Thursday, February 12, 2015

Crumb Ultimatum

Dr. Bob Barth addresses the school board
In a public comment at last night's school board meeting (video), Dr. Bob Barth advocated for an alternative fill for the artificial turf field.  Typically artificial turf fields are filled with crumb rubber made out of ground tires, which makes the playing surface spongy, reducing injuries. As tires are known to contain many carcinogens, as well as many unknown proprietary ingredients, Dr. Barth said he could support the field only if "crumb rubber was off the table."   The district votes on Election Day, Tuesday March 10th, with Article 3 needing a 60% YES supermajority for the $2M field project to go forward.

Dr. Barth's wife, board member and former chairman Maria Barth, echoed the ultimatum when she spoke at the board table.  This caused a sharp reaction from a few other board members, who pointed out the plan and budget had been public for a while, widely presented and already approved by the voters at Deliberative Session.  They worried about a repeat of the Moharimet Cafeteria project, which grew in scope and cost after the warrant article was approved.  They further asserted that while they were willing to explore other fills, it would be imprudent to take crumb rubber out of the running before we're sure there's a viable alternative.

Dr. Barth countered in a later comment that the presentations never stated the fill would be tire crumb.   Rather than summarize Dr. Barth's comments, here they are in their entirety.  I welcome opposing views.

As a retired diagnostic radiologist, also Board certified in radiation therapy, I rise to raise concerns over health issues with respect to crumb rubber in artificial turf. I am a strong supporter of a track and of field improvements, but cannot support an artificial field utilizing crumb rubber.

Considering how long the issue has been under consideration I am concerned that the Sustainability Committee has not, thus far, been involved in the process. I thought the public approved the Sustainability Committee precisely to have input on this type of project.

I am concerned by advice not to quibble over scientific studies, but to visit the web site for the scientific evidence for the safety of artificial turf. The school is a .org not a .com isn’t it? Therefore, not to my surprise, under Environmental Impact are 5 sections all extolling the safety and virtues of artificial turf and most specifically of tire crumb as though it is a forgone conclusion it is our material of choice. There are 70 referenced articles and the entire site is brought to us by the Synthetic Turf Council the mouthpiece for the industry selling this stuff to us. It’s like asking the tobacco industry in the 1970s if smoking causes lung cancer. Of course it doesn’t. The web site is a blatantly biased commercial, not a balanced source of information for the public. Numerous health experts and scientific papers raise deep concerns.

Here is the
definitive article referred by Kevin Gardner’s letter now on the website. Have any of you actually read it? Far from extolling the safety of tire crumb, its longest section calls for the necessity of further research. But why do we need further research if it’s already proven safe? Because, as the article points out many of the studies sited are “limited in quality and number and more are required.” Some of the studies considered were admittedly generated by those with financial interest, i.e., the industry. One section speaks of the possibility of zinc contamination of one million cubic meters of water to the EPA’s maximum for the protection of aquatic life. There are 1.2 tons of zinc in the average crumb rubber soccer field. A final quote from the article: “The human health and environmental risk of artificial turf can be eliminated or reduced by substituting the tire rubber crumb with alternative infill materials containing less hazardous materials.” How’s that for a ringing endorsement for the safety of tire crumb! I’ll leave the article with you as it has an informational table of alternatives to crumb rubber.

Oft referred to as showing the safety of tire crumb this tome from the NYC Department of Public Health is similar and raises more safety questions than it answers. It lists over one hundred chemicals of concern in tire crumb. I looked up about half of them and 18 were listed as carcinogenic to humans or probably so by the EPA. Even if all are individually at relatively low levels what is their cumulative effect over time? Carcinoma of the esophagus is almost always associated with smoking and drinking, not smoking or drinking. There is a definite synergy between the two. Most carcinogens have a long latent period between exposure and malignancy in terms of 5 to 30 years, not months.

How about an admittedly unscientific survey of 38 soccer players with crumb rubber home fields who developed cancers, mostly lymphomas. 34 of them were goal-tenders who frequently dive face-first into the ground creating a cloud of material immediately inhaled and ingested, probably taking in more volume and weight of toxic materials by a factor of a 1000 than players breathing 4 to 5 feet above ground where testing is usually performed. Nothing proven scientifically, but the expected ratio would be around 34 to 300 not 34 to 4. Astronomical odds against simple coincidence. I know of no scientific studies addressing the issue.

So now we’re considering using pulverized tires which contain several known carcinogens and up to 200 proprietary chemicals the industry will not even identify and we cannot possibly evaluate, all adding up to a low-level toxic waste site we want our students to play on.

Sweden has recently banned further crumb rubber pitches and the EPA no longer proclaims their safety.

New York City and Los Angeles school districts reject crumb rubber in artificial turf illustrating use of the precautionary principle which states: when an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically. In this context the proponent of an activity, rather than the public, should bear the burden of proof. The process of applying the precautionary principle must be open, informed and democratic, and must include potentially affected parties. It must also involve an examination of the full range of alternatives including no action.

At this point I would respectfully request the School Board to at least:
  1. consider alternatives and exclude tire crumb from consideration in a turf field (I will not vote for this measure if tire crumb remains an option, but will support it if crumb rubber is excluded from consideration),
  2. fully involve the Sustainability Committee in their advisory capacity, and
  3. remove all industry-generated, sales-pitch propaganda from any OR web site.
I would hope the Board would feel a responsibility to present a balance of information to the public, not simply a sales-pitch.
Again, I fully support Warrant Article #3 if tire crumb is excluded from consideration.
Robert L Barth, MD


Wednesday, February 4, 2015

Budget Unchanged at Deliberative Session

The board-approved warrant was left unamended in tonight's relatively interesting deliberative session (video).  Around 100 voters showed up, slightly less than in recent years.  Board members took turns presenting an award and the individual warrant articles.  The community gets to vote on the warrant articles on Election Day, March 10th.

Paul Gasowski was given the district's 2014-2015 Distinguished Service Award.  Among other things, Paul was honored for: his initial vision of a sustainable school district while he was an ORHS teacher, creating and chairing the Sustainability committee, connecting food service with local farmers, creating the ORHS video production department, leading the adoption of local cable TV for school board and student works and his service on Lee's Agricultural and Library committees.  Congratulations, Paul.  (Paul has appeared on this blog before.)

