Freezing Business Services Budget Would Avoid Closings and More

This is a two-parter.
Part 1
In 2006-2007, the Business Services Department of the MMSD spent $111,286,422, according to page 2-118 of the document titled Department & Division Detailed Budget.
In the previous year’s budget process, the board approved spending of $110,245,079, according to page 10 of the Executive Summary, 2006-2007 School Year.
Why did Business Services overspend by $1,041,343? Did the board approve additional spending beyond what was initially approved in the 2006-2007 budget?
Part 2
In the current budget for next year, the superintendent’s proposed budget would INCREASE the amount to $114,239,659. Simply freezing the Business Services budget would reduce spending in the proposed budget by $2,953, 237 ($114,239,659 minus $111,286,422 = $2,953, 237).
The freeze would avoid micro-management by the board. It simply gives the administration a budget figure, and the administration will be free to operate within the budget.
The proposed plans to “consolidate” schools and move alternative programs would save $769,450. [See Discussion Item C-19 of the document titled Superintendent’s Budget Changes (Reductions to Balance the Budget) 2007-08]

6 thoughts on “Freezing Business Services Budget Would Avoid Closings and More”

  1. I’d like to note that on page 2-127 Business Services are listed as having spent $112,245,422 for this current school year. That’s more than $2,000,000 over budget. That cost overrun would have been more than enough to offset the savings that will be realized from the proposed closing of schools, elimination of elementary strings and the cutting of more than 25% of the District’s TAG staff.

  2. Carol Carstensen is the Board’s “Budget Maven,” and she has posted from time to time explaining the finer points of district financing.
    Carol, could you explain the process a department goes through in order to get approval for exceeding their budget? Any additional information you could provide as to why there would be such an overrun in these tight budget times would be much appreciated.
    In advance of your answer, let me thank you for taking the time to respond.

  3. Ed,
    Thanks for sharing this information. When using the business services numbers, make sure you back out the dollars identified as transfer dollars. I would recommend sticking with the dollars in the departments under business services for your comparisons.
    The questions about cost overruns are important to raise. Lawrie Kobza raised similar questions last spring. I believe some steps are being taken in the Finance and Operations Committee (Lawrie Kobza chair) to manage this during the year rather than the end of the fiscal year when the books have to be balanced, which would have to come from the district’s equity fund. Board discussions need to take place before the end of the fiscal year and appropriate decisions made.

  4. Roger Price provided this comment:
    “The amount of $111,286,422 is the Revised Budget for 2006-07 that the Board approved in October.”

  5. Roger Price sent me a link to the Revised Budget approved by the board in October:
    He explained, “Budget 9 is the revised budget adopted by the Board in October. Budget 10 is the managed working budget that best predicts year end and changes monthly. Remember the CFO/COO or District Wide division includes interfund transfers, managed (salary) savings and other DISTRICT-WIDE expenditures.”

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