The BOE taped the Meeting; I trust that when it airs it will be unedited.
March 3, 2010
Honorable Mayor Patricia Murphy
New Milford Town Council
New Milford Board of Finance
New Milford Town Hall
10 Main Street
New Milford, Connecticut 06776
Re: Proposed Town of New Milford and Board of Education Budget
Dear Mayor Murphy, Town Councilmen and Board of Finance,
I write this letter to give you my opinion on the budget as it is currently proposed and the findings of my cursory review of the Board of Education Budget. As background, I became a resident of New Milford in early 2005 and am the owner of a small business in Town, Arthur H. Howland & Associates, P.C. In the last 3 years our total staff has been reduced by 40 percent due to the economic downturn. Now more than ever, as a homeowner and small business owner I must make Every Dollar Count! I like many other homeowners and small business owners in Town cannot afford any more increase in Town taxes except those that are truly and fully justified.
I feel that as both a homeowner and business owner that it is imperative I review the budgets and determine if the proposed increases in spending are justified and necessary. Unfortunately, I was only able to spend a day or so reviewing the Board of Education budget so my findings are only based on a review of certain areas of the School Budget that I was able to concentrate on.
For instance, I did not even begin to review things closely such as the Capital Budget where it shows the purchase of one (1) MIMIO XI PORTABLE/WHITEBOARD for $12,730.00 at Sarah Noble School when you can probably get several of them for that price.
I also didn’t get to review expenditures to date as of January 4, 2010 very closely. However, it is interesting to note in Object Code 540, Advertising Expenses we have only expended $2,650.80 of $22,000.00 budgeted. I cannot comprehend how the Board of Education is proposing to budget this line item at $22,000 again, especially considering the fact that in 2008-2009 only $5,524 was expended from this line item. It would appear we are overfunding this line item by a minimum of $16,000 per year.
I also reviewed the February 22, 2010 “Budget Issue” Newsletter of the New Milford Parent Teacher Organization (PTO) as that included a section called, “De ‘myth’ defing the School Budget,” which I felt was important as part of my review as they had already begun a review of the School Budget.
The first disturbing trend is that every year since 2003-2004 there is a decrease in student enrollment yet every year there is an increase in the School Budget. In fact, since 2003-2004 the student enrollment has decreased by 8.12 percent yet the budget itself has increased by 29.96 percent. As a resident of the Town, common sense tells me this does not make sense. I understand utility costs have gone up since then but when will the School District learn that the taxpayers of New Milford do not have the ability to keep supporting these tax increases year after year!
Due to the limited amount of time that I was able to spend reviewing the School Budget I concentrated on areas that I felt have the largest potential for savings. Please see the attachment on page 11 titled, “Board of Education Summary of Salary Increases.” I felt that it was important to determine the amount of salary increases proposed for certified and non-certified employees. It was astounding to learn that approximately $742,649.00 in salary increases is proposed. I understand that many of these increases are parts of negotiated contracts; however, I would be embarrassed to be an employee of the School District and not forego my pay raise this year considering the current state of the economy. As a small business owner, I can state with certainty that I have not been able to give my employees raises for two years and I myself have actually taken a substantial pay cut. In talking with many friends, colleagues and other business owners over the past year I have yet to find any that are giving or have received pay raises. If this is the case, why would the School administration not face the reality that all of the Town of New Milford taxpayers face and do everything possible to eliminate all proposed pay raises? Every Dollar Counts and if we can save $742,649.00 in taxes this should be immediately done.
For some reason, the above analysis was not part of the PTO Budget Newsletter. As I read this newsletter, I felt as a taxpayer it was prudent for me to examine each of their, “myths,” and associated, “facts.” Unfortunately, as I began to delve into the, “facts,” portion of their newsletter I began to realize there was very little factual basis to their findings. I do believe the format worked well though so below please find various, “myths,” that I have found, followed by real, true facts based on research of the Budget, Finance Department, Tax Assessor Department, prior School Budgets, State Department of Education, etc.:
From a New Milford Parent Teacher Organization (PTO) budget newsletter in which they claim to “de ‘myth’ defy” the School Budget, “Keep this in mind, if the adopted Board of Education budget were instituted with the 3.14% increase it called for, the average homeowners taxes (based on a home value of $250,000—with the average home in New Milford being valued at $231,379*) would rise $102.00 per year. If pay-to-play is instituted, each athlete/participant fee would be $150 per year to play—I’ll let you do the math!”
