FY 2017 Budget Schedule

Budget development has begun.  This is a task that is meant to include the community during the entire process.  Your voice can make a difference--the budget is a reflection of the priorities that our community brings to us.  The earlier you become involved, the better.  

How can you participate?

• Attend meetings and budget work sessions (schedule below)
• Watch recorded meetings online or on LCATV
• Follow along with the minutes and budget presentations online
• Call, email, or talk to your board members

This budget year will depend greatly on the result of the unification vote.  Why?  First off, the "hold harmless protection" that has given us phantom students in our student count will expire if we do not unify.  This will lower our student count immediately, causing a corresponding increase in our spending per pupil (which directly affects tax rate).  

A second consideration is the "allowable growth" law put in place earlier this year.  It dictates what our budget change can be based on spending per pupil.  Without unification, early indicators tell us that we may have to absorb a large cut, despite the fact that state law also compels us to provide universal preK to every student.  

Keep tuned in as we work through the new mandates and how each situation could impact budget.

Monday, October 5 - Regular School Board meeting

6:30pm at Westford School, see agenda for topic times

·         FY'15 end of year budget status - A report from our financial officer on the close of the FY'15 budget year and how well we executed to the budgeted amount.

·         FY'17 Budget guidance - A presentation from our financial officer on the anticipated state and local budget starting conditions which will be in place for the FY'17 Westford School budget.  

Monday, November 30 - Regular School Board meeting with budget focus

6:30pm at Westford School, see agenda for topic times

·         FY'17 Budget recommendations - Budget presentation from our administration and financial officer with recommendations for budgeting decisions.  This will take into account known Special Education requirements, staffing, site and maintenance, and technology needs. 

Thursday, December 3 - Budget Worksession #1

6:30pm at Westford School

·         Board discussion with opportunity for community input.  Goals include defining Board broad direction on budget, provide feedback to administration and financial officer on requested budget changes.

Thursday, December 10 - Budget Worksession #2

6:30pm at Westford School

·         Continued board discussion with opportunity for community input.  Review of requested budget changes and their impact and update on any state guidance on tax rate, common level of appraisal, etc. 

Tuesday, December 17 - Budget Worksession #3

6:30pm at Westford School

·         Final review of proposed FY'17 budget with opportunity for community input.  Prepare budget numbers, vote warning, and presentation materials in advance of the Joint Meeting

Wednesday, January 6 - Joint Meeting with Select Board

7:00pm at Westford School

·         Presentation of the proposed FY'17 budget.  Final proposed budget accepted by Board for public warning in anticipation of vote at Town Meeting Day

Monday, February 29 - Budget Informational Meeting

7:00pm at Westford School

·         Town Meeting review of proposed FY'17 budget

Tuesday, March 1 - Budget vote

7:00am to 7:00pm at Westford School

Up to date meeting agendas, minutes, and materials can be found on http://www.ccsuvt.org/westford at the "School Board" quick link

The public is invited and encouraged to attend.

Unification Q&A archive

We are receiving many unification questions from Westford citizens, with the expectation that there will be more.  In order to keep the Q&A organized, archived, and readable, a new page has been added to the blog and will be updated with new questions and answers as they come in.  Click on the tab titled "Unification Frequently Asked Questions" to view.

This is meant as a supplement to the FAQ and collected Q&A from the community forums available on the RED Study Committee website.  Please visit the official study website for a comprehensive look at all of the study resources.  

FY16 final tax bill numbers

Westford town property tax bills are broken out into two components:  education tax and municipal tax.  The school budget only affects the education tax portion of your bill.

The budget numbers are known when we go to the voting booth, but the resulting tax rates are not, as tax rates are not set until after Town Meeting Day budget votes.  We provide estimated tax rates during budget development that are based on conservative recommendations from the state.  Using conservative estimates often shows the worst case, which doesn't always come to pass.  This year was no exception, as estimated rates fluctuated dramatically during the legislative session.  It does illustrate how using early tax rate estimates may not be the best way of determining the quality of a proposed budget.

The state recommendations were changed after Town Meeting, as most school budgets came in lower than expected and the House passed a lower base rate.  This number was used for the reconsideration vote materials.  The final base rate numbers changed once more when the Senate proposed and passed its education bill amendments.

