The Orlando Sentinel published an article by Reporter Erica Rodriquez on how the Lake County School District and their CFO set aside $3-million due to a teacher union lawsuit over Governor Scott's request that teachers contribute 3% of their wages directly to the Florida State pension fund, rather than the prior practice of having the employer (School District) pay for the pension contribution without deductions from wages.
Read the story, and the other comments, then my comments below (which are longer than allowed by the Sentinel on their site:
http://www.orlandosentinel.com/news/local/lake/os-lk-schools-money-unspent-20111030,0,6229510.story
Here is my comment about the issue, with some extra issues about BAD budget practices thrown in for good measure:
The Lake Schools CFO, Carol MacLeod, has done a good job of keeping this specific School District budget item on a conservative track, but other bad budget practices exist as described below. This is one of those issues where it would have been easy to blow the $3-million like the Lake County Board did, but set it aside. The teacher's unions shot their foot off when they sued about the pensions, and MacLeod and the Board did the wise thing and set the funds aside.
But, not all budget procedures are businesslike. Watch for the unions to try and grab more salary and benefit increases, time off, etc. BEFORE the School Board starts serious budget reviews for next year. This is why they are always short at the end of the budget year because the unions and department heads go early to the Board, complain about something THAT FOR SOME STRANGE REASON IS NOT IN THE CURRENT BUDGET, and get the Board to make an emotional decision to lock up spending before budget shortfalls or economic indicators are known.
Then, magically, it seems the only way out is to hike taxes or defer maintenance again due to BAD BUDGET methods used by the Administration and approved by the Board. If the Board was serious about fiscal conservatism, they would not approve all the interim budget requests, and ask why the Administration didn't have a reserve for them in the previously approved budget. Business leaders who would try this in corporations would be fired for gaming the budget system, but it never happens to government "leaders".
For instance, watch how every year there are leaking roofs or failing air conditioning units, which to me indicates BAD maintenance budgeting and District mis-management, but no, the Board will cave and spend money like drunken sailors to appease emotional pleas, then wonder why their next year's budget has to be cut again or new taxes proposed. We have to stop electing Board members who fail to understand this constant game and play along with it.
My recommendation to the Board or Administration staff that want to keep their jobs is to start asking these two questions and resulting action recommendation about every spending request that is not in the existing approved budget:
1. Why isn't there a standard operating reserve for these types of things built into the annual approved budgets.
2. Since many staff have been at the District for 20 years, they should know the average true budget needed, and why wasn't this new request included in an existing budget line item.
3. What budget account can the funds be transferred from to cover the requested expense, rather than spend down existing cash reserves?
Recommendation: Finally, if the request is not taken from an prior budget line item or operating reserve fund, it should be REJECTED until it can be included in the next budget process for consideration compared to all other priorities.
By the way, former School District Board member Larry Metz used to ask those questions, and halt some of the interim spending requests from staff by asking why it wasn't covered in the recently approved budgets. Unfortunately, he left, but is now our State Rep.
vj
