.  Even if we expel all 6 of the pot brownie boys. :-)



8. Line 342 Employee Travel
Through March (75% of the fiscal year) only 52% of budget had been spent.  23% unspent after 3/4 of the year is complete would suggest that we might logically end up as much as 30% under budget.   30% of a $80,151 budget would translate to a surplus of $24K.  Note that with the March budget adjustments, this line was DEcreased by $3,600.  

Looking at it another way, $40K of the budget remains unspent.  Last year, expenses for April through June totaled $12K.  This year, we have averaged $5K per month.  Based on this year's spending trend, we could project spending about another $15K.  That tells us that we can project a surplus of $25-28K.
Compare that to our earlier projection, and it seems realistic to expect at least $25K surplus. 


9. Line 940 Dues & Fees
Through March (75% of the fiscal year) only 53% of budget had been spent.  22% unspent after 3/4 of the year is complete would suggest that we might logically end up as much as 29% under budget.   29% of a $338,349 budget would translate to a surplus of $98K.  Note that with the March budget adjustments, this line was DEcreased by $8,500.  

Looking at it another way, $148K of the budget remains unspent.  Last year, expenses for April through June totaled $41K.  This year, we have averaged $20K per month.  Based on this year's spending trend, we could project spending about another $60K.  That tells us that we can project a surplus of $88-107K.
Compare that to our earlier projection, and it seems realistic to expect at least $88K surplus. 


Y'all do the math.  See if you see differently.  Now...the district could, of course, suddenly accelerate its spending in these lines, or magically transfer the overages to other budget lines.  The bottom line is that over-budgeting is the oldest trick in the books to increase fund balance. Oh, gee....we over spent?  No...no...you have it all wrong...we were just being frugal.  Guess we'll just have to put the surplus into fund balance.

Sprechen Sie Budget?

It is long overdue, folks.
We're in the midst of March Madness (weather-wise as well as basketball-wise).
Dontcha think we should be talking budget?
We may hear something at the next Finance Committee meeting.
But just to whet your appetites....and to perhaps to initiate an incendiary flare beneath district administration's derrieres....we offer you an in-depth budget analysis of just ONE budget line.

Our forecast calls for....surplus...and a surplus of it.
Nope...nothing new here.  That's pretty typical.

Let's just focus on electricity (line 337) ...shall we?
That's an easy one...right?
In fairness, let's begin by saying that the original budget (July 2011) was for $1.261M and it was subsequently reduced to $1.209M in August.

• For FY2010-11, there was a budget line surplus of $194K (15.5% of total budget) 
• For FY2011-12, this line budget has been DEcreased by 3% ($43 K) 
• So…despite a $194K surplus last year, we only DEcreased the budget by $43K? 
• With 58% of the year in, we have spent only 32.6% of this budget line …
• ...and in FY 2010-11, the last 5 months of the year accounted for 47% of spending

 We're budgeting $101,000/month, yet only spending $93,000/month.
That alone suggests a surplus of at least $96,000.

For the remaining 5 months of the year, we have $651,000 budgeted for electricity usage.
At a budgeted rate of $101K/month, that would indicate a surplus of $146,000.

Looking at actual expenditures to-date and even using last year's real costs from February through June, a surplus of $157,000 is anticipated.

Three different ways to analyze it, and we see projected surpluses of $96,000- $157,000.

Anyway you slice it, we have significant surplus in just this one budget line item.

Now that we've outed it, anyone wanna bet that the budget for this line item gets adjusted downward and the "surplus" sprinkled throughout a ton of other budget lines as part of the "March Budget Adjustments"?

Surplus with a Purpose?

Since the district isn't uttering a peep regarding the status of the 2011-12 budget or potential ramifications of the FY2012-13 budget, we will.  We were reviewing the current " EXPENDITURE SUMMARY REPORT BY OBJECT ".

(click to enlarge)

 Let's start with the low hanging fruit.  Unless you've spent the last 4-5 months working on your tan in Florida, then it should come as no big news to you that we've had a pretty mild winter.  And with a mild winter comes huge "savings"...or, as some district folks like to phrase it, "cost avoidances".

