Chariho School Parents’ Forum

January 25, 2008

Sylvia Thompson presents options to Chariho

Filed under: Budget,Hopkinton — Editor @ 10:52 pm

Hopkinton Town Council member Sylvia Thompson presented some information to the board during the last budget hearing.

The first document is a letter asking the board to consider her proposal that is credited to provide funds for all capital issues requested yet not include a budget increase.

cover-to-sch-comm-re-08-09-budget.doc

The next document is a budget summary

07-chariho-audit-09-budget-sum.doc

Also included is a spread sheet showing how a 4% increase in the Chariho budget can actually be over 7% for a particular town.

 towns-contribution-after-state-aid-2007.doc

And finally is a motion made at the Hopkinton Town Council meeting requesting the Fiscal Director to “examine the fiscal condition of the town” (including Chariho).

motion-state-of-town-fin-questions-part11.doc

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29 Comments »

  1. Ms. Thompson is unhappy there are annual surpluses in the Chariho budget? Is a 3% to 5% deviation really that bad? What would she be saying if there were shortfalls?

    Personally, I prefer surpluses to shortfalls.

    It seems to me that there should be some “best practice” associated with how much of a cash cushion an entity such as the school district should have. The nonprofit on whose board I serve has been told by our CPA we should have at least 3 months of operating cash on hand (we don’t); that standard would require Chariho to have some $13 million onhand. That seems excessive given the nature of Chariho’s funding stream, but I would guess the number is greater than zero (or $700K as Ms. Thompson recommends, which is barely 1% of the budget).

    Just for fun, I took a quick peek at the FY06 Hopkinton audit (helpfully located on their website), and found to my surprise that their unrestricted fund balance as of June 2006 was over $3 million — as a percentage of budget, higher than Chariho’s (which I have read here is around $6.5 million on a budget of over $50 million?), and which is an enormous percentage of the municipal budget Hopkinton is responsible for (over half!). And in FY06, the surplus increased by over $600K — about 3% of the overall budget, fairly well in line with Chariho’s surpluses.

    Charlestown has a few million bucks in their unrestricted fund balance, too; alas, Richmond doesn’t have such data online, so I will have to obtain it on my own.

    In any case, now I am confused. Am I interpreting these data incorrectly? Why shouldn’t Chariho (which owns more fixed assets and has higher cash flow) maintain a sizable fund balance just like Hopkinton? Does Hopkinton use their fund balance to zero out tax increases on the municipal side of the budget (in FY06, the town budget and tax collection numbers look like they went up way more than school costs did)?

    Hey folks, please tell me what I’m getting wrong here.

    Thanks, David

    Comment by david — January 26, 2008 @ 4:45 pm | Reply

  2. I’m also interested in why Hopkinton’s municipal (i.e., non-education) budget is so much larger than Richmond’s. I haven’t done a side-by-side comparison yet, but I’ll get around to it. It may just be that Richmond badly underfunds their municipal government, but I would be looking at those discrepancies if I were trying to bring costs in line in Hopkinton, too.

    Comment by david — January 26, 2008 @ 4:49 pm | Reply

  3. Why would any government entity need a large surplus? What kind of emergency could possible costs $13 million or even $1 million? I believe Ms. Thompson information lists $700,000 as the standard surplus (or something like that). $700,000 still seems unreasonably high to me, but I could live with it. $2 million is absurd. $4 million seems unethical.

    If Hopkinton’s surplus is as high as you believe, that I don’t like that either, but Hopkinton hasn’t lied to the taxpayers trying to get a bond approved when they millions on hand. Chariho has and continues todo so.

    I believe the biggest difference between Hopkinton’s spending and Richmond’s is the police department. The two towns spend the most on policing of any towns and cities in Rhode Island as a percent of their budgets, but Hopkinton still spends about $1 million more than Hopkinton. Both towns overfund with Hopkinton being the worst of the two.

    Fighting against the police department in Hopkinton is a dangerous game if you value your personal liberties. We’ve had a few vocal people come up with legal problems when they took on police department spending and size. Even as an anonymous voice, I won’t take on the police.

    Comment by Curious Resident — January 26, 2008 @ 5:16 pm | Reply

  4. According to information I found, Hopkinton budgeted $5,511,495 for fiscay year 20007. Richmond budgeted $3,701,899. A difference of $1,809,596.

    Hopkinton budgeted $1,997,681 for police. Richmond budgeted $1,179,527. A difference of $818,154.

    Another big item with a large diffence is Employee Benefits. I’m not sure if this includes police employees?

    Hopkinton budgeted $1,110,179. Richmond budgeted $548,927. A difference of $561,252.

    Public Works in yet another area. Hopkinton budgeted $1,141,885. Richmond budgeted $628,619. A difference of $513,266.

