Thanks to the reader who reached out to a school board member and forwarded to me an update on the status of the 2009-2010 School Budget. The preliminary version was approved by the board and it is posted online (school web site, under Administration, Finance, Budget Documents).
Tax Increase
The good news is that the millage rate is only going up 1.31 or a 2.96% increase compared to 3.92 or a 9.72% increase last year.
Summary
Total expenses in this year's budget are $64,000,484, a two year increase of $8,142,987 or nearly 15%. Revenues are the same for a perfectly balanced budget.
It was anticipated earlier that the district would have to have nearly 10% tax increases for the next several years and this year's roughly 3% is much lower than that.
Fortunately, the NASD was able to 'save' $2M this year by making a fund balance transfer of $500,000 and our debt service decreased by $1,476,292.
Debt Service
The single largest item expense in the budget is our debt service. This year it decreased from nearly $10M to $8.37M.
Projections I received in 2007 indicated total payments in 07-08 of $8.5M and actual was $8.0M, 08-09 of $10.1M with an actual of $9.9M, and 09-10 of $10.8M with an actual proposed of $8.4M.
This seems a bit odd, even if we refinanced our debt, the amounts we needed to borrow to build the new MS were projected to increase our debt from $8.5 to $12.4M from 2007 through 2012, and to be at $8.4M halfway through is quite remarkable.
More to come...obviously there is quite a bit in these 44 pages of budget material so I'll have some more in future posts.
1 comment:
Thanks to school board and finance committee member Tom Maher who explained in general terms how the debt was lower than forecasted:
The net impact of the new borrowing & restructuring of existing debt was to smooth out the impact of new debt plus other increases in spending for the new facilities. Otherwise, tax increases would likely be higher.
Without looking in detail at the forecast, there are several variables that were changed from the original financing plan:
1) timing of borrowing (new or refinanced debt) NASD deferred the final borrowing of $30M quite a bit due to the current credit crisis. We borrowed $15M late last year. Remaining $15M will be soon, We are meeting on it Tuesday
2) lower interest rates Small impact here but what there is often gets front loaded with new payment structure
3) longer term...new debt is nominal 25 yrs vs previous 15 and 20 yr terms
...plus old debt with 15 yr term was refinanced with new...25 yr debt on a new building is very reasonable
4) repayment structure common practice is to level new debt with old debt with the effect of by leveling annual debt service
5) impact of swaps here we have seen higher costs the past year offsetting a
small part of the first four items
The net impact of the new borrowing & restructuring of existing debt was to smooth out the impact of new debt plus other increases in spending for the new facilities.
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