Jun 19

Alameda Budget – The Future Shortfalls

Looking at the Alameda Budget going forward is more like a horror movie. The light at the end of the tunnel is a freight train and the pro-growth contingency is furthering the disconnect with budget shortfalls and revenue generation. Check it out:

The Silly Hall fiscal crisis happening is as dangerous as a 10 year with a credit card at a mall.

There are around 8 major developments in progress, and all are coming due in about the next year. Collectively, they could increase the population between 8 and 12% population on the Island. Some estimates say it might increase upwards of 18%. There are many problems a jump in resident population within a short time period can cause. Least of which is traffic, but that is another discussion.

The budget discussion always appears one sided: spending short falls for services, but the supply side needs to be interjected here. Revenue first, growth next. The aforementioned population increase needs to be qualified (as it never is): renters vs. home owners. Renters don’t pay into the property tax base, require more county based services (view $$$ flowing to county not city) and compound finite street congestion. So, the supply side is not being raised here yet service use and traffic are higher.

The City wants to balance its budget on the backs of people who drive, and looking at other municipalities, it is going to result in people driving less. Like the cigarette tax, a diminishing resource is the source of these revenues which will be insufficient to meet future demands. This means the claim of adding 50% to existing revenues by way of tacking on parking fees or increased traffic citations could fall short. If this magic number for parking fees or traffic tickets fails to deliver, what is plan B?

Parking fees and fine numbers quoted ‘add’ $375,000 more to existing revenues of $675,000. So, that is not going to happen. Here is their Plan B alternatives (they just don’t know it yet): drop the speed limit to 20 across the Island? (or 20 MPH zones), or more incidious – the police start a quota based system to hit ‘goals’. Why not just give every ‘resident’ a sticker and have a toll charged to out of town visitors that cross a bridge? (that just slipped out, oops.)

Or, let’s start pitting renters vs. homeowners with differing stickers; renters pay a parking fee, homeowners are ‘comped’ 2 stickers per household. Going further with this, you could just have an Island vehicle tax.

Delving into the municipality madness is dangerous. They may have just gotten more ideas here. The point is revenue along with fiscal restraint can stem the direction we are heading. But first, looking at where the money is being spent and gaining control of this is the beginning.

Look at the basics and the root problem is revealed. Police and Fire are an astounding 75% of Alameda’s budget. Many munis allocate 40%, and even that is high by a majorities standards. Alameda wakeup and tighten your boot straps or suffer the consequences.

Jun 05

ASUD Budget Short Falls: What They Could Learn From Private Sector

ASUD budget number crunching provides an interesting glimpse. For most professionals, projections and budgets are closely monitored throughout a year. Wall Street does this quarterly and punishes or awards those firms by missing or blowing out these numbers. Anyone in sales knows the importance of forecasting and its direct impact to budgeting, projecting and revenue.

ASUD schools approach this process differently, waiting to the end of a fiscal year to look at, adjust and project numbers. Thus, their revenue also fluctuates in accordance. These fluctuations are partly because student populations fluctuate with the island population, Coast Guard personnel, the flight of families to alternative education options, etc. But it doesn’t have to be viewed this way because they reasonably know their revenue within a given year.

What many people do not know is the State provides a fixed dollar amount per student per day for attendance. (Over $100 per student per day in 2003. This is also a main reason why truancy hurts schools. The budget is directly impacted.) There is the revenue. Do the math: one student equals  ~$2,000/month, a class of 30 equals $60,000/month.

This brings up several topics beyond the scope of what will be discussed here, however, consider this set of conditions:

  • how many teachers are making $60,000/year?
  • a teacher’s salary is ‘paidout’/secured after 1-2 months (assuming 401k, health, benefits, etc.) Where is the other 8 months ~$480,000?
  • given certain expenses like school property mortgage, utilities, certain basic operational and local administrative, support, where is the breakeven point?

Now these calculations are only from one class of 30 students. A school with 10-15 classes is a sizeable revenue stream.

This is no different than private sector issues. In fact, the revenue is ‘fixed’ somewhat. Private sector doesn’t have this ‘safety net’. Prospective clients change their minds, decrease or shift their budget allocations and even move with a different proposal (company). Sales projections have to change accordingly, but these are manageable as they are weekly if not daily adjustments. Why does ASUD or schools in general ‘think differently’?

More frequent adjustments could disarm any school board outbursts, diffuse potential crisis situations and allow time for alternative plans to be formulated to either bridge short comings and weight alternative solutions. Also, it would alleviate any panic from families caught off-guard by the poor state of affairs.

But, following the money and a small or modest school bringing in ~$5,000,000 revenue to the district, it seems like better money management is in order. California is falling behind peer states.

Accordingly, the numbers don’t add up; either significant per pupil changes have occurred at the State level or it doesn’t pass the audit test. Neither the State information in the link above nor the ASUD figures tie back to one another. For example, per pupil expenditure by the graphs above are ~40/day. ASUD budget figures calculate ~10/day. More research is definitely needed to find out where the other $60 per student went and in dealing with government figures, is this the smoking gun to our educational woes?

Below is a post from Blogging Bayport Alameda giving us insight, through school numbers, as to how the 2013/2014 school year is shaping up. Of course, they uncovered this at the most recent school board meeting allowing a very short window of time to solve, amend or significantly influence the options.

Negative Percent

Last Tuesday’s School Board meeting there was an agenda item with recommended budgets by school site, the short summary is that most schools sites have cuts.

I put into a spreadsheet the numbers from last year’s budget and compared it to this year’s budget.  The stuff in the light pink is for 2013 and the blue compares this year’s numbers to last years:

 

budget

I dropped into an Infogram the 2013 budget per student as well as the percentage of change in the 2012 number to the 2013 per pupil.  But for those that don’t want to click over I screen capped the screen that shows the percentage change between 2012 and 2013.

elementary high

 

There was some discussion about the projected population, mostly there was disagreement about the projected population of Wood Middle School for next year.   My next project will be to try to compare projected numbers for budgeting purposes and compare it with the actuals to see how accurate AUSD staff got it year by year.   I would imagine that after a few years, staff gets pretty good at predicting this sort of stuff, it would be interesting to show how close they actually get.