    One place where Richmond budgeted more than Hopkinton is Debt Service. Richmond was ahead by around $207 thousand.

    While I like to think both towns could reduce their budgets significantly, especially the police departments, the neither spends or wastes anywhere near Chariho. I’m more to take on the government Davids but our energy is better used on Goliath until he has been slain.

    Comment by Curious Resident — January 26, 2008 @ 5:31 pm | Reply

  5. You want to reduce the budgets for police? Now I’ve heard it all! Where would you propose cutting the police budget?

    Comment by CharihoParent — January 26, 2008 @ 7:10 pm | Reply

  6. There is an officially “recommended” amount Chariho is supposed to have – that number is $683,000. Thus Mrs. Thompson’s recommendation of $700k. If Hopkinton is grossly above its recommended then all I have to say is thank goodness the blogs have discovered another issue to resolve.

    Comment by bill felkner — January 26, 2008 @ 7:11 pm | Reply

  7. What’s the rationale for the $683K?

    Comment by david — January 26, 2008 @ 8:43 pm | Reply

  8. Trying to compare different entities for the purposes of what type of cash reserve is required is an exercise in futility. There is no one size fits all.

    Comment by RS — January 26, 2008 @ 9:24 pm | Reply

  9. The auditors require that the town, as a taxing authority, must have a certain amount in a surplus fund balance. I am not sure of the technical term for it. It is because each of the 3 towns are the ones who collect the taxes for the municipal and school budgets.

    Chariho does not have a substantial fund balance as they are not a taxing authority. They do have the $700,000 number because the school committee felt it would be prudent to have a small fund set aside for an emergency. I agree with that.

    The way I understand it is that the amount is based on a percentage of what the total expected expenses are for the next budgeted year. It stands to reason that as the budgets increase the fund balance would increase proportionately.

    Each town is not suppose to exceed this balance. If it does, it is suppose to use the difference towards the next budget to reduce the tax burden.

    Why it is such a large figure, I don’t know. I believe it does represent the ability of the town to pay its bills for 3 months ahead. And as the towns are the ones who send Chariho the check, they are the caretakers of the fund balance. Each of the 3 towns has to keep their own.

    Whether it is common practice or mandated by state law, I couldn’t tell you.

    It would stand to reason that if Chariho became the taxing authority for the school district, that this would change and they would have to keep a substantial fund balance. The towns would have to reduce theirs substantially.

    As a taxpayer, unless someone could convince me otherwise, I like the money in the hands of the towns.

    Comment by Lois Buck — January 26, 2008 @ 10:17 pm | Reply

  10. If you want my opinion on the police budget, review the archives of the Hopkinton Speaks blogs. There’s tons that has been written about the subject. Hopkinton could easily reduce their spending in half.

    Even if one were to think it wise for Chariho to have millions of our taxes in surplus, Chariho should be honest with the taxpayers and show they are budgeting to accumulate a surplus. They instead hid millions in over budgeted surplus.

    They just can’t seem to be open and honest with the public. You know, the people whose money they take as if it were their own.

    Comment by Curious Resident — January 27, 2008 @ 12:11 am | Reply

  11. Not sure what it is based on – I assume it is a set formula out of the school’s control – presumably from the state. Otherwise, why would they publish it. The school wants a $2M+ surplus but the recommended is $683,000. I doubt they would produce a “recommended figure” that was contrary to what they are requesting.

    Comment by Bill Felkner — January 27, 2008 @ 11:09 pm | Reply

  12. What is the rationalle for that?

    Each town already keeps a substantial surplus. Why do they feel they need to keep more of our tax dollars? Is there any emergency that would require such an enormous surplus? The towns are just an emergency meeting away to fix any emergency.

    Comment by Lois Buck — January 28, 2008 @ 9:55 am | Reply

  13. RS is correct. A municipality must carry a larger cash reserve to pay not only itself but the mandated (by voters) school budget and all bonds. The school has a much lower cash reserve necessary because its budget is supplied by the towns (after the budget approval) not the taxpayer.

    Taxpayers earn their money, which is then appropriated in the form of property tax to the town (or the feds or the state). The town is responsible for collecting this cash and paying all its bills. The school does not have to collect money in order to pay its bills – it simply bills the town just like all other vendors, therefore its need for a cash reserve is much less.

    Other businesses have different needs and services and therefore different cash reserve accounts.

    Comment by BarbaraC — January 28, 2008 @ 5:28 pm | Reply

  14. While I do appreciate everybody’s opinion on this subject, I was actually hoping to find guidance or regulations or CPA/auditor rules regarding fund balances.

    It looks like it’s a local discretion decision. EWG regional school district has a policy published on-line regarding their fund balance and its administration:

    http://ewg.k12.ri.us/district/policy/3305.HTM

    Even the lower 2% number shown in this policy would be much more than $683K given Chariho’s budget size, but even the larger 5% figure is certainly far less than $4 million. Again, where did that $683K number come from?

