Monday, November 21, 2011

There is something really fishy going on here.

The five year forecast dated 5/23/2011 (the first link below) shows AUDITED revenues for 2009-10 at $74.8+ million. BUT, in a prior report dated 5/16/2011 (the second link) the AUDITED revenues number for 2009-10 is $72.1 million.


How does one gain over $2.75 million in revenue in one week in an audited school year???


http://www.mtlsd.org/district/budget/stuff/04_fiveyearforecast_2011.pdf

http://www.mtlsd.org/district/budget/stuff/final201112.pdf

11 comments:

Bill Matthews said...

Elaine,

Easy to explain. There is no quality expectation for these reports.

Also please note: Real Estate Tax and Revenue per mill is different between the reports on the "Audited 2009-2010" columns, as is the Assessed Valuation shown for "Budgeted 2010-2011".

Other Revenue lines vary, but that is by design I believe.

We all have worked with spreadsheets for so many years that we just assume all these numbers "tie" together. After all, the computer does the heavy lifting and the reports look so official.

I used to fret about these things, now I just think of it this way:

Shoes required --- tying optional.

Lebo Citizens said...

Another reason to bring back the audit and finance committee. But I am just beating my head against the wall. We keep re-electing them.
Elaine

Anonymous said...

Bill, I agree with your observations, but how does the board make intelligent, informed decisions on expenditures, budget cuts, millage etc. if there is no accuracy in the reports they are reading?

Dick Saunders

Anonymous said...

So I'm guessing by 21st century education standards 2+2=4.
Unless of course, it is next week and 2+2=5.
Either way the student passes.

Giffen Good

John Ewing said...

Posti didn't appoint an audit and finance committee because James Frasch caught Jan Klein with an extra million dollars in the teachers contract expense line last yeat. it was a big lie but the board likes lying to the public on financial statements because they can buil up the capital projects fund and overspend on the high school without explaining Their lies to the public.

Lebo Citizens said...

John, there is nothing we can do to stop them. There are no checks and balances. Jan Klein and Tim can do whatever they want and the SB just keeps on promoting their personal agendas a.k.a. lying.
Elaine

Anonymous said...

Mr. Matthews is correct when he says, "There is no quality expectation for these reports." As anyone in business knows, budgets based on projections are fantasies. The only "budgets" that matter are those based on what you have in the bank. I also agree with him about "spreadsheetitis" - a malady that afflicts all of us who play with numbers either for fun or necessity. But these reports hint at something more important than a discrepancy of a couple of million bucks.

I think it is safe to say that taxes are going to go up from all levels of government; the only questions seem to be; 1)How much?, and 2)When? Right now the fabled Mt. Lebanon "median family," with its $75,000 a year family income, and "owning" a median home assessed at $227,000, pays almost 11% of its gross income in Allegheny County, Municipal, and District real estate taxes - $8,190 to be exact, before the 2% discount - with the majority of that amount going to the Mt. Lebanon School District. The not-so-median family with an income of $50,000 a year is paying just over 16% of its gross for the same house. Total "visible" taxes paid by our "median" family (Federal, State, Mt. Lebanon EIT, and combined real estate), assuming a standard deduction and four exemptions on the Federal side, take 29.5% of its $75,000 a year gross; and the $50,000 a year family is paying 31.8% of its gross income in total taxes. These figures take into consideration that for 2011 the SSI tax was temporarily reduced - it goes up to "normal" next year.

If the Board's "projections" hold true for the next five years will the "median" family's income rise sufficiently high enough for it to pay the increased property (and other) taxes and maintain its standard of living? Certainly inflation won't stop - anyone who has gone to the grocery store on a regular basis knows this. According to the Bureau of Labor Statistics (BLS), it takes $1.04 to buy what a dollar would buy in 2010. Therefore, not only would the increase have to account for higher taxes, but the increase in the cost of living as well - and what a dollar will buy in 2016 is anyone's guess. But let's guess anyway. Taking the BLS's figures and applying a conservative 2% inflation rate per year, adjusting SSI back to its normal 7.65% for the wage-earner's "contribution," and allowing for a 25% increase in real estate taxes over the next five years (and not including reassessment in 2012!), our "median" family will require $85,500 just to tread water, financially speaking; and our not-so-median family will require $57,500 to do likewise. Frankly, I think these figures are too low.

Yes, the Mt. Lebanon School Board probably lies to the public. But worse by an order of magnitude is that they lie to themselves. I think the public is used to politicians lying on a regular basis; but elected officials do the most damage to the polity when they start believing their own fantasies - aided and abetted, I'm sorry to say, by the 63% of our registered non-voters who apparently don't give a damn.
Richard R. Gideon

Anonymous said...

Richard, absolutely agree with your comments with one exceptions. Yes, these budget forecast are at best fantasies. But is it asking too much of our administration to start these fantasies AT THE VERY LEAST with accurate numbers from an audited year?
That really shouldn't be too difficult!
You make a reference to 2016 in your comment.
Did anyone notice (and this depends on which fantasy report you believe) in the Christmas Carol graph posted on Elaine's blog, school district salaries/benefits alone meet or exceed the entire 2009-10 expenditures for the district in just 4 years.
Also, looking at the fantasy 5 year forecast report here. Debt service rises from $4 million in 2009-10 to $12 million in 2015-16!
They EXPECT salary/fringe benefits and debt service to exceed the 2009-10 TOTAL EXPENDITURES by over $12,000,000.
Those numbers don't include maintenance, utilities, supplies, transportation, books, equipment, etc. etc.
I find the five year forecast scary.

DIck Saunders

Anonymous said...

Mr. Saunders:
You are correct: If you're going to make projections they should be based on something real. And you are also correct about the five-year forecast being scary. I do wonder, however, if the Board has given any thought to the implications of their projections; if one extends their budget increases beyond 2016 the rate of increase will eventually exceed the rate of increase in taxable income for the entire Municipality! And it's the District's increase in costs vs. the increase in residents' income that is the most important factor; real estate taxes are not paid by real estate - they are paid out of income and/or profits, and only producers provide the money.

Yes, indeed - scary! But these kinds of tax increases are not sustainable; eventually something will have to give - and even our sleeping "63%" will have to wake up.
Richard Gideon

Anonymous said...

But, Richard its all for the children!
Did you notice the projections for books, equipment, supplies, maintenance & repairs and utilities? Do you want to start a poll as to where the biggest budget cuts will start?
I too agree with you... this is unsustainable.

Dick Saunders

Anonymous said...

Books are a cut because they have already been purchased from the Capital Projects Fund instead of the Operating Fund.

The Supervisors are a cut.

The HS was cut by $16,000,000.

Stay tuned!

John Ewing