The budgeting process has begun with a new wrinkle for the aging Martha’s Vineyard Regional High School’s (MVRHS) 2020–2021 fiscal year, which began July 1.
The budget subcommittee, led by chairman Kris O’Brien of Oak Bluffs, has begun to identify capital projects and expenses ($300,000 to date), and designated them as capital budget line items.
Historically, the school has included many infrastructure repairs and upgrades with long-term benefits in the fiscal year operating budget, but the aging building now requires more frequent and more expensive repairs, straining the school’s ability to provide its educational services at low, single-digit annual increases, subcommittee members say.
MVRHS budgets must be approved by Island towns. The operating budget requires approval of four of the six towns. Capital budgets can require approval from all six towns, for example, if floating debt bonds is necessary. MVRHS has virtually no debt on its books.
Budget subcommittee member Skipper Manter of West Tisbury, a noted fiscal conservative, agreed with the shift. “Capital expenses have lived in the operating budget, and we have to be transparent. So let’s spell it out that we are asking for a 2.5 percent increase — or whatever number we recommend — and we also have this or that amount in capital expenses,” he said.
MVRHS finance manager Mark Friedman said, “Other school districts don’t put capital expense in their operating budgets. Many schools borrow money when they get to a place with expensive projects, and put loan-repayment costs in the operating budget. The way we budget for capital now [in operating budgets], we add to the per-pupil costs, and we’re now facing six- or seven-figure projects. We can’t continue to fund capital in the operating budget,” he said.
In answer to a question from Oak Bluffs finance committee member Greg Thornton, Friedman said inclusion of capital expense in operating budgets has been part of the reason MVRHS ranks third in the state in cost per pupil per year, at $29,000 per student.
“Normal rate of obsolescence plays a big part. From an accounting perspective, we drop $600,000 a year in depreciation,” Friedman said. “We now have $11 million in asset value for our high school, about 10 percent of the value of high schools being built in other communities.”
MVRHS Principal Sara Dingledy, noting that the budget includes the effect of 2.6 full-time employee (FTE) staff reductions, said, “It comes down to FT reductions; that’s where savings in payroll and insurance are. We were planning for one full-time reduction already, and have rearranged things to cover the additional losses.”
On the revenue side, the school is also projecting a lower workman’s compensation rate for the second year, about $90,000, from a safe work environment.
The budget team will be back at it next at 8 am on Oct. 24 in the high school library meeting room.