BOE May Close Fiscal Year with an Operating Budget Surplus

Special education and excess cost reimbursements, as well as supplemental appropriations, may turn the Avon Board of Education’s $478,928.55 operating budget shortfall into a $793,275.38 operating budget surplus for fiscal year 2010-11, according to a June report from the school board’s business manager.

“In the short term, it doesn’t [affect Avon taxes] because we’re dealing with money that has been appropriated and voted upon by referendum for the current fiscal year, so this is using existing funds that are available,” Gary Franzi, Avon school district business manager, said. “On a go-forward basis, again, there’s no immediate impact.”

The shortfall, based on a budget reforecast in June, was “driven by special education, the outplacement tuition and transportation” expenditures, he said, as well as other “immaterial amounts” from smaller accounts.

“It’s premised on everything we have on the books at that point in time for expenditures,” Franzi said of the budget outlook for the last fiscal year.

In total, Avon received $756,836.63 in special education and excess cost reimbursements to offset the deficit, which comes from state special education grant money and Hartford Public Schools refunds for the cost of Hartford students attending Avon schools through the Project Choice program. An additional $36,438.75 in supplemental appropriations is also reflected in the $793,275.38 operating budget surplus, Franzi reported in June.

“We have received the state excess cost grant into the town district, and then we take those revenues and offset the expenditures in the operating budget, which then cause the favorability that you see,“ Franzi said.

How Will the Surplus Money Be Used?

At its June 28 meeting, the school board signed off on a plan to use $172,440 in surplus money for a teacher’s retirement incentive offer, Franzi explained. Additionally, the school board intends to use $72,000 from a federal jobs grant to help pay for the retirement incentive, which the school board approved this year.

The Avon Town Council approved the school board’s request last Thursday to appropriate $224,475 of surplus money to , set up financial system servers and pay for consulting services from Blum Shapiro, the firm that audits the town.

There was confusion at the Town Council meeting over whether the surplus money being requested to pay for Budget Sense was supposed to be set aside for special education.

“I object to taking money that was set aside for special education and spending it on software,” said Pamela Samul, town council member. “The public had a budget presented to them and they were told they would need X amount of dollars for special education and that is what they approved.”

Board of Education Chairwoman Peggy Roell explained that by offsetting the cost of special education with city of Hartford and state reimbursements, that frees up some of the operating budget funds previously used to pay for special education outplacement before the grants and refunds were made available.

"The actual amount of reimbursements are based on the actual expenditures incurred. As a result, there is a delay in the district’s receipt of these funds," Roell wrote in an e-mail to Patch.

The Board of Finance will review the proposal at its next meeting on Aug. 22.

The Cost of Outplacing Special Needs Students

The Avon school budget includes tuition and transportation costs associated with sending special needs students to schools outside of Avon like the Institute of Living in Hartford, the American School for the Deaf in West Hartford, the Wheeler Clinic and Capitol Region Education Council programs. Franzi estimated that Avon incurred about $1.6 million in outplacement expenses in fiscal year 2010-11. State special education grant money is not received right away.

Franzi and Avon Superintendent of Schools Gary Mala also stressed that the exact outplacement expenditures at the end of the fiscal year will not necessarily reflect the cost projected on the initial budget because the amount of outplaced special education students fluctuates.

"Both the total estimated cost of special education services, and the actual reimbursements (as calculated by the state department of education), are based on many different factors that are continuously changing," Roell wrote in an e-mail. "As a result, the volatility of the net cost of special education services is a reality. For example, if an involved child moves into the district in the middle of the year, the net cost of required services for that one child could easily exceed $50,000, which had not been budgeted."

A team of Avon educators works with students’ parents to determine what school and programs will best suit students’ needs, and those needs may change. Each student has an individualized learning plan, and the cost per student varies because it depends on the tuition fee of the school each student attends.

Some students attend sessions at Farmington Valley Diagnostic Center and are reintroduced into mainstream classrooms at Avon public schools. The Avon school district pays an annual membership fee to belong to the diagnostic center, Franzi said.

The term length of out-of-district special education programs for some may extend beyond the typical school year, lasting as long as 12 months, Mala explained.

“It depends on students’ needs….” Mala said. “This is one of the areas that we could face unanticipated expenses. “

State Reimbursement

Franzi said that the amount the state reimburses Avon for special education outplacement  is a “formula-driven process.” According to Mala, the state does not apply the formula until the town incurs costs “that reach four and a half times the per pupil expenditure” of educating a student in Avon.

School administrators are not “privy” to how the state determines the percentage of outplacement costs that will be subsidized, Mala said, and the school district may not find out until later in the year. The percentage that the state reimburses can also change year-to-year.

Other Surpluses

Franzi reported further surpluses in June from accounts that are “not directly related to the general fund,” including $30,073.79 in excess Pay-to-Play funds from athlete sports fees, $158,091.70 in extra revolving account money, $38,344.17 in surplus maintenance of plant account monies and $528,224 leftover in the grant fund account.

Editor's Note: School finance officials said Aug. 10 that a report with updated numbers on the financial standing of the 2010-11 budget will be presented to the Avon Board of Education at its next regular meeting on Aug. 23. The above figures are based on a financial report Franzi presented to the board at a June 28 meeting and are based on school district budget and financial records up to the end of June. The numbers may be different in the August report, depending on the records in Avon's books to date. This article was last updated at 12:13 p.m.