It is unfortunate that the PTO does not know how to, “do the math!” The PTO should have called the Tax Assessor, Ms. Kathy Conway if they cared to actually get their facts correct as she is the person who actually assesses homes and determines the true value of a home. As of last year the average value of a home is approximately $342,857 with an assessed value of approximately $240,000 ($342,857 x 70 percent). If we are to assume that the Grand List will stay the same and State funding will remain the same (this will probably decrease, thus making the increase in taxes even larger) we determine the following:
Total Taxes Raised $66,042,266.00 $67,831,665.00
Grand List $2,932,492,514.00 $2,932,492,514.00
Mill Rate 22.52 23.13
Average Taxes $5,404.80 $5,551.45
The increase in taxes would then be $146.65 per year for the average homeowner not $102.00 as the PTO suggested. Their calculations only underestimated our tax increase by 44%; that’s not a big deal is it? Every Dollar Counts and in this economy, as a homeowner and business owner in the Town of New Milford, I cannot afford this unjustified increase in taxes.
From a New Milford Parent Teacher Organization (PTO) budget newsletter, “Q. How come the school always finds money when they were saying they were going to have to make cuts? A. The budget process in New Milford is completed very early. To create the budget, school administrators are projecting for expenses that may be up to 18 months away. As you know from your home budget, its impossible to tell from month to month what the price of fuel oil, lp gas, electricity, diesel fuel and many other expenditures will be, let alone 18 months out. So, an educated guess is made and sometimes the actual cost is lower than the prediction, resulting in savings and sometimes the actual cost is higher, resulting in the need for a budget transfer.
The actual fact is that the School District has made a habit of continually overestimating their utility costs. In fact, I couldn’t imagine anyone estimating their utilities for their, “home budget,” like the School District has. Below please find the budgeted amount and actual cost for fuel, natural gas and gasoline for the most recent years for which data was available.
Fuel $837,672.00 $217,787.00
Natural Gas $35,734.00 $395,669.00
Gasoline $23,300.00 $30,090.00
Sub-Total $896,706.00 $643,546.00
$253,160.00 Amount Over-Estimated
28.23 Percent Overestimated By
Fuel $312,718.00 $226,175.00
Natural Gas $467,156.00 $358,234.00
Gasoline $26,300.00 $38,964.00
Sub-Total $806,174.00 $623,373.00
$182,801.00 Amount Over-Estimated
22.68 Percent Overestimated By
Fuel $554,039.00 $418,464.00
Natural Gas $389,923.00 $388,663.00
Gasoline $28,395.00 $26,562.00
Sub-Total $972,357.00 $833,689.00
$138,668.00 Amount Over-Estimated
14.26 Percent Overestimated By
This means on average the School District has overestimated their fuel, natural gas and gasoline costs by $191,543.00 per year or an average overestimation of 21.72 percent per year. I urge the Town Council, Board of Finance and Board of Education to stop this over-estimation immediately.
The School District’s estimation of electricity usage is even worse! Below please find the budgeted amount and actual cost for electricity for the most recent years for which data was available.
2006-2007 $1,279,637.00 $1,033,042.00
2007-2008 $1,376,701.00 $ 952,670.00
2008-2009 $1,439,281.00 $ 960,835.00
Sub-Total $4,095,619.00 $2,946,547.00
$383,024.00 Amount Over-Estimated Annually
28.06 Percent Overestimated By
Yes, you read that right. In the last 3 years of available data the School District has overestimated their electricity costs by an average of $383,024 per year or an average overestimation of 28.06 percent per year. Every Dollar Counts and I implore you to not allow the $574,900.33 per year for utility costs that has been over-estimated time and time again by the School District.
“In what other profession can you have a master’s degree and not make $50,000?” a Board of Education member said in a recent newspaper article.
If the Board of Education Member looked at the budget he would have realized that only 2 of the 60 steps that there are for teachers with a Master’s degree actually make less than $50,000 per year. The other 58 steps range from $50,293 to $81,754 per year. It shall also be noted that teachers do not work a full year like other professions and that Connecticut has the second highest average salaries for teachers in the United States (from teacherportal.com).
From the New Milford Parent Teacher Organization (PTO) budget newsletter, “Also, the school receives funding from the State of Connecticut and these numbers are sometimes not finalized until late summer, so again, during the budget process, a prediction is made of what this funding will be, sometimes resulting in additional funds. When any overage of funding is received, it is placed into the Town of New Milford’s undesignated fund.”