Board Member Rotner presents the ORHS field warrant article
That's new board candidate Dan Klein's ear in the foreground
As expected, the $2M artificial turf field renovation for the high school provoked the most controversy.  The proponents of the artificial turf were well prepared, with board member Kenny Rotner presenting the article.  Kenny donned his medical doctor hat, reviewing the research and preemptively enumerating and dismissing health concerns.

Dr. Bob Barth made a public comment worrying that "carbon black nanoparticles" that constituted over 30% of tire crumbs might have effects similar to asbestos.  UNH Professor Dr. Glen Miller, known to readers of this blog as a primary football proponent, also happens to have spent 10 years doing research into carbon nanotechnology.  He was able to definitively tell Dr. Barth that there's nothing nano about carbon black, and that your lungs would actually be quite good at expelling carbon nanotubes if you inhaled any, which you won't because they're expensive and never used as rubber filler in tires. 

Undeterred, Ann Wright proposed the only amendment of the night.  She proposed reducing the field appropriation and bond by $550,000 with the intent that a grass turf field replace the artificial turf field.  It looked bleak when it took a while to find a second for the amendment motion.

UNH Professor Dr. Kevin Gardner, expert in sustainability science and environmental contamination, spoke next.  Dr. Gardner reported on a Life Cycle Analysis comparing artificial turf and grass fields, taking into account all the steps including manufacturing, transportation, maintenance and disposal.   He said that artificial and natural fields of the same size have about the same environmental impact (and no human health impact).  Given that an artificial turf field can be played on non-stop, the fair comparison is to three or four natural fields, so environmentally the artificial turf is superior. 

People have been asking if I've read Dr. Gardner's memo about the field, which I have not seen.  [Wednesday: Here it is as an email from the mysterious Citizens Exchange, along with letters from Kim Clark and Board Member Rotner - thanks Sara.  Dr. Rotner's letter echoes his presentation of the issue at DS, and is really his own opinion rather than an official consensus of the board.]

If it'd been me, I'd be reeling under this onslaught of expert opinion.  But Ann held up like a champ.  John Parsons mercifully called the question, ending discussion. The amendment then failed nearly unanimously.

One gripe with artificial turf that wasn't really disputed by the proponents is that it tends to get really hot on hot days, and heat-related illnesses are a reality.

I find the Deliberative Session has brightened my feelings about the prospects of the field warrant article, which needs a 60% supermajority to pass.   It certainly seemed to have a lot of support in the auditorium tonight.  Principal Allen says there's a committee planning a VOTE YES ON 3 campaign.

The rest of the deliberative session went smoothly.  I said I was going to vote NO on the benefits stabilization fund in March, but didn't try to amend it.  New school board candidate (and likely member-to-be given that he's running unopposed) Dan Klein introduced himself and invited any questions to be sent to

Coming up on the calendar is Candidates Night Tuesday February 17 and Election Day Tuesday March 10, not to mention board meetings 2/11 and 3/4.   See you at all of these.

Monday, February 2, 2015

Turf Field At Issue At Deliberative Session Tuesday February 3, 2015

[Added Tuesday]  Foster's ran an article on our DS.

Tomorrow, Tuesday 2/3/15, is the ORCSD Deliberative Session. It's a real election.  As usual, it's 7pm in the ORHS auditorium. A majority of voters at the Deliberative Session can amend the existing warrant articles (also known as the ballot questions).  You must be eligible to vote in one of the three towns to be given a voting card at the DS.  For the first time last year, like most elections in New Hampshire there was same-day registration at the DS.  So if you can legally vote in any of the three towns (i.e. you're a US citizen at least 18 who lives in the district) you can show up at the DS, register if needed, and vote.  It's best to bring ID (and proof of address like a utility bill if you need to register), but you don't have to.

The law restricts the possible amendments. Typically an amendment will change the amount of money to be raised and appropriated by an article.  A person proposing to amend an amount can state how they intend any additional money to be spent, but even if the amendment passes the board is not bound by the intention.  It is not permissible to amend wording required by law or to change a warrant article from its original purpose. (Though I'm pretty sure zeroing out the funding is permissible, which presumably changes the purpose.) The default budget (the budget we likely get if the main budget article fails to pass) cannot be amended.

The Deliberative Session is an incredible part of New Hampshire democracy where a single voter who shows up wields enormous influence.  Usually around 120 voters show up, so it takes around 60 votes to modify the budget.  So please come by the DS -- your vote really counts.

After the DS the articles still have to be approved by the voters on election day Tuesday, March 10, 2015 to take effect. Typically 1500 to 3000 people vote in our March election.

I believe it only takes 25 signatures for citizens to get a warrant article onto the ballot. For the current year, the deadline to get those petitions in has already passed.

Here is the full warrant to be voted on.  It's from the agenda of the 1/21/15 board meeting and doesn't reflect a couple of minor changes made at that meeting.

Articles 1 and 2 elect the moderator and school board members.  Since only one person filed to run in each town race, the school board election is essentially over.  These articles cannot be modified at the deliberative session.
Article 3 is shaping up to be the most controversial question in this election.  It asks the voters to approve a $1.7M bond and to spend $2M revamping the athletic fields at the high school.   $0.3M has already been fundraised -- the board struck "privately" from the explanation as the funds are a mixture of privately raised funds (around $250K) and funds voted by past boards ($50K).  The plan is to fundraise another $300K for extras like dugouts and lighting.  $300K also seems to be the amount of interest paid over the life of the bond.  The field bond raises the budget an average of 0.5% annually for 10 years.  It's structured so the payment in the initial year is low, the maximum payment is in the second or third year and then the payments taper off.    Passage requires a 60% supermajority of YES voters.  
Here's the plan:

Almost no one has spoken out against the field at school board meetings.  This is apparently going to change at the Deliberative Session.  Most of the resistance in the community to the project comes from the artificial turf field within the track.  The main worry appears that the turf field is made spongy by adding crumbs of ground-up tires.  The claim is that turf fields get much hotter than the air on hot days and the tires give off toxins.  Former board member Ann Wright seems to be leading the resistance to the turf field.  She has been calling attention to this report of goalies getting cancer.  Principal Todd Allen, the main proponent of the field, cites EPA reports stating the fields are safe.

