Showing posts with label Carrollton Farmers Branch Budget Woes. Show all posts
Showing posts with label Carrollton Farmers Branch Budget Woes. Show all posts
Wednesday, November 11, 2009
CFBISD Budget Deficit for 2009-2010 now projected to exceed $11 million!
Buried in the consent agenda for the for November 12, 2009 board meeting, is the Financial Report for September 2009. This report includes an amended budget for 2009-2010 fiscal year, according to this report the projected expenses with be $2,985,918 HIGHER than the budget approved by the Board of Trustees in late August. Previously, the budget deficit projected for 2009-2010 budget was $8,204,952. The amended budget now projects that new budget deficit will be $11,190,870. This deficit will be funded by depleting the district’s general fund which is essentially the district’s savings account.
CFBISD September 2009 Financial Report
Monday, August 31, 2009
A better way to Budget
Open budgeting allows community to present their demands and priorities for improvement, and influence through discussions and negotiations the budget allocations made by the school district. An open budget process at the district level may include: post budget alternatives on the web solicit feedback from the public, hold town hall meetings to inform the public and solicit ideas, create a committee with a membership from various constituencies in the community to advise the board. Whenever, possible budget decisions should be made by those most impacted by the budget; the district should implement site base or participatory budgeting.
Participatory Budgeting, at its most basic, refers to turning over budgetary decisions to the community members impacted by the budget. Most of the well-known examples of participatory budgeting involve city administrations that have turned over decisions over municipal budgets, such as its overall priorities and choice of new investments, to citizen assemblies. Other examples involve school budgets, housing project budgets, and the budgets of cooperatives and non-profit organizations.
Participatory budgeting consists of a process of democratic deliberation and decision-making, in which parents, teachers, students, and administrators (community members) decide how to allocate part of a local school ‘s budget through a series of local assemblies and meetings. It is generally characterized by several basic features: community members identify spending priorities and elect budget delegates to represent their local school , budget delegates transform community priorities into concrete project proposals, district level facilitate and provide technical assistance, community members vote on which projects to fund, and the school district implements the budget priorities and budget projects. Various studies have suggested that participatory budgeting can lead greater government transparency and accountability, increased levels of public participation (especially by marginalized residents), and democratic and citizenship learning.
http://www.cfbisdnet.blogspot.com/
Friday, August 28, 2009
Open Letter to Board of Trustees
To: Board of Trustees
Carrollton-Farmers Branch School District
Dear Trustee:
It is unfortunate that the board of trustees depended primarily on representations made by the district administration, and did not seek input and expertise in the community. The board of trustees restricted public disclosures and input to the minimum required by law. Considering the district is facing a significant tax rate next year, it is imperative that the board of trustees include the community in the budget process. The district’s budget should reflect the values and the priorities of the community.
The Board of Trustees should publish all financial reports, supplemental data and financial plan submitted to the TEA on the district web site. Obviously, the community has a right to know how the their money is spent, the Board of Trustees should require that district join the over 300 school districts in Texas and publish the district’s check register on the district web site. Because of continuing financial challenges facing the district, financial information will become more transparent to the public either through the TEA web site, or through numerous document requests made under the Texas Public Information Act, Chapter 552, Texas Government Code. It is my hope that the board of trustees will take the lead on greater financial transparency.
Carrollton-Farmers Branch School District
Dear Trustee:
It is unfortunate that the board of trustees depended primarily on representations made by the district administration, and did not seek input and expertise in the community. The board of trustees restricted public disclosures and input to the minimum required by law. Considering the district is facing a significant tax rate next year, it is imperative that the board of trustees include the community in the budget process. The district’s budget should reflect the values and the priorities of the community.
The Board of Trustees should publish all financial reports, supplemental data and financial plan submitted to the TEA on the district web site. Obviously, the community has a right to know how the their money is spent, the Board of Trustees should require that district join the over 300 school districts in Texas and publish the district’s check register on the district web site. Because of continuing financial challenges facing the district, financial information will become more transparent to the public either through the TEA web site, or through numerous document requests made under the Texas Public Information Act, Chapter 552, Texas Government Code. It is my hope that the board of trustees will take the lead on greater financial transparency.
The new CFBISD budget triggers financial solvency review by TEA.
The new Financial Solvency Review provisions passed by the state legislature (HB 3) require that the TEA implement a review process to analyze district revenues and expenditures for the preceding school year, and projected district revenues and expenditures for the current school year and the following two school years. Additionally , if a district a projects a deficit for a school district general fund within the following three school years, to provide TEA interim financial reports, supplemented by staff and student count data, as needed, to evaluate the district's current budget status. A deficit is projected, a district develop a financial plan and submit the plan to TEA for approval To discourage a rapid depletion of a district's general funds balance, TEA must established an alert in reporting system.