The School District, if they overestimate their utility costs, is able to transfer those monies (with Board of Education approval) to any other area within the School budget. It does not go back to the Undesignated Fund as suggested. Every Dollar Counts and any over-estimates by the School District should go back to the Town and not spent by the School District on things that the taxpayers did not vote to approve.
From the New Milford Parent Teacher Organization (PTO) budget newsletter, “Q. It seems that the school system has an unfair percentage of the town budget. A. The town had a budget last year of approximately 56 million dollars. When you take into account that …
• Educates 4,800 New Milford students
• Maintains 900,000 square feet of the town’s property it puts it in better perspective. On a side note, Newtown School System in Newtown, CT educates 5,000 students and is often compared to New Milford Schools in regard to staffing numbers and programming and their budget is $69.5 million, showing our costs are more than reasonable.”
I am not sure how the PTO arrives at the conclusion that, “our costs are more than reasonable.” It is not a fair comparison to simply divide the total spent by the number of students. In contacting the State Department of Education I learned that the way that the State examines per pupil costs is the Net Current Expenditures Per Pupil also known as NCEP. The formula translates raw numbers into expenditures that try to compare “apples with apples” of how a district supports education. Certain expenses can be included and others must be excluded. The per pupil expenditure tries to determine the allocation to learning per student after costs of transportation and other expenses not directly related to the classroom are deducted. Please see the attached document on page 14 titled, “Explanation of Net Current Expenditure Per Pupil (NCEP),” to better understand how per pupil costs should really be calculated.
The Net Current Expenditure Per Pupil (NCEP) for 2008-2009 for New Milford was $11,462.90 versus $11,662.78 for Newtown, which equates to per pupil costs in New Milford being 1.71% less than Newtown. This is much, much less than the difference implied by the PTO. A fair assumption would then be if we are spending almost the same amount per pupil, the performance of our students should then be comparable. Unfortunately, this is not the case.
88.98 67.53 Math, CT Mast.Test, Grades 3-8, % At/Above Goal, 2009
86.57 72.10 Reading, CT Mast.Test, Grades 3-8, % At/Above Goal, 2009
82.55 68.07 Writing, CT Mast.Test, Grades 3-8, % At/Above Goal, 2009
81.85 70.50 Science, CT Mast.Test, Grades 5 & 8, % At/Above Goal,'09
273.88 271.15 All Subjects, CAPT, Average Scale Score, 2009
54.10 37.80 % Students Reaching Physical Fitness Health Standard,
All 4 Tests, 2008
Again, this is not meant to cast aspersions but is meant to factually show that Newtown is spending approximately the same amount per pupil, but is receiving much better performance from its students. Every Dollar Counts and it appears the Newtown School District is making every dollar count much more than in New Milford.
From the New Milford Parent Teacher Organization (PTO) budget newsletter, “Q. Can’t we turn off some of those outside lights and save money? A. Studies have shown that lighting actually prevents vandalism, which can exceed annual lighting costs in just one occurrence. In fact, our security consultants endorsed our lighting.”
I can understand the lighting of the buildings all night long. However, what is the worst vandalism that can occur to the acres of parking lots we illuminate all night long, 365 days a year? Someone painting on the pavement? How much would a gallon of paint cost to paint over the vandalism? $25? This thought process of taking the path of least resistance instead of challenging the status quo needs to stop immediately. We need to think outside the box and remember that Every Dollar Counts!
From the New Milford Parent Teacher Organization (PTO) budget newsletter, “Q. Couldn’t we save money by combining the Town and the School’s Maintenance departments?
A. The square footage and acreage of buildings and grounds require a certain amount of people and equipment to maintain them. If the departments were combined, the same level of staffing would have to be maintained, with the only difference being where the dollars are budgeted.”
The same level of staffing would not need to be maintained as suggested at the supervisory level. I am quite sure that the number of supervisors could be reduced as they are not currently managing the maximum amount of employees possible. The School District also fails to consider the fact of the increase in purchasing power due to the combination of the maintenances departments. If you are purchasing double the amount of supplies and parts, I am sure there would be increased discounts for supplies and parts due to the volume purchased. Again the School District should challenge the status quo and demonstrate to the Town Council and Board of Finance why it cannot be done instead of making generalities with no factual basis. It is also disconcerting to learn that recently a Town maintenance employee resigned and joined the School maintenance department due to the fact that he was able to receive a sizable increase in pay. Every Dollar Counts and we should not accept assumptions as fact.