[Added Tuesday]  Ann Wright sent me an email after I wrote the above reminding me her objections were broader than just the tire crumbs.  I'm sorry about the misstatement, Ann.  She reminded me of the letter she sent around detailing her concerns.   She says at DS she plans to attempt to amend Article 3 by reducing the amount to $1,150,000, which she says is the amount needed for a natural turf (grass) field.  I am not sure if the amount she is referring to is the $2M appropriation or the $1.7M bond.  

[Added Tuesday]  I just did a quick search of my own and found that an alternative to tire crumb fill exists -- it's made out of ground Nike sneakers and in this case cost an additional $20,000 (HuffPo, USA Today).  As far as I can tell there are no studies examining the safety of this alternative fill, but the claim is that sneakers have already been extensively tested for harmful chemicals.

I haven't decided how I'll vote yet, at the DS or in March. Similar warrant articles have failed three times before (in 2006, 2007 and 2008 I believe).   Given the 60% hurdle, any significant resistance in the community will likely result in another failure of the field warrant to pass.

Here are some recent election results (percent YES).  2012:  Sustainability 64%,  Main Budget 56% 2013: Sustainability 60%, Reserve Fund 67%, Main Budget 62% 2014: Moh Café 71%, Barrington tuitioning: 84%, Main Budget 66%.  From these I think 60% sure seems possible.

Articles 4 and 5 ask the voters to approve the bus driver and paraprofessional contracts.  Three years ago both these groups accepted near-zero raises.  Those successful negotiations (from the taxpayers' perspective) led to some management problems: hiring bus drivers is difficult because our starting salary is so low compared to nearby districts, and new paras are being hired at larger salaries than experienced ones already working for us.  The current contracts correct these problems and I support them.  Voters at the deliberative session are not allowed to modify negotiated contracts.
Article 6 asks the voters to approve a benefit stabilization fund and fund it with $200,000.  This is somewhat similar to the reserve fund that the voters approved two years ago.  The idea this time is the board will collect extra tax from you in regular years, and use it to smooth out future tax hikes caused by benefit increases in the future.  For example, a few years ago the state shifted around $600,000 of retirement contributions to the district, an increase to the budget of around 1.5% annually.  If this fund existed then and had $300,000 in it, the board could have used the money so the increase was only 0.75% the first year, with the full 1.5% impact hitting the second and subsequent years.  Similarly, the state just shifted another $250,000 of annual retirement contributions to the district this cycle.
I don't know if anyone is planning on modifying this article at DS.  I'm currently inclined to vote NO on the article in March.  I'm starting not to like these various pots of money the district collects.  They each have particular covenants that restrict how and when they can be funded and spent.  Their overarching idea is to tax people now so they can be taxed less later.  I'd rather hang on to my money, thank you very much, and pay out the taxes when they're needed.  (The district has a practice of using the health insurance line as a stealth reserve fund, which is questionable if intentional, but does have the advantage of not having the restrictions that generally come with these other funds.)
Article 7 is the complete budget.  The district somewhat relaxed their tough inflation cap they've kept on the operating budget the last four or five years.  This year the cap is 3% compared to a 1.8% inflation rate, the difference being just about the amount of found money spent on the Moharimet Cafeteria.   (I've written more about recent budgets here.)
I'm going to support the board on the budget, meaning I'm going to vote YES on March 10, and likely NO to any changes proposed at the DS.  I have not heard of anyone planning to propose amendments.
Note that a NO victory on March 10 activates the default budget as a replacement for the operating budget (fund 10).  This cuts about $600,000 (1.5%) out of the budget.  It's always a bit confusing -- the warrant article wording, prescribed by law, makes it seem like the default budget replaces the total budget, but it doesn't.
That's it for now.  I hope to see everyone at the Deliberative Session tomorrow.

Friday, January 30, 2015

School Board Elections Decided, Congratulations Dan Klein of Madbury

Dan Klein, unopposed for the
 Madbury ORCSD board seat
As of 4:57 pm today, it appears the Oyster River school board elections are essentially over.   Congratulations to our newest school board member to be, Daniel Klein of Madbury. Congratulations also to continuing school board members Maria Barth of Lee and Al Howland of Durham.  Maria was Chair for two years beginning 2012, while Al is currently Vice Chair. Maria, Al and Dan each will begin a new three year term representing their respective towns at the March 18, 2015 school board meeting.  I wish them all good luck.

Of course nothing is official until election day, March 10, 2015.  This year the three town-specific seats are up, so there are three separate races.  Five pm today, Friday January 30, 2015, was the end of the filing period.  Only Maria, Al and Dan filed to run, one for each town seat, so each will appear on the ballot unopposed.  I predict they'll all win.  There is always the possibility of  write-in campaigns.

Dr. Ed Charle currently holds the Madbury seat.  Dr. Charle has unfortunately declined to seek reelection.  I for one am extremely grateful for his service.   He served at an important time in our district's history.  Merely by getting elected by a landslide, Dr. Charle made a major advance in healing our district.  He decisively beat then-incumbent Jim Kach, whose offensive tweets, secret efforts to replace the superintendent and refusal to resign had seriously divided the community.  Over his tenure, Dr. Charle was liaison to the sustainability committee, which he shepherded from annual warrant article funding to an integral part of the operating budget.  We'll miss you, Ed.

It's hard to believe, but this Tuesday, February 3 at ORHS 7pm is the Deliberative Session, a real election where a small fraction of the community who bothers to show up (usually around 120 people) gets to amend the warrant articles before they're voted on on March 10th.  I'll write more about this soon, but with the board apparently decided, the election will mostly be about the field bond and the budget as a whole.

Candidates night is Tuesday, February 17th.  I'm sure we'll learn more about the new Madbury representative to the board, Dan Klein, in the upcoming weeks.

