Com­mis­sion­ers, Couch dis­cuss school fund­ing

Kent County News - - NEWS - By DANIEL DIVILIO ddivilio@thekent­coun­tynews.com

CH­ESTER­TOWN — While ques­tion­ing Su­per­in­ten­dent Karen Couch on school fi­nances, the Kent County Com­mis­sion­ers pledged last week to keep the dis­trict sol­vent as is through next year.

The com­mis­sion­ers hosted Couch and the Kent County Board of Ed­u­ca­tion at a joint meet­ing Tues­day, Oct. 18. The dis­cus­sion focused on what the dis­trict needs for fund­ing in the next fis­cal year and how much money it has in re­serve.

State law re­quires coun­ties to fund their cor­re­spond­ing school dis­tricts at the same per-pupil rate as the pre­vi­ous year. The reg­u­la­tion, called “main­te­nance of ef­fort,” is known for mak­ing coun­ties wary of pro­vid­ing dis­tricts with ex­tra fund­ing in a given year be­cause it would in­crease the an­nual re­quire­ment.

Last Fe­bru­ary, the Board of Ed­u­ca­tion voted to close two of the dis­trict’s five ele­men­tary schools in an ef­fort to cut costs. About a week later, amid pub­lic up­roar over the planned clos­ings, the com­mis­sion­ers of­fered to go more than $1.5 mil­lion above MOE to pre­serve the schools and to in­crease teacher salaries.

Con­cerns over the dis­trict’s fund bal­ance later led the com­mis­sion­ers to with­draw their promised MOE in­crease, leav­ing Couch and school board mem­bers fac­ing a bud­get deficit go­ing into the next fis­cal year, which be­gins July 1, 2017.

“Ad­di­tional fund­ing re­duc­tions has the po­ten­tial for neg­a­tively af­fect­ing the progress we made in the last three years,” Board of Ed­u­ca­tion Pres­i­dent Jeff Reed told the com­mis­sion­ers Oct. 18.

Wil­liam Pick­rum, pres­i­dent of the com­mis­sion­ers, said the school board needs to come up with a multi-year plan.

Reed said the school board came up with a plan when mem­bers agreed to con­sol­i­date five ele­men­tary schools to three. He said it was dis­cour­ag­ing to go through the process only to have the com­mis­sion­ers of­fer ad­di­tional fund­ing after the fact.

If the school board looks at con­sol­i­da­tion again, will the com­mis­sion­ers sup­port the board’s de­ci­sion, Reed asked, or will fund­ing come avail­able at the last minute?

“Be­cause you know as well as I do that when you dan­gle that cheese, that puts us in a very bad predica­ment be­cause what are we go­ing to say, that we’re not go­ing to take it?,” Reed said, not­ing that he voted last March against shelv­ing the con­sol­i­da­tion plan in fa­vor of ac­cept­ing ad­di­tional county money.

Com­mis­sioner Ron Fithian said the county is fourth in the state for per-pupil fund­ing. The com­mis­sion­ers also have pro­vided ad­di­tional funds in re­cent years for one-time costs that are not fac­tored into MOE.

“In the last three years, we have funded a mil­lion dol­lars above main­te­nance of ef­fort,” Fithian said. “Now, we’re still not solv­ing the prob­lem of the de­clin­ing en­roll­ment and how much, how far do we con­tinue to go.”

Be­cause MOE is based on a per-pupil rate, the to­tal amount of money the county is re­quired to spend on schools de­creases when the stu­dent pop­u­la­tion drops. Kent County Pub­lic Schools has seen en­roll­ment drop an­nu­ally for a num­ber of years.

Couch said this year, as of Sept. 30, the dis­trict was down 14 stu­dents. She said just by rolling stu­dents up a grade each year, the dis­trict could see a loss of another 39 stu­dents next year and 48 stu­dents the fol­low­ing year.

Fithian said he would not apol­o­gize for hold­ing the schools to­gether for a cou­ple more years and sav­ing jobs. He said he thought the county had the rev­enue to en­sure the dis­trict would be whole, as is, for the cur­rent fis­cal year and for next year.

