5-Year Capital Maintenance Plan 

By Alex Saitta 

May 24, 2016 

 

Introduction: 

Looking at the $33 million 5-year capital maintenance plan the school board passed in a 4 to 2 vote, it includes $27 million for maintenance of existing buildings with things like roof and HVAC replacements, repainting and repaving schedules and things like technology refreshes.  

However, it also includes $6 million is new demolition, renovations and construction/ additions. This is one of the main reasons I voted against the plan. The school district just did a generation of demolition, renovations and additions and it should not be doing any more right now. The focus should be on maintaining existing buildings and securing the funding for that.  

 

Alternative: 

If that was the focus this would be manageable, without closing schools, and only about $5 million a year.  

 

There is $3.5 million of revenue flowing into the capital maintenance account and it is growing $250,000 a year.  

 

General fund revenue is growing $5.2 million this year (the highest rate in 10 years). Some of that money can be used to bridge the gap. The existing general fund budget is more than $110 million. The administration should identify low priorities, excess and waste, reduce or eliminate some of that and then shift those savings to capital maintenance. To keep things neat and tidy I’d rather not do that, but sometimes you have to shift money from one account to another. For instance for five or six years the district subsidized the general fund account with the special revenue account.  

 

The TIF money is about $600,000 a year now, and will grow to $1.3 million. That money should be earmarked for capital maintenance.  

 

Some buildings could still be sold as well to help plug the gap, but that effort has all but stopped.  

 

Budget Management? 

Where is the management of existing resources I just described to bridge this funding gap? It simply is not occurring. Creating longer and longer list of new spending is not budget management. Revenue growing like this, spending way up there, and then praying for continued revenue growth to make it all right is not budget management. Blaming past boards or pressing the legislature for even more money is not budget management.  

 

In sum, the board should instill a budget process with basic budget principles:   

1) A budget is a fiscal tool to control spending. One way to do that set a fixed budget amount and keep to it. That was totally absent with the school district. The general fund budget starts at the first reading here, and grows 2^nd reading, 3^rd reading and grows more with each amendment during the fiscal year. Ditto for the capital maintenance plan. For 2016-17: $7.3, $5.4, $3.25, $5.8, $6.1, $6.2, $5.5 and finally $5.2 million. We spent $4.6 million last year, job one should have been to set a budget equal to $5 million and work from there.   

2) Are all the things in the capital maintenance plan needs? Or wants and needs? Start with the capital maintenance account and  call repair and replacements needs and demolistion, renovations or new construction like more sports bathrooms, call them wants.    

3) Once you have needs, then rank those needs from most important to least important.    

4) What other funding sources beit sell property, TIF money (a windfall that could have easily been shifted to the capital account), and take a piece of new general fund revenue. 

5) Then look at existing general fund spending and create a list of low priorities, excess or waste to be cut and reallocate that money to capital needs.  

6) Then consider spending some savings. 

7) Finally, consider a tax increase. 

 

Conclusion: 

Most of this wasn’t done. In the end, the leadership took a manageable situation and has turned it into an unmanageable one because they've expanded the scope of capital maintenance budget, spent most of the district’s savings and they don’t manage the budget. Now that they are staring at deficits, and they are asking what do we do now? 

 

Overall their solution has been to spend savings, cut 65 classroom teaching positions, closed two schools and are raising taxes 1.5 mills.  

 

 

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