Here are some procedural details, just in case you want to know.  The ORCSD board consists of seven seats: a Madbury seat, a Lee seat, a Durham seat and four at-large seats.  Each seat has a three year term.  Every three years, like this year, the three town-specific seats are up for election.  Each town's seat has a separate race on the ballot, and the candidates in a given town race all have to live in that town.  Somewhat oddly, the school district ballots are always identical in all three towns so each district voter gets to vote in all three town-specific races, not just in the one for their own town.  In each of the intervening two years, two at-large seats are up for election.  All the at-large candidates are on the ballot in a single race, each voter gets to choose two and the top two vote-getters win the seats.  If a vacancy opens up, the board may appoint an eligible person to serve until the next election for which potential candidates are afforded a full filing period.   A special election race to fill the vacancy for the remainder of the term is added to the ballot.

Again, congratulations to Dan Klein, Al Howland and Maria Barth, each running unopposed and thus each very likely be elected on March 10 to new three year terms on the Oyster River Cooperative School District School Board.

Friday, January 23, 2015

Budget Metrics

Budget Goals

I don't like the way the board sets budget goals.   This is an essay on how the district counts our money.  It's not my most exciting writing, but it's fundamentally concerned with how our taxes get raised.  Even if you don't read the whole thing, you might want to scroll down for some informative charts.  They're interactive so you can hover over the various elements for more information.

Let's start with the main budget goal for FY15, the current school year:

FY15 budget goal from the September 18, 2013 minutes

First what's good about this.   The board is constraining budget increases to not exceed the inflation rate (usually around 2%), in other words, zero real growth.   This is an ambitious goal for a number of reasons.   In New Hampshire, nominal cost per pupil grows much faster than the inflation rate, often a few percent more annually.  So the cost-of-living constraint is a reduction relative to the state average.  Also, given tuition students and a surge of new kids in the district, our enrollment is rising, but we are not allowing ourselves to spend more money to accommodate the new students. This essentially forces a further reduction per pupil equal to the rate of increase of the student population.  This is all good news for the taxpayer.

I've been making public comments at board meetings for a while about what I think is bad about goals of this form.  I have three main objections. The first is that I don't believe the "not subject to COLA" exceptions should be included.   Negotiating contracts are a big part of the board's work, and this clause allows them to shrug off a poor job.  Dealing with external things like health insurance costs and shifting state support is a big part of budgeting -- when you get a shock in one item you have to find the money somewhere else.  The time for the mealy-mouthed language is after the bad thing happens -- you can use it to explain to taxpayers why you didn't meet your simple, ambitious, clearly articulated goal.  The board has been happy to reap the rewards of unexpectedly low health insurance costs, so no fair punting the hikes.

My next two objections are about the word "Budget."   First, it's not clear what exactly this means.  (The most likely contenders are the operating budget and the total appropriations.)  Second, it's the wrong goal to measure as it doesn't reflect important sources of revenue under board control, mainly tuition income and fund balance (previous year's unspent money).  Most of the rest of this essay covers this in detail while developing an alternate budget metric.

Here's the goal approved for FY16, the next school year.  It governs the work on the budget currently being developed.

FY16 Budget goal from the September 3, 2014 minutes

This is an improvement over the FY15 goal in an important way: it makes it clear that it's a constraint on the operating budget.   On the face of it, it's also an improvement because it reduces the exceptions -- health insurance and negotiated contracts are no longer excepted.  But it still excludes the increases from negotiated contracts as those need to be approved as separate warrant articles.  I guess we're counting health insurance as an expense this round.  (The health insurance budget line has acted like a stealth reserve fund in recent years, but I'm not going to get into that here.)

This also got worse in some ways.  I don't want to focus on the size of the increase in this essay, but I'll mention 3% is larger than an inflation cap, which would be around 1.8%, and that the difference is almost exactly the amount of found money from the LGC settlement which the district spent on Moh Café.

I'm not too fond of the preamble, which is a bunch of excuses about the increase.  I don't mind a rationale, but separate it from the actual goal.  It's a bit disingenuous too, given that by excluding warrant articles they excepted the negotiation increases and true capital expenses would be outside the operating budget (I think they're mostly talking about maintenance, which is an operating expense).  Actually the exception is even worse than it looks, because the district is probably excepting those items as costs this year, but comparing the total to the un-excepted budget of the previous year.

How Are Budget Increases Measured?

The real problem is the quantity being measured doesn't measure a few big ticket items that the board controls.  From what I can tell, this year the figure of merit is

increase = (FY16_operating_budget - state_shifts - negotiated_increases) / FY15_op_budget - 1

The goal is to keep this increase under 0.03.  Each of the subtracted terms will only be included if it makes the increase smaller, which is icky in my book.

Instead of subtracting costs from the total budget to obtain a figure of merit, it makes much more sense to subtract non-tax revenue, as those go to lower taxes, just like spending less.  Instead of using the operating budget, it makes sense to use total recommended appropriation, which includes all board recommended warrant articles (especially including negotiated contract increases).   And it certainly make sense to compare the figure to the comparable figure the previous year, instead of a different figure that results in a smaller perceived increase.

I'm not writing a mystery, so I'll tell you now that the form I prefer is

CostToGov = total_recommended_appropriations - total_school_revenue

increase = CostToGov_this_year / CostToGov_previous_year - 1

I called it CostToGov (cost to government) as it represents the amount that will be covered by federal grants, state taxes and grants, and local property taxes.  We'll get into exactly what's included in total_school_revenue below, where I call this metric TotA-Sc-FB-Xf.  Let's explore various budget metrics to see how I arrived at this one.

Options for Budget Metrics

The operating budget (fund 10) represents all the money needed to operate the school for a year.  I think there's a bit of difference between what the ms-26 calls the operating budget, as that includes transfers to other funds to fund things like food service (which also gets revenue from meal charges and from the feds).  Those amounts stay pretty constant so I'm not going to worry about the difference too much.  Since the district is excluding recommended warrant articles in their goal, the increase as a result of negotiated contracts is not counted.