So...where does that leave us?  Below is a summary of changes:

Homestead tax rates landed in the middle of the two projected numbers, but the legislature backed off completely on increasing the Income Sensitivity rate.

After accounting for our district spending adjustment and Common Level of Appraisal, the actual rates Westford residents pay is below:

Actual Westford rates are $1.5266 for Homestead and 2.82% for Income Sensitivity.

Homestead tax rates ended halfway between our estimated numbers (increasing 3.95%), but the Income Sensitivity rate dropped drastically (from a 9.35% increase to a 1.44% increase).

The full state-provided tax rate calculation sheet for Westford (and all other towns) is available at http://www.state.vt.us/tax/pvredtaxrates.shtml.

The best way to understand how your education tax rate has changed is to compare the new bill to previous years.  Depending on your income, assessed home value, and type/amount of land, you may be paying different rates for different parts of property you own.  Most people pay at least a portion of their taxes based on the Income Sensitivity rate.  The above chart is a good overview of what to expect, but each situation will be different.

Special Education spending report

The state has just released its roll-up of school district spending for high cost disability and out of district placements.

Westford has been identified as a "Low Spending District", with costs at 26% below the state average.

The full report is available here.

Staff numbers and roles

A school is a personnel intensive enterprise.  Most of our budget is invested in the people who teach and support our students.  Properly staffing the school both in number and expertise is critical to our success.  Equally important is training and retaining that talent.

Our school practices several methods to keep our workforce as flexible as possible to student need.  Hiring staff members with multiple certifications allows us to utilize a single employee to fulfill several part time roles.  This allows for more skilled and responsive student services, while also helping to attract and retain individuals looking for more than part time employment.

Another practice is to split responsibilities into the appropriate job descriptions.  In general, the cost of a certified staff member is higher than that of a support staff member.  It is important to make the most of that investment.  We handle several duties in this way in order to realize a lower total overhead cost and keep our professionals focused on students rather than paperwork.

Finally, we are cautious to watch trends and make data-driven decisions when it comes to hourly staffing costs (maintenance/custodial/office administration).  If certain work functions result in overtime hours, we weigh the trade-offs between absorbing the overtime versus contracting the work out or making future staffing adjustments.  In all cases, we look at the total impact to our budget prior to making a decision.

The only reason that the above concepts work is that we have a dedicated and highly skilled staff.  It is not uncommon to see people do whatever it takes to get the job done.

How many people do we employ, and what are their roles?  

Below is a chart of all anticipated staffing for FY16.

All positions and their FTE (full time equivalent) are audited and compared versus anticipated student need, Vermont State Education Quality Standards, and our own School Action Plan.  Positions are added or removed in direct response to these metrics.

In a preK-8 school house, employees must have the training to apply developmentally appropriate response to each situation.  Students can range in age from 3 to 14.

Many positions are part time, which can present staffing challenges as those roles tend to turnover more quickly.

Certified staff is unionized, our support staff is not.

In total, we are budgeting for a total of 31.45 full time equivalent positions for the upcoming school year.

Comparative tax rates

At town meeting, I presented a chart showing the projected FY16 homestead tax rates for all towns in Chittenden County.  This information was taken from the Agency of Education's spreadsheet, and represents the actual amount that would show up on a town's tax bill (it includes the projected adjustment for CLA).

Some have been surprised to see that we were 14th out of 19.  The majority of our neighboring districts have made budgetary decisions that result in a higher homestead tax rate than Westford has.  

This chart doesn't speak to educational opportunities in each of these districts.  Some tax rates are driven by declining enrollment--others may be from increased budget devoted to student programs, lower revenues, etc.  In many ways, the above towns are competing to attract residents and potential students.  Tax rate can be one consideration, but educational quality is surely another.  Striking a balance between the two is key.  

A public school transitioned to an independent school model is currently being used by two districts in Vermont (Winhall and North Bennington ID).  I have been asked what the resulting tax rates for both of those towns are.  Below are the official tax grid calculations provided by the State of Vermont to voters of those districts for Town Meeting Day.  

