RTM Finance Chair to Board of Ed: Watch Spending

Bruce Orr, chairman of the Finance and Budget Committee of the Representative Town Meeting, read this prepared statement to the Board of Education at the board's meeting Tuesday in reaction to the 2013-2014 budget submitted for approval by Darien Superintendent of Schools Stephen Falcone. The Board of Education is reviewing that submission and will submit its own proposed budget to the Board of Finance:

Thanks for this annual opportunity to comment on the proposed budget for 2013/2014. I’ll turn this over to Mr. Davis [Jack Davis, another member of the RTM Finance and Budget Committee] in a couple of minutes for some specific line item comments; I thought it would be prudent to provide the Board with some general remarks.

While the proposed increase of 4.07 percent, as compared to recent proposed budgets in the 6 percent to 8 percent range, appears to be more reasonable and thoughtful, a high level analysis of the key budget drivers may provide the Board with some insights that could yield additional savings.

As we all know, personnel costs represent the largest portion of the budget—in the range of 65 percent of all expenditures—this number rises to close to 80 percent when one includes health insurance and other mandated benefits.

Also as we all know, the 2013/2014 budget year is the second year of a three teacher’s contract, that calls for a half step increase that was forecast to be an increase of 2.02 percent—assuming the teacher seniority mix of the 2012/2013 had remained constant.

Please reference page 20 in your budget books. If that staffing mix had remained constant—it did not; the 2012/2013 mix resulted in an overall younger and lower cost staff profile—and one applies the 2.02 percent increase to the 2012/2013 estimated year end personnel costs, that would yield a dollar increase of $1.1 million.

If one now “normalizes” the current proposed budget by adding back in the Special Ed Personnel transfers to various Operating accounts, the dollar increase, including one net additional FTE, would be an $882K increase or 1.5 percent, which reflects the current staffing seniority mix.

Taking a slightly longer term view—like into next year—when the teacher’s contract calls for a full step jump to a forecast 3.36 percent increase,
this would cause personnel costs to rise $1.9 million from the normalized 2013/2014 proposed personnel budget—that’s a big number that we are contractually obligated to provide.

Given the relatively modest Personnel cost increases for the current proposed budget of 1.5 percent, which is the primary cost driver; we encourage the Board to scrutinize all the Operating and Fixed expenses in order to bring the overall increase down to a level that reflects the current enrollment forecasts and eliminates any discretionary spending that are “nice to have” but are not central or critical to delivering a quality education program.

Operating expenses, even after adjusting for the $563K Special Ed transfer from Personnel, are up a whopping 8.2 percent over the year end estimate.

Moderating the year over year increases in the budget will not only be more palatable to our constituents—the taxpayers—but will also provide us with a lower baseline for the 2014/2015 budget year, when we will have to absorb a significant personnel cost increases.

Bruce G. Orr
Jan. 22, 2013

Editor's note: This article originally was published at 10:44 a.m. The time stamp has been changed for layout purposes on the Home page of Darien Patch.