The total recommended appropriation is the operating budget, plus the first year amounts on any warrant articles recommended by the board.   I think it is a better metric than the operating budget because the additional warrant articles that are approved by the board will end up taking real money out of taxpayers' pockets so should be counted.

However, just focusing on the expense side of the budget leaves out important board work that affects taxes.  The problem is particularly acute given the increase in tuitioning.  We've reached the point where more tuition students means hiring more teachers.  This causes an increase in the operating budget to pay their salaries and benefits.   We're told this increase is more than offset by increased tuition revenue to the district.   But the spending metrics, like operating budget or total appropriations, do not include the beneficial effect on taxes of taking in tuition revenue.  Thus, under the pure spending metrics, taking tuition students is a bad idea, as it increases spending.   But in fact it's a good idea, as revenue received substantially exceeds expenses incurred, thus lowering the tax burden on us locals.  Our metric must reflect this.

Historically, the board appropriates a bit more money than it needs every year.  The amount left unspent at year end is called the fund balance.  It's returned to the taxpayers every year, lessening next year's taxes.  (Now at board discretion it can also be transferred to the reserve fund.)   The district keeps pretty good tabs on the expected fund balance.   Lately the board has been spending much of the leftover money instead of using it to lower next year's taxes.   My contention is that this is because the budget metric we use does not penalize this behavior, or reward a large fund balance used to lower taxes.

There are other revenue sources besides tuition and fund balance, though those are the big ticket items pretty directly under board control.   Locally, we also have food service sales, investment earnings and transportation fees.

There are also state and federal grants as a revenue source.  (This is different than the state tax portion allocated to the district.)  These tend to be largely out of district control so I leave them out of total_school_revenue.

It's my contention that what taxpayers are most concerned with in the school budget is their total tax bill.   Since the state portion of the school property tax is out of the district's control, it's the local property tax I consider here.

Possible Budget Metrics

I typed in seven years of MS-26 data, including the one the board signed a couple of days ago.  This is the form the district files annually to inform the state about our budget.  It's produced along with the budget, so represents information available for use in forming metrics.  It's all in this spreadsheet.

Out of the data I made the following five metrics:
  • OpBudget: Operating Budget, excludes additional warrant articles
  • TotA: Total Appropriation, includes operating budget & recommended warrant articles
  • TotA-FB-T: Total Appropriation, less Fund Balance and expected Tuition
  • TotA-Sc-FB-Xf:  Total Appropriation less School Revenue (includes tuition and food service), fund balance and transfers from other funds.
  • LocalTax: The local tax apportioned among the towns
Before we look in detail at these, let's focus a bit on the revenue side of our income statement.


Unlike business, accounting for schools tends to focus mainly on costs -- where we're spending money.  For our purposes here it's helpful to change our focus and look at the revenue side of the income statement, where our money comes from.   (The source of the graphs is my MS-26 spreadsheet.)  All the graphs in this essay are in nominal dollars, meaning they're not adjusted for inflation.  I typically would adjust for inflation, but inflation's been running at a fairly constant 2% so it doesn't matter that much and this way is simpler for most non-financial folks to understand.

The bulk of the money to run schools, around 2/3 ($27M of $40M), comes from local school property taxes, the big green bars.  How this money is apportioned among the towns and eventually the property owners is the subject for another day.

After local tax, the next biggest chunk is Statewide Enhanced Education tax, coming in at $8.4M, around 20% of the budget.   The amount is largely out of the hands of the school boards.  It appears as a separate line on your tax bill.  The state collects it and doles it out among the towns.  The amount collected and the amount given back aren't the same -- this is the line having to do with Claremont and donor towns and a bunch of stuff I'm not really clear on that changes every few years.

The remaining 11% or so are a bunch of smaller items we look at in detail in the next graph.

I drew the gridlines here every $400,000.  Given our budget is around $40M, each $400,000 is about 1% of the budget. 
The big spike in the green line is cut off -- it represents $2M of additional revenue to build the new field ($1.7M bond + $.3M transferred from existing district track funds).  The field has its own warrant article.  It requires a 60% supermajority of voters to pass.  I'm guessing it's unlikely to pass this year.  Even if it did, it wouldn't impact taxes much next year -- for some reason the payments are low the first year.  (Principal and interest payments would average about 0.5% of the budget for each of the next 10 years.)   It does represent $2M of additional spending, so as we will see, it does impact the total appropriation.
Besides the bond, the two revenue lines that change the most are tuition and fund balance.  Tuition is what we get from taking other, mostly Barrington students, and you can see that the district has been growing this for a while, even though the formal 10 year plan with Barrington to grow it further doesn't officially start until September.  Fund Balance is the unspent money left over at the end of the previous school year, which is essentially rolled over into next year, lowering taxes.  The remaining items include other school revenue (mostly food service, investment and transportation income), revenue from federal programs, revenue from state grants (mostly building construction funds) and revenue from transfers from other funds the district has.
I put "non-tax" in quotes because much of these are funded from taxes, just not this year's state and local property tax.  Tuition is mostly taxes collected from Barrington folks, fund balance and other funds are mostly from taxes collected in previous years and state and federal grants come from other taxes.  The exception is the school revenue, which comes from real business activity (selling food or bus seats). 
The district doesn't have that much control over the federal and state grants -- we pretty much have to take what we get.  The remaining items are much more under the control of the district.  For example, the board decides directly whether to spend the fund balance before the year ends or roll if over into the next year.  So when I considered which revenue sources to include in a budget metric, I thought it would be best to include sources that the board controlled and leave out the ones it didn't. 
What really matters is how much these various sources of revenue change from year to year. Let's look at that next.

This graph shows the variation in various revenue lines year to year.  Some, like Fund Balance Revenue, jump around wildly year to year.   Some, like State Grants, stay pretty constant year to year.  Tuition goes up every year.   Again the FY16 bond bar goes to $2M, but I let it be truncated on the graph.
That ends our tour of the revenue side of the income statement.  Now we can look at budget metrics.