The Board of Trustees should publish all financial reports, supplemental data and financial plan submitted to the TEA on the district web site.
The Board of Trustees should publish all financial reports, supplemental data and financial plan submitted to the TEA on the district web site.
Friday, August 21, 2009
CFBISD BUDGET BLACKMAIL
If for third year in a row the CFBISD Board of Trustees approves a deficit budget for 2009-2010, the voters of district will be forced to accept a significant tax increase or the district will be insolvent. Although new proposed budget includes cuts in pre-kindergarten programs, staff health insurance, secondary class sizes and staff reductions, it is too little too late. Serious budget changes should have been made beginning in 2007-2008 school year when for the first time the district’s revenues did not cover its operating expenses.
For 2009-2010, the Texas State Legislature required Texas Education Agency (TEA) to include an alert in the new Financial Solvency Review System when a school district has significant reductions in its general fund balance. There several reasons for this:
1. By depleting significantly the general fund balance to fund budget deficits, a board of trustees of a school district is avoiding the underlying problem --expenses are growing at faster rate than revenues. For example, the Carrollton Farmers Branch Independent School Board of Trustees approved a budget resolution for the 2007-2008 school year with a deficit of $6 million. And, in 2008-2009, the Board of Trustees approved a deficit of $13.5 million. These deficits were to funded by depleting the general fund balance. Because the underlying budget issues were not addressed, the district could face the prospect of a tax rate increase of almost 9% to fund the budget for 2009-2010 school year. The proposed $220 million budget for 2000-2010 includes a mandated raise for all employees, costing about $3.2 million. This budget is about 7.5 percent less than last year. Cuts were made through changes to the pre-kindergarten program, staff health insurance, secondary class sizes and staff reductions. This budget will still result in a $ 8.3 million deficit rather than earlier $10 million deficit projected earlier.
2. If the board of trustees does not approve a tax rate increase, and elects to approve a deficit budget for the third year in a row, next year voters will be left with two choices a substantial property tax increase or an insolvent school district.
3. By depleting the general fund balance, a Board of Trustees of a School district is increasing future budget deficits. General fund balances are invested and return revenue in the form interest. This interest income stream is lost from future budgets. The depletion of the general fund has the affect on future budgets as if the district borrowed the money, and is paying an interest rate equal to the interest rate the district would have received if funds remained in the general fund. Depleting general funds to cover operating expenses is single one-time fix. However, operating expenses are continuous and tend to increase. Deficits occur when expenses increase at faster rate than revenues. Funding operating expenses from the general fund does not increase future revenues nor decrease future expenses. Because It is not surprising the Carrollton Farmers Branch School District Board of Trustees found, it self dealing with larger deficit for 2008-2009 school year than in 2007-2008. By depleting the general fund to address the 2007-2008 deficit, the board did not address the issue of the increasing disparity between the growth of the district's expenses and revenue.
4. By depleting the general fund balance, a Board of Trustees of School district may create future cash flow difficulties, or even insolvency for a school district. The timing and speed in which a district receives cash from revenues is dramatically different from timing and speed in which a district spends cash to cover expenses. Balances in the general fund are used to manage these cash flow differences. As operating budgets continue to grow rapidly, it becomes necessary to districts to maintain larger general fund balances to manage its cash flow needs. In period of time, when school districts find it difficult to balance operating budgets, it becomes all but impossible for a district to increase balance of its general fund. One proposal 2009 state legislative session would have required that a district maintain minimum general fund balances equal to at least two months of the district's operating budget. The Carrollton Farmers Branch ISD operating budget will exceed $220 million dollars for 2009-2010 school year. Based on two month requirement, the district should maintain a general fund balances of about $37 million. For fiscal year ending in August 2008, the district reported general fund balances of $60 million. The Board budgeted a deficit of $13.5 million for 2008-2009 school year to be funded from the general fund. If the budget is accurate, the current general fund balance is approximately $47.5 million; If the district adopts the $220 million budget with a deficit of 8 million dollars, the general fund balance will decrease to approximately 44 million. – barely above the two month balance requirement of $37 million.
As a consequence, the voters will have no choice but to support a tax increase or the district will face insolvency!
