A Financial Analyst’s View of the New Rochelle School System – Part 2

Written By: Talk of the Sound News

NRbudgethistory455In Part I, I explained how I came to be involved with the New Rochelle school budget. In Part II, I explain why the school budget provided to the public makes a performance evaluation difficult.

The preliminary budget presented to the School Board and the community in early March of this year was more remarkable for what it did not contain than for what it did contain. The first section of the budget book shows 11 years of enrollment trends, 11 years of state aid, and 22 years of history showing the decline in New Rochelle property tax assessables. But there was no history for school spending beyond a single year, and without that it is impossible for the Board to gauge the long term effectiveness of the administration in spending its funds wisely. So I set off to create that history.

Unfortunately, the information was not readily available. By piecing together news articles about prior year budgets, I was able to create the chart you see above.

Over 8 years the budget was projected to be up $75 million on roughly flat enrollment. This equated to a 67% increase in the school tax rate. So while the chart shows that total spending increased by 49% since 2003, those of us who have not contested our property taxes have seen our school taxes rise by 67%. As noted in my last piece, we’ve generously funded our school system. But that leaves us back to the original question: if funding is ample, why are services being cut?

I presented my chart to the Administration and the School Board at a public hearing on March 22. In doing so, I challenged the Board to push back against wasteful spending and, if necessary, to delay the budget vote until we had a better handle on costs. My message was not well received, even as the Board, that same night, acknowledged our financial strains by announcing that the Superintendent would take a voluntary pay freeze. I knew that if I was going to make any headway on this issue then I was going to need more information. I was going to need the past budgets.

Earlier that week I had made a FOIL (Freedom of Information Law) request for the historical budgets and a few days later received the following reply:

In reply to your 3/20/2011 FOIL request, received at my office on 3/21/2011, please be advised that the information you requested is available in hard-copy format only. Final budgets for school years 2000-2001 through and including 2009-2010 comprise a total of 1,897 pages. We charge the statutory rate of $0.25 per copy, plus postage. Prepayment is required. Please submit payment in the total amount of $489.79 (1,897 copies @ $0.25 each; plus postage: $15.54), payable to the “City School District of New Rochelle”, to my attention. Upon receipt of payment, documents will be mailed to you – or you may also pick up the documents at our office.

I was shocked! So much for freedom of information. I called my wife over and read her the email. She immediately replied, “buy the budgets!”. And so I did.

In the next segment, I’ll discuss how I didn’t quite get my money’s worth and the troubling financial trends revealed in the budget history.

Adam D. Egelberg, CFA

A Financial Analyst’s View of the New Rochelle School System – Part 1

3 thoughts on “A Financial Analyst’s View of the New Rochelle School System – Part 2”

  1. This graph is very disturbing
    It’s an abomination that you were blackmailed into paying almost $500.00 for a document that is handed out freely every year. Do you think the intent was to discourage you from your analysis? I’m sure costs per student increased, but at this rate when does it become unsustainable? Eventually we won’t be able to afford the education system, then what. 22 years of declining assessables, wouldn’t that be considered a trend? So what is being done to address that from the districts standpoint? I can’t tell where the money is going when I look at the budget document that is handed out. Where is the costs incurred with universal pre-k, how much is state funded, taxpayer funded, how many kids participate, how many private daycare centers take in these kids and how much are they being payed? That’s just one scenario. How much are we paying in lawsuits and legal fees to satisfy wrongfull actions by the district? Clear the smoke and smash the mirrors.
    Can part 3 be any more enlightening?

  2. What is a typical relationship?
    Adam,

    Regarding your graph:

    Is this what a typical relation between spending, enrollment and inflation?

    What might a typical relationship between these these three elements look like?

    Is this a sustainable path?

    Thx,

  3. Thank you Adam
    It is truly amazing how our elected trustees can allow such staggering spending increases without batting an eyelash. The members of the BOE are entrusted with the responsibility of overseeing an annual budget of nearly a quarter of a billion dollars. As taxpayers and residents we should expect that hard questions are being asked. We should expect that these individuals have a grasp of how a budget works and how it is constructed. What is becoming evident is this group has no understanding of budget dynamics and simply acts as a rubber stamp for the N.R.S.D. Given that our financial challenges are likely to remain for quite some time it is imperative that the BOE be composed of people who are financially competent. Currently that is not the case and crystallizes the need to elect Bob Cox to the BOE. I thank you for taking the time and effort to do this analysis and look forward to your posts in the future.

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