MVRHS adds contingency line to budget

Last-resort emergency fund will be offset by excess and deficiency money.

2
School committee member Robert Lionette says $500,000 in the contingency line is a "defensible" number based on last year's emergency spending.

The Martha’s Vineyard Regional High School (MVRHS) will add a line item in its budget to be used only for emergency spending that will be offset by existing excess and deficiency (E and D) funds. This line item, called the contingency line, will contain $500,000 taken from the existing $900,000 in excess and deficiency funds, and will be used for unanticipated expenses such as residential placements and corrective maintenance to school facilities.

“This is a contingency line item that we hope we will never have to use,” MVRHS finance manager Mark Friedman said. 

Friedman differentiated the use of excess and deficiency funds in the past from the planned method of using the contingency line for various expenses that arise.

“When we have had e and d certified in the past, whenever we used it to offset the budget, we used it right away to fund actual programs or large projects,” Friedman said. “We are hoping to leave this money untouched and roll it back over at the end of the year.”

Friedman said if the money is not used for emergency expenses, it will fall back into excess and deficiency funds as unspent appropriations, and be available the following year.

Committee member Skipper Manter advocated for creating a yearly item in the budget of $500,000 per year. “If it’s going to be that important, and we think $500,000 is a good number, I think it should be funded as a recurring item,” Manter said.

But committee member Kris O’Brien said that by definition, the contingency line is to be used for unplanned costs to the school, so it would be impossible to create a recurring item within the budget. O’Brien also noted that the budget will not be affected by the contingency line, because the line will be offset with excess and deficiency funds.

“The towns have said they don’t want us to come to them with special town meeting requests, they don’t have the palate for it,” O’Brien said. “Offsetting this line with E and D funds allows us to not have to burden taxpayers. It’s a way we can get to the E and D without having to go through the special town meeting process.”

O’Brien also said it would be specified when a contingency line item is on the school committee agenda, so the public can have input in the process. 

Committee member Janet Packer said she believes the entirety of the Excess and Deficiency line should be moved into the contingency line, and proposed a motion.

“I feel like we should have even more in that contingency line, because we have $900,000 in excess and deficiency funds; we might as well put it all in,” Packer said.

Packer’s motion to use all the E and D funds for the contingency line once that money has been certified failed.

“If we hog all the money, I don’t think it’s going to reflect well on the local level. We have spent millions of dollars of E and D over the years, a lot of it for non-emergency expenses,” Manter said. “Maybe those costs were necessary for the school, but they weren’t emergencies.”

But for actual emergency situations, committee member Amy Houghton said, the process of notifying the towns and having each town hold a special town meeting is “too cumbersome.”

“If it’s such an emergency, we don’t want to go through the 45-day notice process and town meetings to solve that problem,” Houghton said.

Committee member Robert Lionette said $500,000 is a “defensible number” based on last year’s unanticipated expenses that left the school in a tough spot.

“Last year we had two residential placements, and over $100,000 in emergency repairs. These are real numbers that we can rely on,” Lionette said.

According to Lionette, there was no year he could recall when money spent on emergencies exceeded $500,000. “I’m comfortable with that as a cap,” Lionette said. 

Lionette also mentioned the money that will be left over in the excess and deficiency account, should any further spending be necessary. “We can always have this conversation again next year. That other money will still be available to us,” Lionette said.

 

2 COMMENTS

  1. Once you put in a line item as a contingency you can bet that it will be spent or a large part will be spent. Plan your budget correctly with no contingency and stick to your budget. Emergency line items simply cover not planning properly and allows the manager to spend beyond his line items.

  2. A contingency line is actually excellent budget planning and quite “correct”, especially in an environment where there is a history of unknown expenses hitting after the budget is certified. Setting aside the infrastructure issues, the state requires certain special education requirements (e.g. “residential placements”) to be addressed, without providing a finding mechanism – an “unfunded mandate”. But the egregious mishandling of preventive maintenance expense in the past cannot be ignored, as things seem to break every year now. What is omitted from the reporting however, is how the contingency funds will get spent if needed. Who defines “emergency”, etc. There may well be a specific process, but I don’t see it described.

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