    For a town school district, where the town has oversight of the school budget, I understand that there would be no need for a school department to maintain a fund balance. In a district like Chariho, that’s not true.

    Comment by david — January 28, 2008 @ 9:04 pm | Reply

  15. I believe the desire for a sizable fund balance may be tied to bond rating; I found some websites that address fund balance (i.e., cash reserve) as an important component of successfully getting a high bond rating (which of course lowers interest rates).

    Comment by david — January 28, 2008 @ 9:19 pm | Reply

  16. So in order to borrow $8.4 million, we have a surplus fund of $11 million? In the world of Chariho that probably would make sense.

    The best entity to answer questions about Chariho’s budget procedures would be Chariho’s administration. Unfortunately, transparency isn’t one of their strengths (but if you ever need to hide something, give’em a call). Pretty darn sad that there are so many questions about Chariho, both financially and educationally, and so few answers.

    That about sums up Hopkinton’s rejection of a bond in a nutshell.

    Comment by Curious Resident — January 28, 2008 @ 11:07 pm | Reply

  17. Hi!
    AN OBSERVATION:
    The debate/discussion needs to be improved but more progress needs to be made! We have 26 total town council and school committee members in the Chariho region. When will ALL really be held accountable? Some work harder than others,speak out more, more inquisitive and forceful.But I think it has improved certainly recently.Not long ago and really still today, if you question things you are isolated but the chance of having others join you has improved.
    REMEMBER WITH THE MAINTENANCE OF EFFORT CLAUSE SCHOOL DISTRICTS START OFF WITH THE SAME AMOUNT AS THE PREVIOUS YEAR IN THEIR BUDGETS MINUS NONRECURRING EXPENSES AND A DECREASE IN ENROLLMENT.IT IS BOTH A PRO STUDENT AND PRO TAXPAYER THING TO HAVE MANAGEMENT STUDIES AND LOOK AT FINANCES BETTER BECAUSE IT MAGNIFIES OPPORTUNITIES FOR STUDENTS AND EFFECTIVELT SPENDS TAX DOLLARS.
    Regards,
    Scott Bill Hirst
    Chariho’71
    Member,Hopkinton Town Council,1996-2004
    Member,Hopkinton Finance Board,1991-1996

    Comment by Scott Bill Hirst — January 30, 2008 @ 11:53 am | Reply

  18. I don’t know where you folks get your Richmond figures from but they are totally wrong, sometimes you’re too high, sometimes you’re too low but you’re not correct. Please look at the Richmond website for the budgeted amounts that were approved by the voters at the last FTM. Until you get the figures correct I’ll keep the opinion that you’re spewing out numbers to skew the results just to satisfy your positions.

    Comment by CharihoParent — February 3, 2008 @ 7:43 am | Reply

  19. By the way, Sylvia Thompsons figures for Richmond are incorrect. Here are the correct figures for Richmod:

    2007 – 2008 before state aid $17,333,510
    2007 – 2008 state aid $5,945,239
    2007 – 2008 net amout $11,388,271

    2008 – 2009 before state aid $17,871,213 (proposed)
    2008 – 2009 state aid $5,945,239 (if level funded)
    2008 – 2009 net amout $11,925,974

    Different between budgets $537,703

    Percent increase is 4.72%

    Comment by CharihoParent — February 3, 2008 @ 7:45 am | Reply

  20. Don’t know if you know how, but you may want to link to the source of your information.

    Without a link, Ms. Thompson’s numbers are as good as yours in my book. In fact, since she is fighting against wasteful spending, and you’re fighting for wasteful spending, then her credibility is much higher.

    Here’s a hint, highlight the address line, click on “edit”, click on “copy”, then place your cursor in the text box, click on “edit”, and click on “paste”. Once you get the hang of it you should be able to do this in seconds.

    You can also copy and paste directly from the budget, although I think a link it more solid then a cut and paste.

    Comment by Curious Resident — February 3, 2008 @ 9:46 am | Reply

  21. For everyone’s information, Governor Cacieri has level funded Education Aid budgeted in ’08-’09 for our school districts – Charlestown @ 2,002,838 — Hopkinton @ 6,241,352 — Richmond @ 6,188,615. Most of the other state districts were also level funded with only 6 districts having a small amount of funds cut for ’08-’09. Remember the legislature can adjust these numbers as they negotiate the budget difficulties.

    I do not know what he has presented as state aid to towns at this time. His suggested budget to the legislature has pretty dramatic cuts (I hope most of these remain) but so far a 15% cut in aid for towns and cities is not confirmed.

