The (not?) Missing $2 Million
Thursday, March 13, 2008
Distracted by the details of the 108 budget cuts, we forgot to ask about the $2 million Director of Business Services Linda Quinley said could be found .
School Board Vice President Darin Preis asked about that $2 million after Superintendent Phyllis Chase finished reading the administration's list of cuts at Monday's board meeting. Chase's and Quinley's answer was that the $2 million was made up of many of the first 54 line items proposed for cuts.
Previously, the district had used "incremental accounting" to budget money for the district's many departments. Using that method, the administrators chose a specific percent, say three, that they thought costs would increase by. For example, gas and paper prices might increase each year.
Administrators then gave departments their previous budget plus the increase for the next year.
These 54 cuts are specific. The district is not asking department heads to budget for what they need. Instead, the district found and has proposed those cuts for them.
Those savings are not one-time savings, because the excess, which Quinley said was about $2 million, ends up in the district's reserves every year. However, with the cuts, there will be a much smaller amount deposited into the district's reserves each year, lowering the reserve percentage, especially if the district's budget grows (as it does each year).
Eventually, they'll have to make up the savings, if they want to keep reserves at 16 percent of expenses. So, long-term, the savings are not sustainable — the district will have to find more money to set aside for a rainy day.