“I was never un­der the im­pres­sion we bought a cou­ple of years. I think we solved it for one year, with the idea that we were go­ing to have to come back and fig­ure out, you know, what needs to hap­pen,” Couch said.

The con­sol­i­da­tion time­line is cur­rently slated to be­gin again Jan. 9, with Couch is­su­ing a rec­om­men­da­tion on any school clos­ings to the Board of Ed­u­ca­tion.

Com­mis­sioner Bill Short, who made the mo­tion in the unan­i­mous vote Feb. 23 for the county to in­crease MOE by more than $1.5 mil­lion, said he thought the school board made the right de­ci­sion when mem­bers first voted to close schools. He said then “things got a lit­tle out of sorts.”

In the months fol­low­ing the Feb. 23 vote, the com­mis­sion­ers be­came con­cerned with the size of the dis­trict’s fund bal­ance. This led them to not in­crease MOE after all.

That de­ci­sion was made after the state­man­dated April 30 dead­line to sub­mit a con­sol­i­da­tion plan, which the dis­trict had not done be­cause of the Feb. 23 vote to in- crease MOE, and after ad­min­is­tra­tors had al­ready ne­go­ti­ated teacher pay raises that con­sti­tuted about half the ad­di­tional fund­ing ex­pected from the county.

To make up the $1.5 mil­lion, Couch said the dis­trict used $1.2 mil­lion from its fund bal­ance and $300,000 in ad­di­tional state money, nei­ther of which are re­cur­ring rev­enue sources for next year.

Reed and Couch also spoke about the im­por­tance of main­tain­ing com­pet­i­tive salaries for teach­ers to at­tract and re­tain top tal­ent. Couch said KCPS is one of the county’s eco­nomic de­vel­op­ment driv­ers and a large em­ployer.

“We’re not go­ing to have the abil­ity to bring in good peo­ple if we’re not com­pet­i­tive,” Couch said.

Add the fi­nan­cial hit of the en­roll­ment de­cline and ad­di­tional money for salary in­creases and im­prove­ments to the $1.5 mil­lion, and Couch ex­pects a $2 mil­lion short­fall next year.

The com­mis­sion­ers ques­tioned Couch on the dis­trict’s ex­pected fund bal­ance at the end of this year.

Pat Mer­ritt, the county’s chief fi­nan­cial of­fi­cer, said she looked at the num­bers avail­able on the KCPS web­site and ex­pects the dis­trict to end the cur­rent fis­cal year with a fund bal­ance of $2.8 mil­lion, an amount Couch dis­puted.

Couch asked if the com­mis­sion­ers thought the dis­trict should main­tain any fund bal­ance, not­ing that the dis­trict had $130,000 in un­ex­pected costs in the last three months.

County Ad­min­is­tra­tor Shel­ley Heller asked what Couch thought the dis­trict needs in re­serve.

Couch said gen­er­ally ac­cepted ac­count­ing prin­ci­ples call for main­tain­ing two months of op­er­at­ing ex­penses in re­serve, which would be $2 mil­lion for KCPS. She said the dis­trict should main­tain $500,000 at a min­i­mum.

“That sounds like a great num­ber to me,” Fithian said of the lat­ter fig­ure. “I’ve al­ways looked at the county as your fund bal­ance.”

Short said the school board mem­bers need to do what they need to do and not wait for the county to say, “We’ll make you sol­vent.” He said if the dis­trict con­tin­ues to main­tain the cur­rent num­ber of schools, he would not sup­port an MOE in­crease.

“You are not go­ing to go broke. We’re not go­ing to al­low that,” Pick­rum told Couch and the school board.

PHOTO BY DANIEL DIVILIO

Kent County Board of Ed­u­ca­tion Pres­i­dent Jeff Reed speaks to the Kent County Com­mis­sion­ers Oct. 18 about fund­ing needs, as Su­per­in­ten­dent Karen Couch looks on.

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