Deficit Mitigation Plan Has Trimmed School System's Debt

In a fiscal poker game that had three-quarters of a million dollars on the table, school system officials went all-in with an aggressive debt mitigation plan and may end up winning.

The hand was dealt to the school system months ago and rising obligations that ran well beyond what was budgeted this year, namely magnet school tuition, built up a deficit projected to be about $750,000.

Enter the mitigation plan put in motion by Superintendent of Schools Mary Conway. A hiring freeze, and a strict spending plan were imposed and, together with some creativity, the red numbers started being reduced. This week, the school board settled on asking the Town Council for an amount not to exceed $200,000 to settle the game.

And it may likely cost $137,000 for school officials to leave the table. The request would come over the next two weeks and the money would come from a insurance premium stabilization funds currently held by the town.

The savings were 380,000 and the school board's share of that is $319,000, Director of Business and Finance Michael Purcaro said.

So how did the school system do it?

What Purcaro calls "operational efficiencies" were imposed like a new time and attendance system, an energy management system that included new lighting in buildings, and a purchasing system in which Vernon teamed up with other school districts to buy in bulk.

The purchasing consortium went after items like fuel and and "other consumables" like school supplies.

"Volume discounts with other districts leverage a much better buy for the same materials we could buy ourselves," Purcaro said.  

There was no "stockpiling of anything," he added.

The hiring freeze saved $230,156, according to a chart furnished by the school system's finance office. Two jobs not filled were a human resources specialist and a maintainer at $20,353 and $29,577, respectively.

The new lights saved $5,500.

The school system trimmed transportation costs by $117,000 as a direct result or a renegotiated contract with the bus company for "rates not seen in more than eight years," Purcaro said.

Teachers were instructed to use the copy rooms and not print classroom material from their individual printers. Color toner was prohibited.
Special education excess costs were budgeted at a state reimbursement rate of 65 percent, but the rate actually came in at 74 percent. That was a difference of $1,446,228.

The town also benefitted from the medical loss ratio, a measure put in by the federal government under the Affordable Care Act that states insurers can only make a certain amount profit off clients.

Vernon's rebate off the cap was $92,126.

Unbudgeted revenue was up $300,000 - $200,000 from Medicaid reimbursement and $100,000 from tuition to programs like agriculture education at Rockville High School.

"While not a magnet school, the program generates revenue like a magnet school," Purcaro said.

The final piece of the puzzle was "working collaboratively with the town," Purcaro said.

He added, “We are taking care of excess costs with essentially no impact on the general fund or the taxpayers."