Visualizing Budget Metrics


I plotted the five budget metrics mentioned above.   The purple line, local tax, uses the right scale ($10M less); the rest use the left. 
Ideally what we're looking for in a budget metric is one that tracks local tax closely while only including items controlled by the district.  These criteria are in conflict -- the more items you leave out, the more the metric will deviate from local tax.   Examining the graph, you can see the orange (TotA-FB-T) and the green (TotA-FB-Sc-Xf) track local tax pretty closely.  The orange deviates in FY16 because it includes the spending on the field but not the revenue from the bond and transfers.
Let's look at the percentage change of these metrics.  These are possible figures-of-merit the district could use for goals. 

The current goal is to keep the operating budget increase below 3% -- that's keeping the FY16 blue bar below 3%.  The board's been claiming success, but it looks a bit above 3% by my calculation.  I think the difference is the district is excluding $260,000 of cost shifts from the state -- the state has again reduced its contribution to staff retirement plans.
You can see how the green bar (total appropriations less school revenue) track the violet bar, local tax.    Usually the local tax is larger in magnitude than TotA-Sc-FB-Xf.  This is because, all else being equal, a 1% change in spending creates a 1.5% change in taxes.  This leveraging effect is because a given dollar amount is a larger percentage of the $27M local tax than the $40M total budget.   The exception is FY15, where a boost in the federal revenue helped lower local taxes. 


You can see why I chose TotA-FB-Sc-Xf as the best metric -- it captures all the recommended spending, less all the revenue (nominally) under the control of the board.  It leaves out state and federal money largely out of the boards hands, but despite that it tends to track local tax pretty closely.
If you define
     total_school_revenue = FundBalance + SchoolRevenue + Transfers_and_bonds
then the budget metric becomes the net cost figure:
     CostToGov = Total_Recommended_Appropriations - total_school_revenue
One problem with the metric as currently conceived is that it is entirely based on the board's proposed budget as reflected in the MS-26 filing.  It does not reflect the outcome of the previous vote, where some of the warrant articles could be voted down or (at the deliberative session) have their amounts amended.  So if the taxpayers vote down the $2M field, next year the board would get credit for reducing total appropriations $2M, which doesn't seem quite right.  A better scheme would be to compare the proposed budget against the actual passed budget.  Most years everything passes so it doesn't make a difference, but next year it might.
The metric as perceived counts transfers from funds as a good thing, as they lower taxes.  I wasn't sure whether to count transfers or leave them out.  I counted them, which seems only fair as the TotA metrics penalized the board if they recommended adding to the funds in the first place.  I lumped the bonds in with the transfers as they're sort of transfers from future years in the way drawing on a fund is a transfer from past years.  Since the spending of the bond money on the field is appropriated, it adds to costs, so the bond principal has be subtracted in the metric to accurately reflect the effect on taxes.  Probably if the board doesn't recommend a bond (is that even possible?), it won't count in total appropriations (which I'm really using as a shorthand for total recommended appropriations) so we shouldn't count the revenue from the bond in the metric either.
Our operating budget is going to grow as we staff up to take tuition students.  If we stick with operating budget as our metric, the implication is tuition students are bad as they increase costs.  But, as long as the tuition revenue exceeds the additional expense, tuition students are good for the taxpayer.  This reality is accurately reflected in CostToGov.
Concretely, each year we take around 14 more students for $200,000 more revenue annually.  This is a good deal for taxpayers as long as we spend less than $200,000 staffing up, ideally much less.  Presumably 14 students means about one more teacher, maybe one more para.   Say we spend $100,000 to hire them.  If we continue to use Operating Budget as our metric, and we want to keep the operating budget increase below inflation, we need to cut that $100,000 somewhere else.   Basically, we'd be taking new students but not allowing ourselves to fund their staffing out of the tuition revenue.  If things keep going like they have been, the result will be an additional cut of about 0.25% off the budget every year.  While this is appealing to me as a taxpayer, it's going to be rough on the schools without making any real sense, and bites deeper as we take more and more students.
In actuality, we seem to be hiring at a much greater rate than that. I need to remind the board that our purpose taking tuition students was to increase choice to all students, so we should make sure new hires have a diverse skill set. Also, for taxpayers sake we need to keep the new hiring way below the tuition increase and start hiring younger, less experienced teachers whom we mentor for the future.
Similarly, the board has been treating the fund balance as free money, spending much of it on a wish list as the year end rolls around.  But spending the fund balance this year increases next year's taxes.  That reality is not reflected in the Operating Budget metric, but is in CostToGov.


Currently our budget goal has been to keep the increase in operating budget below inflation or so (3% this year).  This is an admirable goal, as school costs generally rise significantly faster than inflation.  We allow ourselves some outs so things like negotiation outcomes and decreasing payouts from the state to fund retirements that are shifted to local taxpayers don't count toward the increase. 
I argue that
     CostToGov = Total_Recommended_Appropriations less Total_School_Revenue
better tracks the school portion of the local property tax we pay, so it makes much more sense as a goal to constrain that to the inflation rate, rather than the operating budget.  Total_Recommended_Appropriations  includes not only the operating budget (without excuses) but all recommended warrant articles, including new contracts. Total_School_Revenue includes the revenues that are under board control, especially tuition income and last year's fund balance.  It excludes state and federal money largely out of the board's hands.
If we don't switch from an OperatingBudget metric to a CostToGov-like metric, it essentially means we will not spend tuition revenue on staff for the increased student load, which doesn't make much sense.  Not switching encourages the board to go on a spending spree at year end to make the fund balance as small as possible, as there is no penalty for this, nor is there a reward for saving, leading to a high fund balance which lowers next year's taxes.
I'm going to leave this posted for a while to allow for some comments before I send it as a letter to the board.

Thursday, September 25, 2014

Budget Season Approaches

It's been over five months since I've posted.  I attended most and watched all of the seven board meetings in the interim (minutes 5/7 5/21 6/4 6/18 7/16 8/20 9/3 9/17).   Mostly the board spent money over the summer -- especially on Moh Café and the new floor in Mast Way's gym, because, you know, equity.  I don't really have the time or energy for a full report, so I'm going to mostly focus on the budget here.