Proposed tax rates were $1.7463 for Winhall and $1.7547 for North Bennington ID.  These districts account for the two highest tax rates in Bennington County.  Like Westford, these rates are for the education of all K-12 students within the town, not just the elementary school students.  I cannot speak to the budget details of either of these districts, but the tax information gives us one data point to make some relative comparisons.  

What would it take?

The following charts were presented at a recent meeting.

Education property tax is largely defined by total spending divided by number of pupils.

For the school, we can address the problem in several ways:

1)  Decrease the budget (short term solution)

2)  Increase the number of students (long term solution)

Spending cuts required to reach given estimated property tax changes

It is arguable that we cannot continue to cut our way to lower taxes.  We have reached diminishing returns as classes are full and staffing is reaching the minimum required to comply with student need and Vermont State Education Quality Standards.  Another drop in pupils next year will see the process repeat itself. 

 

Increase in student enrollment ("equalized pupils" in Vermont tax terms) to reach given estimated property tax changes

Stopping the drop in pupils has a much greater effect on tax rates.  The school has the capacity to accept more students without change in staffing.  As a town, have we been encouraging the type of growth, housing, and services that are required to attract families with young children? 

It may be unrealistic to believe that we can make changes to attract enough students in the short term to make a difference for tax rates.  It must, however, be integrated into Westford's long term development plans.

This analysis forms the basis for our board's decision to enter into a unification study with Essex Junction and Essex Town.  The larger pool of students could absorb our student decreases, and the property tax incentives for residents are an option that could not be ignored.  It presents a potential course to ride out the final years of decreasing enrollment before we start to see student population growth again.  The board is approaching the study without a predetermined outcome--the burden is on the data to prove out the findings. 

What are our options?

Our education property tax really comes down to one main thing:  Take how much we spend, then divide it by how many students use it.

If we don't like the number that comes from that equation, we have two choices:  1)  reduce how much we spend or 2) get more students to use it.

This doesn't make logical sense when compared to a household budget.  You decrease cost by reducing what you spend.  Adding an additional person to your home doesn't make it less expensive to run the house.  In this case, total cost matters.  I don't know of many folks who have extra children to lower their "cost per person" at home.

That is how it works for schools, though.  Total budget doesn't matter as much as how many students it serves.  For Westford, we have the extra capacity to accept more students with the same amount of staffing.  That 7th grade classroom with 19 students taught by one teacher could accept up to 6 more kids.  More importantly, since the total we spent didn't change, it gets divided by a higher number of students.  The end result is we lower our spending per student.  *This will lower your education property tax rate*.

Not only will more students lower the rate, but it does so surprisingly fast.

Westford is in the opposite situation.  We have been losing students every year (mostly high schoolers graduating).  So, for the same or even lower total spending, it gets divided by a lower number of students.  We see higher spending per student, and education property taxes go up.

What about that first option of lowering spending?  We have made tough choices year after year to tighten the budget, mostly through reducing our staffing.  But we are coming to the point that further cuts are going to hinder our ability to meet the Vermont Education Quality Standards and, more importantly, the quality that is going to attract and retain families in Westford.

It takes a large reduction in spending to overcome even a small drop in students.

If that classroom with 19 students and one teacher drops to 18 students...we're still going to need one teacher.  We've reached the point where further reductions to teaching staff don't track one for one with enrollment.

To put real numbers to it, we could see zero change in homestead property tax this year if...
1)  We lower the budget by $278,000 (-5.6%)
OR
2)  We have just three more students in the school system than last year (+1%)

This is a bit of a simplification, as there are other factors involved in determining tax rates (base tax rate, revenues, CLA).  However, our spending per pupil number accounts for 44% of the tax increase this year.

Phantom students and "hold harmless"

Vermont uses the metric of "education spending per equalized pupil" to determine how a district's budget will affect the local property tax rate.

Like much of the education funding formula, this sounds easy to understand until you dig into it.  The number of pupils is just the number of students (preK through 12) in our town, right?  Nope!

In the FY'15 school year (2014-2015), we have a total of 295 students (15 preK, 169 K-8, 111 9-12).  This is the real number of students who are enrolled.

Yet, if one looks at the state data for number of "equalized students" in the Westford district, you see the number is 318.52.  Why is this number different (~7.8% higher)?  What does a fractional student look like?

