Everything you wanted to know about E&D
(but were too busy to ask!)

  • This Saturday at Wenham Town Meeting, and next Saturday at Hamilton Town Meeting, voters will decide between two different appropriations for the schools’ FY2012 budget.
  • The schools are asking for a 0% increase to the towns from last year — a budget that is level-funded to the towns. The towns want to take $500,000 from that budget.
  • Town officials maintain that cuts can be done without cutting teachers or services to our students. How? By dipping deeply into the school’s Excess and Deficiency (E&D) fund.
  • The school committee says that isn’t wise and isn’t what the state recommends (the state recommends that schools maintain a minimum of 3% of its total budget in E&D).
  • Some background: E&D funds are the amount of cash that remains unspent by a town or school district after the end of a fiscal year. Typically, towns and school districts plan to spend some of their E&D funds in the next year and keep some as a cushion for unplanned needs (like extra snow removal).
  • Towns may also have other reserves in addition to E&D, such as stabilization funds, to improve their financial position for cash flows or bond rating issues. The HWRSD has no reserves other than its E&D fund.
  • The school committee is already planning to spend approximately $980,000 of E&D funds from this year to cover costs in FY 2012.
  • If the school district’s proposed budget is not approved by voters at town meeting, and the towns’ lower budget passes, the school district will have to decide whether to use even more E&D funds or cut services in order to balance the FY 2012 budget.
  • Spending an additional $500,000 more E&D would drop the fund to 2.4% of the district’s total budget — below state- and auditor-recommended levels.
  • But the real concern is fiscal year 2013. Spending reserves down to dangerous levels now leaves the schools with little flexibility in FY 2013, when several other sources of one-time finds will dry up simultaneously.
  • The question for voters becomes, which plan is more prudent for financial stability over the long term?
  • Let the town and school leadership know what you want for our schools. Wenham’s town meeting is first — this Saturday, May 7, 1 p.m. at Buker. Hamilton is Sat., May 14, at 9 a.m. at the high school.
  • Reminder: This is your only chance to vote for this school budget. You have to be present at town meeting to vote.

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