For 2009-2010, the Texas State Legislature required Texas Education Agency (TEA) to include an alert in the new Financial Solvency Review System when a school district has significant reductions in its general fund balance. There several reasons for this:
1. By depleting significantly the general fund balance to fund budget deficits, a board of trustees of a school district is avoiding the underlying problem --expenses are growing at faster rate than revenues. For example, the Carrollton Farmers Branch Independent School Board of Trustees approved a budget resolution for the 2007-2008 school year with a deficit of $6 million. And, in 2008-2009, the Board of Trustees approved a deficit of $13.5 million. These deficits were to funded by depleting the general fund balance. Because the underlying budget issues were not addressed, the district could face the prospect of a tax rate increase of almost 9% to fund the budget for 2009-2010 school year. The proposed $220 million budget for 2000-2010 includes a mandated raise for all employees, costing about $3.2 million. This budget is about 7.5 percent less than last year. Cuts were made through changes to the pre-kindergarten program, staff health insurance, secondary class sizes and staff reductions. This budget will still result in a $ 8.3 million deficit rather than earlier $10 million deficit projected earlier.
2. If the board of trustees does not approve a tax rate increase, and elects to approve a deficit budget for the third year in a row, next year voters will be left with two choices a substantial property tax increase or an insolvent school district.
3. By depleting the general fund balance, a Board of Trustees of a School district is increasing future budget deficits. General fund balances are invested and return revenue in the form interest. This interest income stream is lost from future budgets. The depletion of the general fund has the affect on future budgets as if the district borrowed the money, and is paying an interest rate equal to the interest rate the district would have received if funds remained in the general fund. Depleting general funds to cover operating expenses is single one-time fix. However, operating expenses are continuous and tend to increase. Deficits occur when expenses increase at faster rate than revenues. Funding operating expenses from the general fund does not increase future revenues nor decrease future expenses. Because It is not surprising the Carrollton Farmers Branch School District Board of Trustees found, it self dealing with larger deficit for 2008-2009 school year than in 2007-2008. By depleting the general fund to address the 2007-2008 deficit, the board did not address the issue of the increasing disparity between the growth of the district's expenses and revenue.
4. By depleting the general fund balance, a Board of Trustees of School district may create future cash flow difficulties, or even insolvency for a school district. The timing and speed in which a district receives cash from revenues is dramatically different from timing and speed in which a district spends cash to cover expenses. Balances in the general fund are used to manage these cash flow differences. As operating budgets continue to grow rapidly, it becomes necessary to districts to maintain larger general fund balances to manage its cash flow needs. In period of time, when school districts find it difficult to balance operating budgets, it becomes all but impossible for a district to increase balance of its general fund. One proposal 2009 state legislative session would have required that a district maintain minimum general fund balances equal to at least two months of the district's operating budget. The Carrollton Farmers Branch ISD operating budget will exceed $220 million dollars for 2009-2010 school year. Based on two month requirement, the district should maintain a general fund balances of about $37 million. For fiscal year ending in August 2008, the district reported general fund balances of $60 million. The Board budgeted a deficit of $13.5 million for 2008-2009 school year to be funded from the general fund. If the budget is accurate, the current general fund balance is approximately $47.5 million; If the district adopts the $220 million budget with a deficit of 8 million dollars, the general fund balance will decrease to approximately 44 million. – barely above the two month balance requirement of $37 million.
As a consequence, the voters will have no choice but to support a tax increase or the district will face insolvency!
Wednesday, August 5, 2009
CFBISD Board of Trustees Funding Operating Deficits by Depleting General Fund is Bad Financial Managment!
Why using the General Fund Balance to fund Ongoing Operations is Simply Bad Financial Management.
In H.B 3, the Texas State Legislature required Texas Education Agency (TEA) to include an alert in the new Financial Solvency Review when a school district has significant reductions in its general fund balance. There several reasons for this:
- By depleting significantly the general fund balance to fund budget deficits, a board of trustees of a school district is avoiding the underlying problem --expenses are growing at faster rate than revenues. For example, the Carrollton Farmers Branch Independent School Board of Trustees approved a budget resolution for the 2007-2008 school year with a deficit of $6 million. And, in 2008-2009, the Board of Trustees approved a deficit of $13.5 million. These deficits were to funded by depleting the general fund balance. Because the underlying budget issues were not addressed, the district faces the prospect of a tax rate increase of almost 9% to fund the budget for 2009-2010 school year .