This phenomenon has come to be known as "phantom students".  There are several factors in the state's formula that bring this about.

1. Student weighting
2. Two year averaging
3. Hold harmless provision

Student weighting

The state has made the assertion that education costs are expected to be different for certain student groups.  For example, it is assumed that students in PreK are less costly to educate than students in grades K through 6, and that secondary students (grades 7 through 12) are more costly. Weighting is also higher for ELL (English Language Learners), FRL (Free and Reduced Lunch) students, etc.  

Based on your mix of students and economic conditions, this will change your "equalized pupil" number.  Westford has relatively low numbers for ELL and FRL, and a shrinking number of secondary students. 

Two year averaging

Averaging pupil counts over two years helps smooth out random spikes and dips in student population.  This allows for reacting to trends rather than one-time events.  

Hold harmless provision

Schools that are experiencing large, sudden changes in student population are limited in the percentage of student loss in a single year.  That limit is currently a decrease of 3.5% of their prior year equalized pupil count.  For example, if a district 's two-year average were to drop 5% of students in a single year, their "equalized student" number would only decrease by 3.5% in the first year, then, assuming the student number remains unchanged, the second year will see a decrease of an additional 1.5%.  

By dampening the effect of large change, this gives a district time to adjust staffing to react to enrollment changes.  It also helps town taxpayers by spreading out the tax impact over two years.  

However, this mechanism wasn't really designed to deal with the type of declining enrollment our state has seen.  Extended enrollment decline of greater than 3.5% has a cumulative effect that may lead to a district falling under hold harmless protection even after enrollment has stabilized for several years.  

As student populations have decreased, especially in districts where one or two families leaving the system can cause a significant percentage change, we see cases of always hitting the hold harmless limit.  

Westford has hit the limit for the past several years.  We expect to remain in that place for several more years.  Large scale migration effects like the closure of the trailer park take many years to overcome.  Similarly, our graduating high school classes (the last of the baby boomer generation's children) are larger than our incoming classes.  

At 295 students preK-12, 3.5% is roughly 9 students.  

All districts in the state play by these rules, Westford is no different.  In our budget presentations, you will find our real student numbers and the equalized pupil count.  

How we use them:

• Equalized pupil numbers (aka "Phantom students") are used for all statutory calculations, such as spending per equalized pupil, local tax rate, etc.  The state requires this.
• Actual student numbers are used for all staffing decisions, expected case load, busing contracts, high school tuition, materials purchases, etc.  We budget based on real students.  

FY16 budget synopsis

Our complete budget process, minutes, and documentation are easily available online at our Westford School Board page.  This will always be the source of official meeting agendas, minutes, documents, web streams, etc.  This blog is an additional means of diving deeper into the data and methods used for school board decision making.

Our Joint Meeting budget presentation is on Wednesday, January 7 (7:00 at the school common area).

For those not able to attend, a quick synopsis of our FY16 proposed budget:

• Proposed budget change:  -1.3%  (-$67,000)
• Projected homestead tax rate change:  +4.9% ($72 per $100k of assessed value)
• Projected income sensitivity tax rate change:  +9.35% ($26 per $10k of income)

Budget and Tax History

Yearly budgets are usually presented in relation to the previous year.  While the rate of change can be volatile year to year, overall longer trends can give a better picture of what a budget is really doing.

For example, big changes in a given line item from a previous year can get shadowed by a small change in the current year.  Looking at a multi-year history of that line item would tell a more complete story.

We like to include our budget and tax history in all budget conversations to be as transparent as possible.  The trends are clearly visible.  Below is our history, including the proposed budget and projected tax rates.  Tax rates for FY'16 are based on actual data for all variables except base tax rate (estimated to be +2 cents by the state) and the base education amount.  Those values will be available in the spring.  

Year over year, the budget change has averaged -0.33% for each of the last six years.  

Increases to the tax rates during recent years are directly attributed to our decreasing student population and the higher state base tax rates.  Local tax burden is determined not by our total spending, but instead our total spending per pupil.  As pupils decrease, spending per pupil for the remaining students increases.  

