ConVal revenue projections incorrect
PETERBOROUGH — With voters set to go to the polls next week to vote on a $45.5 million operating budget, ConVal School Board members learned Tuesday that the district’s building aid revenue projections had been miscalculated and the district might get as much as $600,000 less than expected.
Business Administrator Marian Alese said she had mistakenly included a reimbursement from the state that had already been paid to the district when she prepared the revenue projects that appear in the district’s annual report.
“I take responsibility for this. I apologize,” Alese told the board.
School Superintendent Dick Bergeron told the board that the shortfall should not mean an increase in the district assessment.
“We’ll start working to develop a plan so this will not impact the taxpayers,” Bergeron said.
Building aid revenue, which is state reimbursement of 55 cents on the dollar for money that has already been spent on qualified projects, comes in over a number of years as projects are completed and expenses documented. It makes up part of the overall revenue amount that is subtracted from the approved gross budget in order to determine the district assessment — the amount that must be raised by taxation.
The list of estimated revenues prepared by Alese for the annual report shows $1,258,409 in building aid, which is part of an overall estimated revenue amount of $12,687,324.
On Wednesday, Alese said she had contacted the state to get preliminary building aid schedules in November and December of 2012. The payments were reimbursements on projects under a plan that was first submitted to the state in 2009. Alese said she didn’t receive notice of any discrepancy in her numbers until Feb. 13, a week after the district’s Deliberative Session where the proposed 2013-2014 budget was discussed.
She met with state officials on Feb. 19 and discovered two problems.
First, Alese had included a payment of about $307,000 in her revenue projection for 2013-2014 that had already been received by the district.
“I was anticipating a payment on old debt service that had already been made,” Alese said in a phone conversation. “I was a year behind on my schedules. That was my mistake.”
The rest of the possible $600,000 shortfall is due to the state not making adjustments in planned payments for new projects, including the ConVal gymnasium renovation. At the board meeting, Alese said documentation related to those projects had not been taken into consideration by the state.
“At this point, I’m going back to square one to see if we can adjust the reimbursements,” she said. If she is successful, the lost revenue amount could be less than $600,000.
According to Bergeron and Alese, the district has options that should enable them to cover the shortfall without having to increase taxation. The district generally has an unreserved fund balance at the end of the fiscal year, and some of that money could be used.
“We started an analysis this morning,” Bergeron said on Wednesday. “We feel very confident we can cover the deficit.”
He said the first option would be to see how much carryover might be available from fiscal year 2012, when some line items came in lower than expected. The next step could be to transfer funds from the current fiscal year 2013 budget. He said health insurance costs, which are always budgeted for a guaranteed maximum rate, will be coming in at less than budget and the district has received more than was expected in catastrophic aid this year.
A third option would be to take money from the district’s Special Education Trust Fund or the Building Capital Reserve Fund. According to Alese, the special education fund now contains about $336,000 and the building fund has $259,000. Bergeron said taking significant money from those funds would be a last resort and should not be necessary.
“We’re pretty committed not to draining the trust funds,” Bergeron said.
He said a proposal for how to adjust to the shortfall should be available for School Board review soon.
On Wednesday, former School Board member Gail Cromwell was critical of the district’s budgeting process.
“This is quite a substantial error,” Cromwell said about the revenue miscalculation. “There should be no reason to get that wrong.”
In an email to the Ledger-Transcript, Cromwell wrote, “It is incredible that less than a week before the voting on March 12 the school board discovers a miscalculation in building aid with the result that taxpayers will be asked to pay an additional $600,000.... Voters can compensate by voting for the default budget, which is $600,000 less than the gross budget of $45 million.”
Bergeron disagreed with that analysis. He said voting down the budget would mean elimination of new programs like full-day kindergarten, an additional preschool program at Peterborough Elementary School and a middle school emotional support program, as well funding for an additional elementary school nurse and additional elementary health teacher.
“We can provide a solution to this that doesn’t affect programs and doesn’t affect students,” Bergeron said. “To suggest that voting down the budget is the best way address this makes no sense to me.”