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School Officials Claim Selectmen Underfunded Budget
Just days before a state takeover of the school district on December 1, Dighton-Rehoboth School Committee members are claiming the Rehoboth Board of Selectmen and Finance Committee underfunded the 2020 school budget.
In a November 18 letter to the state’s Department of Elementary and Secondary Education (DESE), committee chairperson Katherine Cooper said the district was working with a .66 percent increase. “The Board of Selectmen and Finance Committee are not being realistic to attempt to force the School Committee's acceptance of a negative one percent budget and $690,000 in cuts from the current 1/12 budget,” Cooper wrote.
Cooper said the original request was a 2.32 percent increase. The district reduced their request from $577,000 over the prior fiscal year's budget to $289,000 over. “We felt we had produced a reasonable budget at 2.32 percent considering the sports, activities, and contract increases caused a $1.2 million increase,” Cooper continued. The letter was signed by every school committee member except for George Solas and Richard Barrett, both from Rehoboth.
Rehoboth town officials are crying foul at the school committee’s charges. “The school committee letter demonstrates a lack of understanding of the Town Meeting process, a disregard of the facts, and a total lack of respect for the voice of the voters,” Schwall said via e-mail. In his letter to DESE, Schwall cited “the ever-increasing and unsustainable financial demands” from the school district.”
Voters rejected the FY20 budget at the October 29 town meeting and the district-wide meeting scheduled for November 2 was cancelled due to an incorrect budget figure on the warrant.
In a November 4 letter to School Superintendent Anthony Azar, Cooper, Rehoboth Selectmen Chairman Gerry Schwall, and Dighton Selectmen Chairman Kenneth Pacheco, DESE’s Associate Commissioner Jay Sullivan said if a budget is not accepted before December 1, DESE “shall establish a budget for the year and shall assume fiscal oversight of the district.”
Finance committee chairman Michael Deignan believes Cooper is misinformed about the budget process. Deignan explained the town does not pay for the budget, but an assessment, which is the portion of the expenses attributed to the town. “Their latest assessment of September 2019 represents a year over year increase of 7.81 percent, which, if approved by DESE, would leave the town a scant $75,000 from its additional revenue in FY20 with which to pay for increases in all the other services the town provides to its 12,000 residents,” Deignan said. “This disparity is a direct result of the financial mismanagement of the district by the administration and the School Committee, as is evidenced by their anomalous use of $1.25 million of their Excess and Deficiency funds in FY19 to balance their budget.”
Deignan disputed Cooper’s claim that the school district has suffered “repeated layoffs” in the last few years, while the town of Rehoboth has emerged unscathed. Cooper told DESE that town employees had received salary increases of 20 to 30 percent in a year. “The total number of employees in the Regional School District has steadily increased year after year, increasing by 183 from 2014 to 2018,” Deignan said, adding town employees have received a maximum three percent annual increase.
In the letter to DESE, Cooper also cited the expenses incurred by the school district as a result of a civil suit filed by the Rehoboth board of selectmen, who are alleging the district violated the terms of the regional school agreement. “We would also request that you consider the impact on our legal line now that we are being sued by the Board of Selectmen,” Cooper wrote. “Our Committee does not want to have to move money from students to fund a lawsuit that we think is senseless.”
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Michael_P_Deignan
The reporter contacted me and asked for comments on specific allegations made by the Chair of the School Committee. My replies to several points did not make the editorial cut. Thus for the readers' edification, I am including them here. As always, questions regarding town finances may be directed to me via telephone or e-mail (my contact information is located in the town meeting warrant.)
Joe,
As requested comments to your highlighted text appear inline below.
On Sat, Nov 23, 2019 at 10:13 PM Joe Siegel wrote:
> Hi Michael:
>
> This is the full text of the Dighton-Rehoboth Regional School District's letter to DESE. The
> sentences in bold feature some allegations about the Rehoboth Finance Committee and the
> Board of Selectmen. I am going to write about this. I would appreciate your input, feedback,
> etc. about the contents.
(snip)
> "Our original request was a 2.32% increase. We have reduced our request from $577k over
> the prior fiscal year's budget to $289k over. We felt we had produced a reasonable budget at
> 2.32% considering the sports, activities, and contract increases caused a $1.2M increase."
As I indicated in my letter to DESE, the Town does not pay the budget of the regional school system, we pay an assessment, which is our portion of the expenses attributed to the Town. While it is commendable the regional school system budget came in under a 3% annual increase, the fact remains the assessment to the Town of Rehoboth increased initially by 10.14% (See Note 6 in Table 1 of the Finance Committee's response to DESE on Page 37.) Their latest assessment of September 2019 represents a year over year increase of 7.81%, which, if approved by DESE, would leave the town a scant $75,000 from its additional revenue in FY20 with which to pay for increases in all the other services the Town provides to its 12,000 residents.
This disparity (the difference between the assessment increase and budget increase) is a direct result of the financial mismanagement of the District by the administration and the school committee, as is evidenced by their anomalous use of $1.25 million of their Excess and Deficiency funds in FY19 to balance their budget. Please refer to the article "Why Are We Here? - The Misrepresentation of 1.32%" by Michael Fleming in your option section (7/9/2019).
>" the Board of Selectmen and Finance Committee sent out warrants against our
> recommendations."