As the last of the baby boomer's children are graduating high school, we're seeing outgoing classes that are larger than incoming classes.  That has turned into a drop of -3.5% per year in students for us, driven by high school graduation.  Incoming elementary classes are stable or growing slightly.  

Based on population and birth rate predictions, we have several more years of decreasing preK-12 enrollment to prepare for.  

Proposed FY'16 staffing

A quick look at our budget will show you that preK-8 salary and benefits consume 50% of our total budget.  A further 30% goes to high school tuition.  How did the board approach staffing at our school for this upcoming budget?  Are we doing our job to be responsible to the taxpayers in Westford?

The Vermont State Education Quality Standards form the basis of our decision making around staffing.  Do we comply with the state standards in how we staff our school?  The words "must and "shall" show up often in relationship to staffing, leadership, curriculum, services, and more.  Guidelines are provided for the appropriate ratios of students to the staffing for particular services.

All staffing at Westford School complies with the Vermont State Education Quality Standards.  Each year, an audit of each position is performed to determine the following:

• Does the staffing of each position support projected student need for the coming year?
• Does the staffing of each position match the anticipated workload for the coming year?
• Is the staffing of each position appropriate to the Education Quality Standard recommendations for student to staffing ratios?
• Does the staffing support our School Action Plan?

Student need can change drastically as students move in and out of our system.  We attempt to be proactive in staffing to react to those changes.  School Action Plans and Education Quality Standards move less quickly, so changes can be more strategic.

The history of our total staffing (Full Time Equivalent positions, or FTE) is shown below.

Some observations of our staffing:

• Licensed staff change from FY11 to FY16 = -13.7%
• Support staff change from FY11 to FY16 = +4%
• Total staff change from FY11 to FY16 = -7.4%

The downward trend in staffing tracks with our decrease in students.  Support staff positions are traditionally less costly than licensed staff, so shifting appropriate workloads to staff positions can result in cost savings. 

What does the FY16 student to staffing comparison look like?

*Teachers include all instructional educators (classroom teachers, special educators, reading specialist, math specialist)

**Staff includes all employees (licensed teachers, librarian, nurse, counselors, SLP, ETIS, IT, custodial, maintenance, clerical, paras, etc.)

Westford School is well above the state average in all three metrics.  We could handle more students within our current classrooms, so these numbers could get better with the same staffing if student populations increase.  

Recently, the Secretary of Education presented to all state school boards that if they were to increase the state average student to staff ratio of 4.67 to 5.0, it would result in annual savings of $74 million dollars to state taxpayers.  That equates to about 7 cents on the tax rate!  Westford has exceeded that challenge by an additional 10%.  

Data driven comparisons

Each year, the Department of Education publishes detailed reports on all schools in Vermont.  A great deal of data is contained within, and these are useful tools to help compare our school district to others to see how we are doing on important metrics.

Visit http://education.vermont.gov/data for a full list of reports.

So how did we do compared to the averages and other area schools?  Let's look at two of the most asked about topics during budget time; staffing and taxes.  (All data presented is pulled directly from the above website.)

The metric that has the largest potential impact to our budget is the student to teacher ratio.  Right-sized staffing is critical to keeping the ratio both constant and appropriate.  The average student to teacher ratio in Vermont is 9.9.  The chart below shows Westford within the cohort of schools with greater than 200 students.  Believe it or not, Westford is not considered a small school in Vermont!

Westford's student to teacher ratio is 11.88, which is the highest ratio for K-8 schools with 200 to 400 students.  This is achieved with one classroom teacher per grade level.  Note that all the schools with a higher ratio have at least two times the students we have, thus more flexibility in how to deploy teachers and classroom configurations.  The FY'14 student to teacher ratio was calculated to be 12.1.

How this ultimately affects our town is through budgeting and the resulting tax rate.  Below is a chart sorted by Actual Homestead Tax Rates for all the towns in our general area.

Westford's actual tax rate compares favorably to other towns in the area.  These rates are adjusted by the Common Level of Appraisal, so they provide a fairly equalized look at how town to town property taxes stack up against each other.

Data for FY'14 and FY'15 has been compiled manually from the Department of Taxes,  http://www.state.vt.us/tax/pvredtaxrates.shtml and is included below.  Our continued loss of equalized pupils is evident as the spending per pupil number grows.