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Five Terms to Understand during the “Budget Season”

Budget season 2015 is underway, and you’re probably starting to hear news about the school budget –in the context of workshops, meetings, Town Meeting and even a Special Town Meeting coming up on February 9.

At first, the budget process can seem convoluted, and the terms can seem confusing. We’d like to help. Over the next few weeks, Sandwich Learns Together will be publishing several articles dedicated to explaining how budget season works in our town.

To get started, let’s take a look at a few of the most common terms used during the budget process:

  1. Capital expenditure. A capital expenditure is money invested to acquire or upgrade fixed, physical, non-consumable assets, such as buildings and equipment.

How does the term capital expenditure apply to the Sandwich School District during the 2015 budget season?

At this time, the Board of Selectman are supporting two Special Town Meeting articles to fund capital expenditures related to the closing the H.T. Wing School and the reorganization of the two remaining elementary schools (Forestdale and Oak Ridge).

    • Article One will reallocate $140,000 left over from a previous allocation (used to repair window sills at the STEM Academy)
    • Article Two will allocate $275, 000 from Free Cash –funds the town already has on-hand.  Free Cash typically includes actual receipts in excess of revenue estimates and unspent money from previous years. It is recommended that Free Cash be used for one-time capital expenses.

These two articles will be voted on at Special Town Meeting on Monday, February 9, 2015, at 7:00 pm in the Sandwich High School auditorium.

  1. Operational expenditure. An operational expenditure is money thatcovers the cost of keeping a business or organization running. Operational expenditures are what comprise an Operating Budget.

How does the term operational expenditures apply to the Sandwich School District during the 2015 budget season?

The operational expenditures in the school district’s Operating Budget pay salaries for teachers, staff and administrators. They also pay for supplies –books, technology, and materials used in teaching and learning. There are other operational expenses not as closely connected to teaching and learning; such as heating the schools, maintaining the fields, and transportation.  In Sandwich, the school district has been paying 100% of transportation expenses in the Operating Budget; many other districts charge “bus fees.”

The school budget is essentially an Operating Budget.  This budget will be voted on at the Annual Town Meeting in May.

Sometimes capital expenditures are referred to as “one-time expenses,” while operating expenditures are referred to as “recurring expenses.” Our town leaders have preferred that capital expenditures be funded and voted separately from the operating budget, allowing the funding process to be specific and most appropriate to the capital expense.

  1. Article. An articleis an item listed in the Town Meeting warrant, and it must contain a sufficient description of what is proposed to be voted upon. Every action taken at Town Meeting must be connected to some article printed in the warrant and must be within the scope of the article. The warrant is a printed booklet issued by the Board of Selectmen that is available in advance of Town Meeting and is distributed to Town Meeting so members can have all the information needed to make informed votes.
  1. Fiscal year. A fiscal year is a year as reckoned for taxing or accounting purposes.

How does the term fiscal year apply to the Sandwich School District during the 2015 budget season?

The Sandwich School District fiscal year spans from July 1 to June 30. The Operating Budget is voted at the Annual Town Meeting in May, and those funds are available on July 1st. The budget being worked on at this time is FY16 – Fiscal Year 2016, which runs from July 1, 2015-June 30, 2016. State and local funding also reflect the same fiscal year.

  1. Chapter 70 Funds. Chapter 70 education aid (commonly referred to as “Chapter 70 Funds”) is the Commonwealth’s primary program for distributing its portion of K-12 public education funding to the state’s 328 local and regional school districts. The Chapter 70 formula aims to ensure that each school district has sufficient resources to provide an adequate education for all of its students, taking into account the ability of each local government to contribute. In short, the formula is designed to have an equalizing effect, with less wealthy districts receiving more state aid than wealthier ones.  Learn more about Chapter 70 funding and how it works here.

For further information about how the Town of Sandwich works, view and download a comprehensive explanation found on the town website.  And check back for additional articles about the SPS Budget!  You can even subscribe to Sandwich Learns Together so you don’t miss any information about the Sandwich Public Schools