In a preemptive budget letter issued by Board of Supervisors Chairman Michael Hobert last week and just hours before CCPS Superintendent Dr. Michael Murphy was scheduled to present his FY12 budget to both the School Board and the public, Hobert expressed empathy for the school system’s financial challenges – including decreased Virginia Department of Education funding associated with 10% decline in CCPS student population over the last five years, as well as unfunded education mandates stemming from the Virginia General Assembly – but also sent a clear message; No county funding increase for school operations.
Even so, in a courteous but deliberate response, both Murphy and the School Board appear to be positioning to connect the educational and human implications that continued financial conservatism is having on the school community with what some believe is a voluntary reluctance by the Supervisors to contribute funds.
As Clarke County Public Schools face yet another budget reduction, after $1.387M of previous reduction over the last three budget cycles, some school officials are questioning whether the Supervisors’ austerity plans have gone to far and why purse-strings are being held so tightly given the county’s financial resources.
“The Supervisors have money in the bank that should be used in times like these,” said one school official. “While it’s good to have contingency funds, the money was contributed by taxpayers and it seems like the amount has gotten out of proportion with respect to the overall county budget.”
According to the Clarke County Financial Report for the fiscal year ending June 30, 2010, the county had just over $14M in unrestricted net assets which “may be used to meet the County’s ongoing obligations to citizens and creditors.” The current unrestricted net asset balance is up from $8.2M as of June 30, 2005, climbing to $10.5M in 2007, $11.9M in 2008 and 13.7M in 2009. Although the unrestricted net asset categorization may sound like a source of liquid capital that could be transferred to school spending, Joint Administrative Services Director Tom Judge says that the reality is more complex.
“There are budget obligations associated with the unrestricted net asset balance,” Judge said. “Things like debt payments, cash for future capital projects, grants that the county has received but not yet spent are included in that amount.”
While the CCPS budget shrinks due to a lack of funding from both in Richmond and at home, controversy has been fueled in Clarke County over how best to use school carry-over funds as well as potential personnel cuts in school staffing levels. The potential fiscal and administrative scenario now appears to be building into a “perfect storm” for Clarke County students where declining enrollment, reallocation of existing fund balances, and increasing government mandated student programs are all combining to debilitate Clarke County’s tradition of educational stewardship.
At last week’s school budget presentation Dr. Murphy outlined requirements for an additional $519K of CCPS budget funding needed in order to maintain current education service levels. Murphy’s budget projection is comprised of $365K to cover cost increases for teachers related to the Virginia Retirement System and $154K needed for capital improvements including technology upgrades, a new school bus, asbestos abatement, painting, roofing, and other items.
The $154K is effectively the difference between last year’s capital budget and this year’s capital budget request. However, of specific interest to both Supervisors and school officials is the source of the funds necessary to meet Murphy’s $154K capital request.
School officials say that when the Supervisors agreed to increase this year’s capital budget, some believed that the funding increase was incremental and would not come at the expense of the CCPS operating budget. However, that belief was called into question with a February 7th letter from Supervisor Chairman Michael Hobert to School Board Chairman Barbara Lee.
On Friday Chairman Hobert said that his February 7th budget letter to Chairman Lee indicated in part;
“We commend you for conserving your carried over funds and request School Board consideration of applying a portion of these funds to any proposed increase to FY 12 capital expenditures.”
“This was intended to communicate a request that consideration be given by the School Board to funding its proposed increase in capital expenditures for FY 12 over FY 11 from the carried over funds in its $493,718 fund balance designated for their continued use for capital expenditures,” Hobert said.
Carry over funds, by law, return to the governing body for use in the general fund unless action is taken to allow the funds to remain with the School District. The source of the dispute between the two boards may lie in the facts that the carried over funds in question are unspent CCPS operating funds from the previous budget year.
“It does not come at the expense of the operating budget as they were not needed for the operating budget the year appropriated,” Hobert said.
The policy of both the School Board and the Board of Supervisors for many years has been to return carry over funds to the School District for use in “one-time” expenditures, typically for capital improvements. The carry-over policy stems from the county’s conservative fiscal policy intended to discourage end of fiscal year spending simply because the funds may otherwise be lost and to discourage use of one-time funding not guaranteed to be available in subsequent years for ongoing expenditures.
“There can only be a â€˜cutting’ if the School Board decides during a fiscal year that cuts are appropriate, for any number of reasons, and then the â€˜saved’ funds are carried over by our policy for use in subsequent years for one time expenditures,” Hobert said. “Approving the carryover did not result in a reduction in operating budget funds for the School Board in the following year. The budget was approved long before the carryover was formally authorized in December of 2010.”
Yet as county and school officials wrangle over how to divide a seemingly ever shrinking budget pie, Commonwealth mandated education costs continue to rise. At the CCPS budget public hearing School Board members pointed to Clarke County Public Schools’ increasing level of students requiring special education as just one example of why continued pressure to hold budget levels flat can no longer be sustained.
At the budget hearing meeting Dianne Lasky, CCPS Director of Special Education, told school board members that the growing numbers of students with diagnoses related to autism spectrum disorders, changing legislation, and increased caseloads are growing beyond her department’s ability to provide effective and efficient services.
Lasky told school board members that the CCPS special education student population has climbed from 166 students in 2006 to 194 students in 2010 and now accounts for nearly 10% of the total student population. According to Lasky, the growth in students with special needs is rising throughout the region.
“My colleagues in surrounding districts tell me that they are seeing the same increasing trends,” Lasky said.
The combination of increased student percentages in state-mandated programs, declining enrollment in mainstream student populations, and stagnant local and state budget support has lead Superintendent Murphy to explore solutions that have quickly been met with resistance by both parents and school staff.
“Our enrollment decline presents an opportunity to fund unfunded and underfunded needs and, in some cases, reduce annual recurring expenditures,” Murphy said in his recent budget presentation. “The Division can capitalize by shifting related salary costs to areas where there is an emerging or greater need.”
The definition of “greater need” will undoubtedly be the subject of continued debate, however Dr. Murphy’s preliminary suggestions include adding three Instructional Technology Resource Teachers at the elementary and secondary school levels along with an additional SPED Autism teacher while reducing eight instructional staff in other areas (two elementary teachers, two world language teachers, two instructional assistants, secondary elective staff and an ARRA funded position.)
Whether the proposed staffing cuts and other budget-forced changes to Clarke County education will be realized will likely be the subject of on-going deliberations over the coming weeks. The deadline for School Board budget presentation to the Board of Supervisor is March 1, 2011.