As part of Dr. Paddyfoote’s budget presentation her final thought was, “As educators, board members and collaborative partners, we are being challenged to preserve the benefits of public education for the children of New Milford at a time when the ability to provide public education is being seriously threatened due to a struggling economy. We are capable of meeting this challenge and we must in order to preserve a viable education system for our students.” I couldn’t agree with Dr. Paddyfoote more! Dr. Paddyfoote, I respectfully request that you begin the process tonight by agreeing to not “deferring your salary increase” until next July but instead accept the fact that the Town cannot afford to give you a raise this year or to defer it. Remember, Every Dollar Counts!
I feel that the Town Council and Board of Finance should reject, if possible, the budget presented by the Board of Education and Dr. Paddyfoote immediately. It is apparent from my cursory review of the budget that they have a policy of overestimating their utility costs and not facing the reality of the current economic climate. Based on my cursory review I have found $1,317,216.00 in potential savings based only on not giving raises and accurately estimating utility costs. How many other areas are there for potential savings? It may even be possible with further savings for us to have a net decrease in the proposed budget!
You may have noticed that there was a theme throughout this letter, Every Dollar Counts. It is interesting that this acronym, EDC, is also the acronym for the New Milford Economic Development Commission. As a Town, we need to realize that the real stabilization of a Town is through a healthy industrial and commercial tax base. The only way this can be accomplished is through proper and well thought out economic development. Several years ago the Town of Oxford took these steps and the fruits of their labor are now being realized. Even in this economic downturn they have increased their grand list by 4.5 percent. I hope that the Town Budget has given the tools needed to our Economic Development Commission and Town staff to promote economic development of our Town.
Thank you in advance for your consideration of my thoughts and findings.
Arthur H. Howland & Associates, P.C.
Paul S. Szymanski, P.E.
Explanation of Net Current Expenditure Per Pupil (NCEP)
From the Town of Monroe website:
Q # 30: How does the State calculate the Per Pupil Expenditure for a district? Shouldn't it be just dividing the total spent by the number of students?
No, the calculation is not that simple. The description below outlines the process by which a district's Per Pupil Expenditure is calculated. The formula translates raw numbers into expenditures that try to compare “apples with apples” of how a district supports education. Certain expenses can be included and others must be excluded.
It is not a fair comparison to simply divide the total spent by the number of students. The per pupil expenditure tries to determine the allocation to learning per student after costs of transportation and other expenses not directly related to the classroom are deducted.
Process for Determining Per Pupil Expenditure
The State Department of Education provides the following explanation of Net Current Expenditures Per Pupil (NCEP). NCEP measures education expenditures with a couple of adjustments, as explained below, for all the students for which a town is fiscally responsible, regardless of whether the town operates its own school or tuitions its resident students to other districts/regions or private schools. However, there are towns which do not offer in-district middle and secondary-level services. These towns either send the students to designated high schools in other towns or are members of regional school districts or inter district cooperatives. In such cases, these tuition and assessment costs are included in the sending town-based data, so that all 169 towns reflect prekindergarten through Grade 12. As applied to New Milford, the Sherman students are deducted from our Average Daily Membership count, explained below, and the Tuition Revenue received from Oxford is also deducted from our total education expenditures.
Average Daily Membership (ADM) represents the average daily membership calculated from the October 1st Public School Information System (PSIS) and the End of Year School Report (ED001) ADM represents resident students adjusted for school sessions in excess of the 180-day/900-hour minimum, tuition free summer school, full-time equivalent (FTE) prekindergarten pupils and participation in Open Choice.
Net current expenditures (NCE) are calculated as defined in Connecticut General Statutes Section 10-261(a)(3). NCE includes all current public elementary and secondary expenditures from all sources, excluding reimbursable regular education transportation, tuition revenue, capital expenditures for land, buildings and equipment, and debt service. Statute provides for the inclusion in NCE of the principal portion of debt service for NCE eligible items. For many districts, this represents debt incurred for certain minor school building repairs and roof replacements. Net current expenditures per pupil (NCEP) represents NCE divided by ADM. The NCEP Rank is a town's rank between 1 (highest) and 166 (lowest) for 2007-08.
An important note, beginning with 2007-08 the State Department of Education NCEP total number of reporting districts 166 districts, a decrease of 3, from 169 total districts in previous years. This adjustment is due to a shift from prior Education Reference Group (ERG) to District Reference Group (DRG) classification changes instituted by the State Department of Education in 2007-08.