Newsweek ranks ORHS 110th Best High School in USA

The 2014 Newsweek rankings came out and ORHS ranked 110th out of 16,000 high schools.   This is the second highest in NH.  (We were 753 in the 2013 Newsweek rankings.)  Somehow our graduation rate percentile, whatever that is, was 67.3, which doesn't sound like the perfect record I thought we had, so maybe there's room to move up next year.  Newsweek did a second list of Top Schools for Low Income Students, to address criticism that their lists were dominated by schools with low numbers of students in poverty.  We were 279th on that list.

Principal Allen, who normally doesn't put much stock in magazine rankings, was happy to trumpet this one.  Congratulations to all the students, staff and administrators who made it happen.

Newsweek 2014 selected high school rankings, click to enlarge


Next Board Meeting 6pm 10/1 at Moharimet

The 9/3 meeting was at Mast Way and the 9/17 meeting at ORMS.  The final stop of the tour is 10/1 at Moharimet.  Note the early start time of 6pm -- apparently there will be a dedication of the new Café/Gym before the meeting proper starts, presumably at 7pm.

It's been great getting out of the high school into the other buildings for these meetings.   Great for everyone, that is, but our crack AV guy Alexander Taylor.  Alex spends around 6 hours moving, setting up and tearing down a TV studio each time.  That's not even counting the actual meeting time or the time to reassemble everything back in the high school.   Hang in there, Alex!

ORHS junior Maegan Doody, the student member of the school board, happens to be one of the top runners in New England.  This impressive young woman was recently featured as WMUR's Hometown Hero

Budget Season Approaches

The board is getting ready to prepare and pass the FY16 budget, which covers the 2015-2016 school year.   They have set a broad goal to keep top line costs growing at 3% or below.   For the last few years the board has been keeping top line growth below inflation (currently running around 1.7% this year) but didn't think they could reach that this year.

Since the normal tendency is for the budget to grow faster than inflation (school cost inflation is generally higher than consumer price inflation, see the chart below) the board and administration have to find ways to cut to achieve zero real (inflation-adjusted) growth.  Generally, this has been done by pulling rabbits out of hats -- each cycle the board or administration has to come up with something to offset the increases.  A few years ago it was the energy audit and subsequent overhaul, which cut ORHS annual fuel costs by $90K.  There was also staff reductions through retirement incentives, which cut around 14 positions, saving $1M a year.   Last year there was a large reduction in health insurance costs.

This year's rabbit could have been the LGC fraud settlement of $500K.  But instead of passing that back to taxpayers, the board and the voters decided to spend it on Moh Café.   That $500K is almost exactly the difference between a 1.7% and a 3% hike.  With the extra extra space added, Moh Café will cost more than that, which will be paid with the liquidated capital fund and the fund balance.  The fund balance is the unspent money at fiscal year end that would normally be used to reduce next year's taxes (or go into the Reserve Fund).

It doesn't sound too bad, and it's not even quite as bad as it sounds.  The increase in tuition students (done so far without additional hiring) will bring in additional tuition revenue.   This will lower taxes, even though eventually the top line will increase.   Conversely, spending down the fund balance rather than returning it to taxpayers doesn't effect the budgeted amount.  Unfortunately the district has chosen to use what I've been calling the top line of the budget, total budgeted spending, as its measure.  This means the savings from tuition dollars won't be reflected in the measure nor will the losses from spending down the fund balance.  Perhaps a better measure would be total local tax burden, which has the various revenue streams that lower local taxes (fund balance, tuition, state and federal funds, fees, etc.) subtracted out from the top line.

A Brief History of Oyster River Budgets

I've been working on this chart that shows how our budget went awry in the 2000s.   If I can find the data, I'll extend it back in time even further.  I tried to include (for admiration or blame) the person who was Chair when the budget passed, but I wasn't sure on a few.  Note that (barring resignations, which occurred a few times) the board member who gets elected chair in March of a given year will be in charge of passing the budget for the fiscal year two years hence.  So, for example "Brackett 2013" refers to the FY13 budget passed by Henry Brackett.  Chairman Brackett was (re)elected chair in March 2011, got the board to pass the budget in January 2012 (or so) and sent it through the deliberative session in February 2012.  That budget was passed by the voters in March 2012 and was in effect July 1, 2012 through June 30, 2013, which is FY13.   The idea is to associate a name with the increases or declines, though in actuality the other board members and the voters have influence. To my knowledge the voters have not voted NO on a budget over this period.

All the data (except school board chair names) were derived from the NHDOE cost per pupil and valuation reports (see nhdoe).  This means I used cost per pupil (CPP) rather than the total budget.  The CPP is adjusted to remove transportation, debt service and tuition expense to make the various districts in the state more comparable.   It's not the best measure, but useful and easily available, and since we're looking at the year on year change, the various adjustments are less important.

click to enlarge

The chart shows the year on year change in the various items.  In blue is the change in the state CPP, the average it costs to educate a child in NH.  Change in ORCSD CPP is in red.  These are all in nominal (non-inflation adjusted) dollars.   Rather than adjusting for inflation, I included the inflation rate in orange -- it's been hovering around 2% for a while now (though it did drop to zero during the initial part of the financial crisis, FY2009 in the chart).   The green bars are the change in ADM, which what the state uses for enrollment.  I think it's calculated from the attendance on October 1 every year, so it tends to be a little lower than what we usually think of as the total enrollment.  Looking only at the year on year change makes that irrelevant.  (If I'm right, parents you can make your school district appear more frugal by sending your sick kids to school on October 1.)
The blue bars are state CPP.  You can think of it like the CPI, but for school costs.  Notice that it generally exceeds the CPI  (orange bars), often substantially.  Districts have definitely tightened their belts after the financial crisis, as the earlier numbers are all above 5% and the later numbers are all below 5%.

The red line is ORCSD CPP.  Since the CPP is determined not only by the amount of spending but also the number of students, I included the green enrollment measure.   If the district kept total spending constant, CPP would increase by the amount enrollment falls.  In the years 2003, 2004, 2005 and 2006 the increases in CPP are mitigated by enrollment decline, so the red+green (which is a proxy for change in ORCSD total spending, as it's the change in per pupil cost plus the change in enrollment) is about equal to the blue state CPP those years.  Assuming the state enrollment stayed about constant (I have to check into this) this means our boards didn't so much raise taxes faster than the state education increases as failed to cut costs in the face of declining enrollment.