Little snow (okay except for yesterday) means little need for snow removal costs.
Warmer temperatures means for less need for building heat.
Milder temperatures also mean less electricity use what with the thermostat not going on and off.
Actually, we looked at the heating degree days data for the winter, and learned that going back to October, the Madison area is running 18% LOWER than the average year.  And when you realize that the school district budget based its budget off of last year's budget (where we had a surplus) and then ADDED 5%, then there's room for a pretty heft budget surplus AGAIN this year.

The pants of this budget are so loose,
we haven't seen this much crack
since the refrigerator guy was here

Like Caren Diedrich, we understood that this budget was so tight that it squeaked.  Actually, it's  looking like this budget's so loose, it's pants are gonna drop.  You've seen it...and you know it's not attractive.

More to the point, once again, it appears that we budgeted WAY more than necessary.  Your tax dollars at work.  Any guess as to what little projects the district will be seeking to fund with your unnecessary tax dollars?  Let's look at the projected surplus from just 3 budget lines.

Substitute Teacher Salaries
The budgeted amount was $1.25M for the entire school year.  Given that school is only in session 10 months, that comes to about $125,000 per month.  In January, we spent $86,000.  Having only spent $440,000 year-to-date (~$85,000/mo), that leaves us with a budget balance of $810,000 for the remaining 3.5 months of the school year.  Unless a whole boatload of teachers are planning on attending week-long conferences, we should EASILY have $250,000 to $350,000 leftover--if not more.

Gas for Heating

(click to enlarge)

The budgeted amount was $305K for the entire school year.  Given heating is usually mainly needed in October through April , that comes to about $50,000 per month.  In January, we spent roughly $40,000.

Having only spent $100,000 year-to-date (~$25,000/mo), that leaves us with a budget balance of $205,000 for the remaining 2.5 heating months of the school year.  And those would be warmer months in an already warmer than average year.  Unless the arctic slides south a few thousand miles, we should EASILY have $80,000 to $100,000 leftover----and likely more.

Electricity
The budgeted amount was $1.2M for the entire school year.  That comes to about $100,000 per month--on average---and we know that costs are heavier from September through June.  In January, we spent $93,000.  Having only spent $560,000 year-to-date, that leaves us with a remaining budget balance of $650,000 for the remaining 5 months of the school year.  While we could have a VERY warm spring in store, it seems likely that we will have over-budgeted by $100,000 to $150,000.

Combined Projected Surplus
From just three budget lines, mind, you....we see what appears to be somewhere between $400,000 and $600,000.

Stay tuned as we peer into other parts of the budget.

Building & Grounds Budget Exposed

Upon request of a school board member, a review of the recent years budget vs. expenditure for the Buildings & Grounds Department was initiated. It is what we thought it was.

There's a lot of our money stashed in them thar B&G skivvies. Take a look at the budget vs. expenditure reports going back to 2007-08. We've cleaned up the district's PDF/image spreadsheet, but feel free to view the original at this link.

On average, over the past 4 years, the B&G budget has been UNDERspent (OVER budgeted) by nearly $300K. That means that about 15% of the B&G budget must be "fluff".

The district is "projecting" that the Capital budget will be spent down to zero this year IF the "Royal Oaks" secured entrance project is initiated. There is a current balance of about another $35,000 in the general B&G budget which the district insists will be spent down.

What the district DOESN'T say is that if it were'nt for the District Office re-model project costing $165,000 more than anticipated, there would be a $165,000 surplus. In fact, had the board voted against the district office remodel, there would be a surplus of $240,000!

When this money becomes "surplus", oh say about this time of year, that's when administration goes on a shopping spree of sorts. This money gets transfered elsewhere and let the spending begin.

The problem is that this district has to learn how to budget appropriately. And that means no fluff. Right now, the community simply has no trust for the information provided. Every number presented is believed to be inflated or "spun" to tell the story they want to tell.

So...Administration wants to budget over $1.9M for the B&G department for 2011-12? We don't think so!

OurDough Pants Discovered; District Switches to StashItWear

We must speak quickly. They're on to us.
The District knows that we've discovered their top secret OurDough pants.
They have subsequently switched tactics. Our intel reports suggest that they now are equipped with StashitWear! Be on the alert.