- By depleting the general fund balance, a Board of Trustees of a School district is increasing future budget deficits. General fund balances are invested and return revenue in the form interest. This interest income stream is lost from future budgets. The depletion of the general fund has the affect on future budgets as if the district borrowed the money, and is paying an interest rate equal to the interest rate the district would have received if funds remained in the general fund. Depleting general funds to cover operating expenses is single one-time fix. However, operating expenses are continuous and tend to increase. Deficits occur when expenses increase at faster rate than revenues. Funding operating expenses from the general fund does not increase future revenues nor decrease future expenses. It is not surprising the Carrollton Farmers Branch School District Board of Trustees found, it self dealing with larger deficit for 2008-2009 school year than in 2007-2008. By depleting the general fund to address the 2007-2008 deficit, the board did not address the issue of the increasing disparity between the growth of the district's expenses and revenue.
- By depleting the general fund balance, a Board of Trustees of School district may create future cash flow difficulties, or even insolvency for a school district. The timing and speed in which a district receives cash from revenues is dramatically different from timing and speed in which a district spends cash to cover expenses. Balances in the general fund are used to manage these cash flow differences. As operating budgets continue to grow rapidly, it becomes necessary to districts to maintain larger general fund balances to manage its cash flow needs. In period of time, when school districts find it difficult to balance operating budgets, it becomes all but impossible for a district to increase balance of its general fund. One proposal 2009 state legislative session would have required that a district maintain minimum general fund balances equal to at least two months of the district's operating budget. The Carrollton Farmers Branch ISD operating budget will exceed $300 million dollars for 2009-2010 school year. Based on two month requirement, the district should maintain a general fund balances of about $50 million. For fiscal year ending in August 2008, the district reported general fund balances of $60 million. The Board budgeted a deficit of $13.5 million for 2008-2009 school year to be funded from the general fund. If the budget is accurate, the current general fund balance is approximately $47.5 million; well below the $50 million level.
Monday, August 3, 2009
Budgeting Changes Needed at CFBISD
The four B’s of school budgeting: baffle, bewilder, befuddle …. Bobby
At its August 13th meeting, the Carrollton Farmers Branch School District Board Trustees will "Consider Revised Time, Place and Location of a Public Meeting to Discuss Budget and Proposed Tax Rate for the 2009-2010 Budget Year." The Board of trustees face the thorny task of approving a budget for the 2009-2010 school year. The district faces a $10 million deficit and must contend with $3 million in state-mandated teacher raises, whose federal funding is uncertain. In June, district superintendent Bobby Burns' staff presented the board with three preliminary budget options, two of which would require a rollback election. In order to pass a balanced budget, trustees were told, the tax rate would have to rise 9 cents to $1.457 per $100 of valuation. The Districts current total tax rate is $1.367 per $100 ( $1.04 per $100 of valuation for management and operations, $ .327 per $100 of valuation for debt service. ) As January 2008, only 123 districts 0f 1028 school districts in Texas had a higher combined tax rate.
What is baffling, bewildering and befuddling, is the board of trustees has all but excluded the public from the budgeting process. Last May, the public clearly expressed its lack confidence in the board by ousting two sitting trustees, including longtime board President John Tepper. This vote was not simply a referendum about the outcome of the Annette Griffin affair , but a clarion call for more open school district governance. Even if the board chooses to forgo a tax increase in favor of substantial budget cuts, the board and the district administration must acquire the buy-in of the public to final budget, if the district is to succeed in these trying times.
What is baffling, bewildering and befuddling, is the budget deficit is a surprise. In August of 2008 the Board of Trustees approved a budget for 2008-2009 school year where expenditures exceeded revenues by almost 13.5 million dollars. (Revenue $284,230,351 Expenditures $297,664,026). The deficit is expected to be funded by depleting the district’s general fund (savings account). In August of 2007 the Board of Trustees approved a budget for 2007-2008 school year where expenditures exceeded revenues by 6 million dollars, the final actual shortfall was 2 million. It baffling, bewildering and befuddling that the Board of Trustees would continue to approve budget resolutions where expenditures grow at faster rate than revenues , compounding the size of yearly deficit. Clearly as early as the spring of 2007, it was apparent that difficult decisions on budget priorties had to be made by the district.
The Board has a choice to make to continue to approve budgets that compound the size of deficits and continue to deplete the general fund balance, or include the community in setting budget priorities, and make the tough budget decisions that are necessary for financial well being of the district. If the board of trustees does approve a tax rate increase, the board will no doubt try to justify the increase as necessary to paid for righteous cause like a well deserve paid increase for teachers. However, any increase in revenues from a tax rate hike cannot be earmarked for a specific purpose. If the board adopts a budget that makes any spending contingent on a tax rate increase, the board is identifying those expenditures as the least important to district, in the opinion of the board. Any tax rate is permanent; there is no assurance that future budgets will reflect the priorities of the community.
