District unveils plans to spend windfall

| 30 Sep 2011 | 09:48

    Newly reported surplus funds raise questions, concerns, By Fran Hardy The good news The Sparta Board of Education will use surplus funds to eliminate co-curricular activity fees for high school students next year, add more bus routes to stagger the high school and middle school starting times, and implement a $1.3 million technology infrastructure upgrade for all the schools. The bad news This newly discovered surplus comes as a surprise to many people, such as board members who were involved in preparing this year’s budget, the Sparta Education Association, whose members took wage freezes and lost numerous colleagues to layoffs, and especially to parents who paid $325 last year per high school student to play a sport, $200 to be in a play, and $428 for children to ride the bus if they live within two miles of the schools. The background After two years of budget failures, budget cuts and belt tightening, finding extra money to make improvements for next year and lessen the burden for parents will be viewed as a blessing by some. But it will also be viewed with disdain by others who struggled to make ends meet last year and had to do more with less after budget cuts virtually dismantled the school district. It also raises many questions as to why these funds were not discovered until the end of the fiscal year. Prior to the school election in April, the board knew there would be some surplus from the unemployment compensation fund because many of the teachers laid off last year found other jobs. This expected surplus was reported as part of the board’s budget presentations. But last week during their operations committee meeting, the board was informed of additional surplus funds that were recently discovered. Some of the funds had to be used as part of the 2010-2011 budget, and other funds will be used for 2011-2012. Several improvements can now be funded for the next school year and the board is moving forward to fill the 12 staff positions they announced as part of their budget presentations. No more activity fees The board budgeted $195,000 to be collected from families during 2011-2012 to supplement the board’s obligation of around $750,000 to cover the cost of co-curricular activities. At its meeting last week, the board announced that funds were available to cover the full cost of athletics and co-curricular activities and high school students would not have to “pay to play” as they did last year. Staggered start times One of the biggest complaints the board received this year involved problems caused by starting the middle and high schools at the same time to save money on additional bus routes. This created many morning traffic problems on Rt. 517 and upset parents that their middle school students were arriving at school extra early with a lot of down time before school started. Funds are now available to add some bus routes so that the two schools can begin and end at different times. This also means the other schools’ start and end times will be altered. Letters will go out to parents soon to inform them of the changes. Sparta High School will start at 7:15 a.m. and end at 2:10 p.m. Sparta Middle School will start at 8:25 a.m. and end at 3:20 p.m. The Alpine School will start at 7:50 a.m. and end at 2:35 p.m. The Helen Morgan School will start at 8:50 a.m. and end at 3:35 p.m. Technology upgrades The board voted last week to spend approximately $1.3 million to refurbish the aging technology infrastructure in three of the schools and complete new and existing systems at the high school, including additional software to support curriculum. Officials said many of these upgrades are long overdue and are necessary to keep tools for teachers and students up to date. What is the source of the surplus? Business Administrator Dr. Warren Ceurvels explained the surplus in the following way: Last year (2010-2011) after the budget defeat and the Township Council cut $600,000, BOE had a $1.2 million obligation to cover state mandated unemployment compensation. By the third quarter of this year (January through March), Ceurvels projected there would be $750,000 in unspent funds left over from the $1.2 million budgeted. Prior to the election in April, Ceurvels reported the unspent funds would be only $600,000. He said last week, “This number fluctuates. It’s not set in stone.” The Rate Stabilization Reserve is the pre-determined rate paid to the insurance carrier each month. When claims are lower, premiums go down, but when claims are higher than premiums collected, the district is hit with a huge bill at the end of the year. Ceurvels said $626,000 was budgeted to offset any potential overages in insurance claims. When reviewing the district’s performance data with health insurance consultants on June 13, it was discovered they would not need to spend the additional $626,000 budgeted. The $750,000 plus $626,000 equals the $1.3 million that was spent on technology upgrades last week. Since the funds were part of the 2010-2011 budget, they had to be spent before June 30, or they would roll over until 2012-2013. In February, the board was told by its health insurance brokers to anticipate an 18 percent increase in premiums for 2011-2012 and the budget for next year was prepared with that rate of increase. But the premiums came in at only a 16 percent increase, which resulted in a savings of $620,000. $195,000 was budgeted to be collected from families to cover a portion of the co-curricular and athletic fees, but this has now been taken out of the $620,000 surplus to cover activity fees. $368,000 of the $620,000 was used to offset part of the $568,000 cut by the township council. The remainder of the $568,000 council cut was reached by using $200,000 from the substitute teachers account. There is still a surplus of $1.5 million which will be rolled over into 2012-2013. Ceurvels said this is a result of unspent funds in many different line items that added up to this number. Ceurvels said he believes in budgeting for the “worst case scenario.” He said, “Then if funds are unused, they can be funneled back into the system to cover other expenses and ultimately the funds go back to the taxpayers in reduced expenses or less taxes.” SEA response Sparta Education Association president Susan Sawey reacted to the news of the surplus and the technology spending with equal measures of surprise and polite indignation. During public participation at last week’s meeting, she said, “I have a fiduciary responsibility to my membership to explain to them where this money came from. They will want to know why we, in good faith, took a pay freeze and we now have an extra $1.3 million for technology? Nothing spent on curriculum or teachers?” Sawey added, “This miraculous discovery does not bode well for transparency.” The BOE response Board president Keith Smith said board members always find it difficult making large spending decisions with taxpayer dollars, but that last week’s investment in the district’s technology infrastructure “will reap long term benefits for both students and teachers by providing the tools they need to be successful in the classroom.” However, Smith said, in terms of the unexpected surplus, “Our administrators will be working on this to find answers.” Superintendent Dr. Thomas Morton’s response “Recently, a lot of budget questions came up and some things came to light. On the one hand, we now have extra funds to do some good things for our students and alleviate some problems we had last year. On the other hand, I am looking into why this money just became available at the end of the year.” Former BOE President Jennifer Dericks’ response During public participation at last week’s meeting, Dericks said, “Imagine my surprise at hearing these numbers, having been involved in this process from the beginning.” Dericks said she is upset that these funds were just recently discovered, and more upset that there were any surplus funds at all, other than the $600,000 unused unemployment compensation. Dericks disagrees with Ceurvels’ interpretation of the facts.

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