December 08, 2011WOLFEBORO — School Board Chair and Finance Committee member Jack Widmer presented what he referred to as "a very, very lean budget" to the Governor Wentworth Regional School Board during a preliminary hearing on the 2012-2013 budget held this past Monday evening, Dec. 5, at Carpenter School.
"Recognizing the difficult economic times the administration and finance committee are proposing an extremely frugal budget," he warned before going over any specifics.
Challenged with building a budget that balanced both the educational needs of students and the financial ability of the taxpayers who support the schools, Widmer explained some of the factors contributing to the final figures.
First the Northeast region consumer price index (CPI) has increased by 3.56 percent over the past year and is anticipated to continue to rise, he explained. This means that goods and services purchased in the fall of 2010 will now cost quite a bit more for the same items.
The committee also took into account the impact property taxes have on the district's taxpayers and the fact that there was a significant increase to most towns because of a reduction in federal revenues.
Despite these unfavorable factors, Widmer said the administration and finance committee built a budget that they felt was well balanced.
The general fund, which has the most impact on local property taxes, was significantly reduced in most program areas.
"In spite of adding considerable building space to the Kingswood site the overall increase to the general fund was 0.54 percent," said Widmer. "With inflation at 3.5 percent and climbing that is an incredibly frugal budget."
The two major factors contributing to the increase in general fund expenses are the N.H. retirement system expense and an increase in energy expenses.
Within the general fund the employee retirement expenses are up 0.38 percent largely due to the New Hampshire retirement system cost shifts from the state to local government entities.
When the fiscal 2012 budget was approved the new pension funding law had not yet been adopted, explained Widmer. Consequently the increase from 10.62 percent to 11.3 percent had not been budgeted for. However he said, "a special meeting to raise the funds was held during which our teachers and administrators agreed to modify their work schedules to make up the difference between the budget and the actual cost." As a result the teacher contract was reduced from 185 workdays to 180 with five days of volunteer participation. All administrators also agreed to work one week without pay.
Also included in the nearly $3.5 million dollar figure are the step increases in salary for teachers as well as eliminating four positions, which the administration anticipates will be handled through natural attrition.
Under non-employee related expenses most accounts were reduced with the exception being those related to the 152,448 square-feet of additional building space that has been added at the Kingswood site. Primarily it is these building related accounts which reflect the increase, the major one being energy costs.
Widmer explained of the 74 percent increase in building space, "In considering the increases in energy expenses it is important to understand that we now have a lot more building space [at the Kingswood site] than a year ago. Not only are we heating a larger space, but for the first time we are cooling it as well."
Despite the 23.8 percent increase in energy costs the complex's new geothermal heating and cooling system is saving the district approximately $392,000 in this budget alone. Traditional heating and cooling would have resulted in an increase of about $577,570 instead of the $185,900 proposed – nearly triple the cost.
In addition to the general fund budget there are four warrant articles for voters' consideration, which will also have an impact on property taxes.
These include an annual building maintenance article for the district totaling $150,000 and three collective bargaining agreements.
The Governor Wentworth Support Staff Association (GWSSA) agreement totals $77,003 and includes a two percent wage increase for each of the next two years.
The Governor Wentworth Education Association (GWEA) agreement calls for a 1.5 percent wage increase in each of the next two years for teachers and totals $246,512.
And the Governor Wentworth Administration Team (GWAT) collective bargaining agreement calls for a two percent wage increase, totaling $32,007.
A fifth warrant article asks voters to approve that the district use $40,000 from its health insurance reserve as revenue for fiscal year 2013. With a current balance of about $45,000 the administration would like to use some of that money to help reduce taxes.
The debt service portion of the budget shows a decrease of $17,796.
During the fiscal 2013 budget the district will be retiring the debt of the Effingham, New Durham and Ossipee schools. The Ossipee School roof bond is slated for retirement in fiscal year 2014.
On the revenue side in the proposed budget, the committee anticipates a net decrease in state and federal funding of $14,202. This includes a $152,731 cut in state vocational aid and a $309,563 cut in other federal revenues, offset by a $128,000 increase in state catastrophic aid and a $145,730 increase in state child nutrition aid.
In conclusion, the combination of general fund expenditures, the four warrant articles and both federal and food service funds result in an overall budget increase of 1.14 percent, which is well below the current CPI increase, said Widmer. The proposed budget for fiscal year 2013 totals $46,720,715, an increase of $525,421 from the 2012 budget.
The overall impact of the district assessment, or the amount to be raised by taxes, is projected to be about 2.29 percent or $800,980.
"Across the district the average increase in [school tax] rate for individual towns is projected to be about a dime," explained Widmer. The range includes Brookfield, which will see the greatest increase at 46 cents, and Effingham, which will have a decrease of $1.73.
It is important to know that the default general fund budget, which comes into play if the proposed budget is rejected by voters, would be $46,952,114, $736,921 more than the proposed general fund budget and would include many of the items that had been cut.
"This is a clear indication of how frugal the budget is that we are proposing," commented Widmer.
The board voted to approve the preliminary budget as presented.
Widmer thanked the administration and members of the finance committee for "understanding how difficult it is in these economic times to put a budget together that supports the educational needs of the kids, but also keeps in mind the taxpayers who support it."
The Governor Wentworth Regional School Board will meet again on Monday evening, Jan. 2 beginning at 7 p.m. in the Skylight Dining Room during which the final budget hearing and adoption will be held.
The district's Deliberative Session will be held on Saturday, Feb. 4 at 10 a.m. in the Kingswood Arts Center.