    Richmond and Hopkinton taxpayers have the hardest time with local and state budgets where the school is concerned. We need to work together to change the Chariho Act financial arrangements for all taxpayers who need to function for our children as a district, not as separate towns. Even if we had a merged tax base, we would still need to argue for accountability and a more transparent budget and contract process. This will not happen overnight but, taking a lesson from the NEA rulebook, keep the pressure on.

    Comment by BarbaraC — February 3, 2008 @ 2:46 pm | Reply

  22. This is from an entry I posted at HopkintonSpeaks:

    I don’t know if this helps or hurts, but this is a RI state website that references some numbers.

    http://www.ridoe.net/Finance/Funding/aid/2008/Final%20FY%2008%20Education%20Aid%20Entitlements.pdf

    Is it possible that the Richmond numbers from the Financial town meeting were in error?

    From another post:

    The following references proposed state aid for education. If it stays as is, the numbers are level funded for the next budget year.

    http://www.ridoe.net/Finance/Funding/aid/2009/FY_09_Governors_Recommendations.pdf

    Just from these sites, it would appear that Councilor Thompson’s numbers are in fact correct.

    Comment by Lois Buck — February 3, 2008 @ 10:21 pm | Reply

  23. OK, using the figures from the Rhode Island Dept of Education, the figures Sylvia Thompson provided are still incorrect. I also used the budget numbers provided by Chariho for the Town of Richmond. here it goes.

    2007 – 2008 before state aid $17,333,510
    2007 – 2008 state aid $5,759,926
    2007 – 2008 net amount $11,573,584

    2008 – 2009 before state aid $17,871,213 (proposed)
    2008 – 2009 state aid $5,759,926 (if level funded)
    2008 – 2009 net amout $12,111,287

    Different between budgets $537,703

    Percent increase is 4.72% not the whopping 7.22% increase that Sylvia Thompson chooses to report.

    It comes out to the same darn answer as what I had before!

    And for the record, I think an increase of this amount is just way to high to be managable by Richmond even if the town tried to level fund what was obligated by contracts. Unless the budget changes even more favorably after the Budget Hearing, I will be voting against this budget. I want to see real solutions to the real problems, not a band aid approach of taking from the surplus funds just to be in the same predicament in the next budget season when things will only be worse because the squeeze will be even tighter due to the state legislature being so short-sighted and not properly helping the towns throught the state with the mandates as passed by the legislature and the DOE.

    Current year’s figures were obtained from:
    http://www.ridoe.net/Finance/Funding/aid/2008/FY%202008%20District%20Aid%20Payments%20for%20Web%20w~literacy.pdf

    Proposed figures for 2009 were obtained from:
    http://www.ridoe.net/Finance/Funding/aid/2009/FY_09_Governors_Recommendations.pdf

    Comment by CharihoParent — February 4, 2008 @ 7:10 pm | Reply

  24. The original budget had Richmond at $18,169,625. Since then, the school committee and Mr. Ricci have made cuts, or…they have simply applied more of the budget surplus towards the budget to reduce the impact on the towns. Thanks, CR for this possible observation.

    The new number is $17,871,213. They recognized that they had caused two towns to exceed the 5% cap.

    Mrs. Thompson at the time had the correct numbers.

    Perhaps, her letter and others complaining woke them up to the fact that they had caused some serious financial burdens on the two towns.

    Comment by Lois Buck — February 5, 2008 @ 10:09 pm | Reply

  25. Same question, different forum. Was the budget number reduced by applying more of the surplus or by cutting spending?

    What about the incredible increase in aides salaries in every school? Anyone?

    Comment by Curious Resident — February 5, 2008 @ 11:07 pm | Reply

  26. Mr. Felkner, you were there… what was it?

    Comment by CharihoParent — February 6, 2008 @ 4:47 am | Reply

  27. I’m afraid I don’t have it in front of me here, but I believe it was 1 -2 positions removed (maybe 1 1/2) Teachers Assistants I believe – maybe the half was diff. Also got rid of Chinese. A few other items. Most of the savings was from shifting the surplus. We started with about 2.4M and ended with about 1.5M

    Comment by Bill Felkner — February 6, 2008 @ 11:32 am | Reply

  28. What you’re saying then is that it is just shifting money around more than anything else that caused the change in the numbers. No real change in attitude and cutting the budget where it needs to be cut, mainly salaries.

    Comment by CharihoParent — February 6, 2008 @ 6:09 pm | Reply

  29. It’s not cutting salaries when you spend more in this budget than the last. It’s not cutting positions when you have more positions in this budget than the last.

    The way Chariho operates, I expect that they reduced the increase and called it a cut. If this is what happened, just one example of them treating the taxpayers like ignorant fools.

    Comment by Curious Resident — February 6, 2008 @ 7:42 pm | Reply


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