Subscribe Feed (RSS)Financial Crisis - What is Your District Doing to Plan?
October 14th, 2008 by steve | Filed under District Planning.Since the financial crisis hit, districts are beginning to belt-tighten for the remainder of 2008-2009 and in anticipation of 2009-2010. Please comment on what your district is doing. Are you freezing expenditures?
Tags: District Planning
We are looking at a laundry list of what we could cut in the current year and for 09-10. We believe that we will need a list as no one code will generate the expected amounts. We are assuming a cut in aid for 08-09 and 09-10 and are planning for the worst. The deeper that we get into the current year the more difficult to make substantial cuts. Nothing is off the table. A freeze will be the first suggestion. How much of a freeze is the question. e.g Do we cancel field trips for the rest of the year? We will be discussing with our BOE next week. A real concern for 09-10 is what the ERS and TRS rise will be. For Tully CSD a rise from 8 to 12% equals $280,000.
It is an “interesting” time.
Regardless of whether or not districts cut expenditures, I think it’s important to educate our publics about district efficiencies and how we are safeguarding the public’s money. This can be approached in three different areas: maximizing revenues, monitoring expenditures, and safeguarding funds. Examples could include pursuing new revenues (such as retirees’ drug subsidies), identifying non-essential expenditures, and ensuring deposits are fully collateralized. Although these are routine activities for all of us, we probably can do a better job in communicating that we are doing them.
Because of the magnitude of this crisis, it may have impact on our current NYS laws and regulations. Careful review of its impact on local districts will be critical, especially for smaller districts that do not have the capacity to “weather the storm.”
I was not sure where to post this, so I posted it here as well as in a new forum topic.
We are in the process of closely analyzing chaperones, subs, paraprofessionals, custodial overtime, clubs, and energy usage by building. An idea that was floated was to make building administration accountable for all costs within their building including energy usage and other areas mentioned above. Has anyone adopted this level of accountability at the building level?
Unfortunately what I mentioned above will only produce probably a drop in the bucket. Any creative ideas on cost reductions would be an enormous help state-wide as we head into our budget season. An idea or two from everyone would produce a thousand ideas state-wide that we can all use.
We have implemented what we are calling a “soft freeze” on all 2008-09 expenditures. Any purchase order request above $1,000 will require the written approval of an assistant superintendent before it is even considered by the purchasing agent. We have worked with our financial software company (WinCap) to create a procedure whereby the purchase order requisitions that meet certain criteria will automatically be routed to one of the three assistant superintendents (one who is reviewing all elementary school requests, a second who is reviewing all secondary school requests, and the thrid who is reviewing all other requests) before being presented to the purchasing agent for approval. The procedure can be modified to reduce the amount from $1,000 to some other amount. This will depend upon how creative the program administrators become when they suddenly have the need to create a lot of purchases of $999 or less. It is not by any means an “answer” to the crisis that is about to come, but it has already had a “chilling” effect on the purchase process.
A few things to consider:
1. There is some good news - natural gas, gasoline and diesel fuel have all fallen in price and are unlikely to rebound quickly in a slumping economy. This means that the IRS mileage reimbursement rate is also likely to drop substantially effective January 1, 2009. Also, most vendors have by now stopped adding surcharges for deliveries due to cheaper fuel. If any still are, now is the time to ask them to stop.
2. There may be a steep decline in the number of retirements among professional staff due to losses in personal investment accounts (403b’s and IRA’s) This will mean less “breakage” for our budgets going forward and a very tight job market for new teachers coming out of school. What effect will this have on your District?
3. ERS and TRS rates are likely to increase substantially - but not in 2009-10. There will likely be an increase in 2009-10 but there is generally a two-year lag built into these rates. That may be the good news. The bad news is that those rates are likely to stay considerably higher for a long time after 2010-11, because the drop in the investment markets has been so large.