Former chair Barth is responsible for last year (FY14) and the current school year (FY15).   Both years the district brought in top line spending increases at or below the inflation rate, in the face of enrollment increases.  That should continue our recent pattern of growing below the state rate, but the data isn't available yet.

In FY2001 our CPP was around 13% above the state. We got as high as 36% above the state in 2006.  Since then it's been a slow march down to 23% in FY13.  I'll guess we're now around 20% in FY15.  I'd say 5% to 10% above state CPP is where we want to be while remaining a top school in a relatively well-off community.  If we can keep our belts tight a few more years we'll get there.   The rest of the state tightening their belts makes it a slower process.

Policy IIB

The real driver of costs is staff.  The main driver of faculty size is policy IIB, which sets the number of teachers per class.  I think the current policy, irrespective of the numbers, is rather deficient.  It's short, so here it is in its entirety:

Policy IIB, click to enlarge

My main problem with policy IIB as written is that the guidelines, all of the form "not to exceed," are essentially benefits to the teachers and students.   They limit the size of classes.   The only nod to the taxpayer who has to fund all this is "classes below 12 will be brought to the attention of the Superintendent for approval."  There is very little here that attempts to limit how small classes can get, and thus, there is little limit on how large the faculty can get.

For years, I've heard from the administration and board that Policy IIB has a guideline for minimum class size of 18 (for example, here and here).  I blindly parroted this factoid until I bothered to look it up.  As anyone can see, the only mention of 18 is the maximum K guideline, and the only mention of a minimum is "below 12" requires approval.

So I would respectfully suggest guidelines of "no fewer than N students" be added to the various grades.  Or perhaps, just an ideal class size goal to aim for, neither a maximum nor minimum.  Another deficiency of the policy is it mostly silent on how small classes like shop, which have fewer than 22 workstations, can get without approval.  Furthermore, the policy also lacks guidance about what happens when the principal wants to have a class whose size is outside the bounds.  How about: the principal needs no approval for a class with one student above or below the guideline, superintendent approval is needed for a 2 student deviation and a deviation of 3 or more requires board approval.   There should be an annual report on how the actual class sizes with the guidelines.  

The policy doesn't distinguish between general and special educators, though it has been interpreted not to include special educators.  Furthermore, no mention is made for guidelines to determine the number of paraprofessionals that assist teachers.  Another thing not specified is whether the guidelines refer to each section of a multi-section class, or the average as is often assumed.  Is there a difference between required classes and electives?  These all should be clarified.

Once the form of the policy is improved, the district could have a serious discussion of the actual numbers in the policy.  Is 18 the right minimum for high school?  How will we staff up in response to enrollment growth, locally and tuition students?

We always hear that staffing is the prime driver of the budget and that the class size policy drives staffing.  I have been making the point about policy IIB not having minimum guidelines since March.  (I've had the IIB reference in the banner above since then too, as I tried to guess at the current big issues.)   So I was really disappointed by the board discussion on 9/3 which concluded that the policy IIB had been reviewed and required no changes.

It's ultimately the voters, or perhaps the board as their representatives, who should determine the tradeoff between small classes and lower taxes.   With the influx of tuition students and the surprise turn in local enrollment we will be staffing up.  This is our chance to get to our class size goals while avoiding debilitating layoffs.  If we fail to reconcile the tension between taxes and class size now it will be much more painful to do later.

Well, that's plenty for now.  Bye bye.

Thursday, April 24, 2014

Moh Cafe Turmoil

Moharimet Cafeteria News 

At the school board meeting, the superintendent reported that contractor bids for the Moharimet cafeteria came in over $800K, greatly exceeding the $545K estimate approved by the voters in March.  Apparently the economic downturn is over and contractors are raising prices.  An effort was made to pare back the project to bring costs back in line.  Facilities Director Jim Rozycki is handling the redesign and negotiations. Examples of changes include cheaper acoustic tiles, eliminating duplicate  HVAC work and going from 5 to 2 skylights.

In addition, there is a lot of support to increase the gym width by 10 more feet.  That's in addition to the 20 feet already approved.  Two claims were made in favor: The 50% additional space would cost only 12% more and the modification leaves Moharimet and Mast Way with about equal gym space.  The argument against is that it doesn't make sense to spend more money on space given the expected enrollment decline.

Madbury selectman Jay Moriarty relayed the town's support for the additional expansion,  saying it's OK for the district to further encroach on the town's property line and going so far as to offer town resources to help remove trees.

My guess is the board will approve the additional space at the next meeting.  The money will come from the Capital Reserve Fund opened up by the voters in March and the expected year end fund balance.

The fund balance is the unspent money already raised from the taxpayers.  By law it has to be spent this fiscal year, transferred to the Reserve Fund or given back (i.e. used to reduce next year's taxes).  The business administrator compiled a list of possible uses for the leftover money, mostly facilities maintenance from the capital improvement plan.

Strings Teacher Hired

The board approved the hiring of Andrea von Oeyen as the music teacher who'll concentrate on strings. Ms. von Oeyen has 8 years experience and is currently a teacher in Alton.  She has been involved in our OREO (Oyster River Elementary Orchestra) after school program. 

Board Goals Enumerated

Most of Wednesday's meeting was devoted to a discussion of board members' goals for the district.  All the board and many administrators spoke about their top few priorities.   Here’s my read of the most commonly mentioned ideas -- the board will presumably compile its own list soon.

Math Consultant.  Apparently our students are doing well in math class but poorly on standardized tests.

All Day K Plan.  The idea is to create a transition plan for consideration.

High School Field. Lots of support to bring this long simmering plan to fruition.

Many other goals were mentioned,  including improving teacher evaluations, later start time for middle and high school, solar power and improving areas of academic weakness. 

I'm in Florida typing this on my phone, so I'm gonna end this here.  I'll add links later.  Bye.