It is baffling, bewildering and befuddling, that board would expect the community to surrender more its treasure, without greater input to the budget priorities and transparency.
Successful change begins with acquiring the community’s buy-in to needed budget changes. In the future, the Board of Trustees must increase transparency of, and community participation in the financial decision making of the school district. First, the board needs to create a community based committee to advise the board on budget priorities. This committee should include a broad membership, including parents, community and business leaders, educators and others. Preliminary budgets and options should be posted on the district website, and an provide opportunity for every member of the community to have a voice in setting budget priorities. Everyone agrees that student achievement should be the highest priority of the district. In these trying times, the goal of high student achievent must be accomplished, while maintaining
cost-effective operations. Secondly, the district should post quarterly financial statements and monthly check registers on the district website. Only by the district providing complete financial transparency can the community evaluate the the return on its tax dollars invested to gains in student achievement.
At its August 13th meeting, the Carrollton Farmers Branch School District Board Trustees will "Consider Revised Time, Place and Location of a Public Meeting to Discuss Budget and Proposed Tax Rate for the 2009-2010 Budget Year." The Board of trustees face the thorny task of approving a budget for the 2009-2010 school year. The district faces a $10 million deficit and must contend with $3 million in state-mandated teacher raises, whose federal funding is uncertain. In June, district superintendent Bobby Burns' staff presented the board with three preliminary budget options, two of which would require a rollback election. In order to pass a balanced budget, trustees were told, the tax rate would have to rise 9 cents to $1.457 per $100 of valuation. The Districts current total tax rate is $1.367 per $100 ( $1.04 per $100 of valuation for management and operations, $ .327 per $100 of valuation for debt service. ) As January 2008, only 123 districts 0f 1028 school districts in Texas had a higher combined tax rate.
What is baffling, bewildering and befuddling, is the board of trustees has all but excluded the public from the budgeting process. Last May, the public clearly expressed its lack confidence in the board by ousting two sitting trustees, including longtime board President John Tepper. This vote was not simply a referendum about the outcome of the Annette Griffin affair , but a clarion call for more open school district governance. Even if the board chooses to forgo a tax increase in favor of substantial budget cuts, the board and the district administration must acquire the buy-in of the public to final budget, if the district is to succeed in these trying times.
What is baffling, bewildering and befuddling, is the budget deficit is a surprise. In August of 2008 the Board of Trustees approved a budget for 2008-2009 school year where expenditures exceeded revenues by almost 13.5 million dollars. (Revenue $284,230,351 Expenditures $297,664,026). The deficit is expected to be funded by depleting the district’s general fund (savings account). In August of 2007 the Board of Trustees approved a budget for 2007-2008 school year where expenditures exceeded revenues by 6 million dollars, the final actual shortfall was 2 million. It baffling, bewildering and befuddling that the Board of Trustees would continue to approve budget resolutions where expenditures grow at faster rate than revenues , compounding the size of yearly deficit. Clearly as early as the spring of 2007, it was apparent that difficult decisions on budget priorties had to be made by the district.
The Board has a choice to make to continue to approve budgets that compound the size of deficits and continue to deplete the general fund balance, or include the community in setting budget priorities, and make the tough budget decisions that are necessary for financial well being of the district. If the board of trustees does approve a tax rate increase, the board will no doubt try to justify the increase as necessary to paid for righteous cause like a well deserve paid increase for teachers. However, any increase in revenues from a tax rate hike cannot be earmarked for a specific purpose. If the board adopts a budget that makes any spending contingent on a tax rate increase, the board is identifying those expenditures as the least important to district, in the opinion of the board. Any tax rate is permanent; there is no assurance that future budgets will reflect the priorities of the community.
It is baffling, bewildering and befuddling, that board would expect the community to surrender more its treasure, without greater input to the budget priorities and transparency.
Successful change begins with acquiring the community’s buy-in to needed budget changes. In the future, the Board of Trustees must increase transparency of, and community participation in the financial decision making of the school district. First, the board needs to create a community based committee to advise the board on budget priorities. This committee should include a broad membership, including parents, community and business leaders, educators and others. Preliminary budgets and options should be posted on the district website, and an provide opportunity for every member of the community to have a voice in setting budget priorities. Everyone agrees that student achievement should be the highest priority of the district. In these trying times, the goal of high student achievent must be accomplished, while maintaining
cost-effective operations. Secondly, the district should post quarterly financial statements and monthly check registers on the district website. Only by the district providing complete financial transparency can the community evaluate the the return on its tax dollars invested to gains in student achievement.
Subscribe to:
Posts (Atom)