This sounds to me as if Kathy is complaining about how the process is legally mandated to work
The Finance Committee is obligated under MGL to provide a balanced budget for Town Meeting, and Town bylaws stipulate we provide recommendations for approval/disapproval on any financial-related article, and a recommended source and amount of funding for each article.
> "This year, $500k was put into capital stabilization"
$400k, not $500k. As explained at Town meeting, the Town will soon be replacing one of its fire engines (as early as the May STM) which will cost the Town approximately $600,000. It sounds as if Ms. Cooper would have preferred we take the money we are saving to purchase that fire engine to spend on the school system, and then either not purchase a fire truck or ask the taxpayers to raise their taxes to pay for a fire truck?
> "and OPEB,"
$50k. The Town has a responsibility to fund its OPEB trust fund and address this liability. According to the actuaries, we have a $9.6 million liability. I am certain town residents are appreciative of the Town attempting to fund this liability within its regular levy limit rather than asking them to approve a capital or debt exclusion and raise their taxes to fund it. A copy of the actuarial report is floating around the internet, on RehobothTalk I believe Ms. Botts posted it (the file name is "1037_001.pdf")
> "and another $565k supported town articles and a 4.43Yo operating increase."
The year-over-year increase in the Town budget was $433k, as outlined in Table 7 of the Finance Committee letter to DESE (Page 41). This increase represented less than 30% of the additional revenue to Town will raise in FY20. The remaining 70% of additional revenue was allocated to education. I do not know where she is getting another $132k.
> "This totals over $1M for a -$l0M budget,"
The Town did not increase its budget by $1 million, the Town budget increased by $433k. Monies the Town placed into stabilization have not been spent. Town meeting may vote to appropriate those funds for any lawful purpose at a future date.
> "while recommending a $614k increase on a-44M budget with a $613k state mandated
> minimum local contribution increase."
The increase to the regional school system was over $1 million, not $614k. This was detailed in the Town meeting warrant from May (Page 27) as well as the response to DESE.
> "While we have suffered repeated layoffs, they have not, and have undergone no reductions.
> [In fact, several town employees have gotten 20-30% salary increase "adjustments" in just
> one year."
The claim the district has suffered "repeated layoffs" is a complete fallacy. The total number of employees in the Regional School District has steadily increased year after year, increasing (as published in the Town annual reports) by 183 employees from 2014 to 2018.
Can Ms. Cooper provide a list of employees who have received 20-30% salary adjustments in one year? Virtually all of our employees fall under collective bargaining agreements, which typically have an annual increase of a maximum of 3%.
Those that are not (under a union collective bargaining agreement) have employment contracts negotiated with the Board of Selectmen. Elected officials have their salaries set by a vote of residents at Town Meeting.
> "The free cash available this fall was $761k."
$766k. Important to note: "this fall". Free cash was not available at the May or July town meetings. Free cash was not certified until late September. There was no "free cash" to fund the regional school system budget (even if we wanted to) in May or July. The "compromise agreement" placed before the voters by the BOS at the October STM would have partially funded the District's assessment out of free cash (which is one reason out of many why the Finance Committee recommended disapproval -- it is poor financial policy to fund an ongoing operational expense out of one-time revenue sources.) This type of behavior is what lead to the Proposition 2 1/2 override in FY19 (using $922k in free cash to fund the District's assessment in FY18), and the District's current financial woes (their irresponsible use of $1.25m from their E&D account in FY19 to make the override "easier to swallow" by the residents.)
> "The Finance Committee underestimates the Motor Vehicle Excise taxes by $300-500k
> annually"
This is incorrect. We routinely budget MVE at 85-90% of the prior years' actual receipts. Our annual MVE receipts for FY19 was $2.25 million. For Fiscal Year 2020 we budgeted $2 million (90%). This is outlined on page 15 of the Finance Committee letter to DESE, where we explain why it is necessary to take a conservative approach to budgeting MVE receipts. This is also covered in each of our Financial Summits prior to our annual town meetings.
> "and has increased their utilities and maintenance line from FY16 $128k; FY17 $141k; FY18
> $460k; FY19 $586k; FY20 $577k; totaling -$1.1M additional funds in the last three years in this
> single line item. This is money that we feel should be supporting the education of children
> now, rather than being used in "rainy day" accounts to, we presume, attempt to fund a town
> hall without a debt exclusion.
Ms. Cooper lacks an understanding of how Town budgets work. The Town's facilities maintenance account provides for maintenance on town buildings, and also for all the utilities (heat, electric, propane/oil for generators etc.) for the town's buildings.
Any unexpended funds revert back to free cash at the end of the fiscal year (exactly the same way their unexpended funds rolls into their E&D account at the end of the fiscal year.) Unexpended funds do not transfer into a nebulous "rainy day account" for future use. Of the $586k in the facilities maintenance line in FY19, only $12k was unexpended and rolled into the $766k free cash figure of Sept. 2019.
> "The Board of Selectmen and Finance Committee are not being realistic to attempt to force
> the School Committee's acceptance of a negative 1% budget and $690k in cuts from the
> current 1/12 budget."
I believe 82% of the residents at the July 16th special town meeting felt the Board of Selectmen and the Finance Committee were more than realistic, and it is the school committee that is out of touch with the pulse of the electorate.
Tuesday, November 26, 2019 Report this