On Monday night, the Mt. Ephraim Board of Education (BOE) voted to approve its total operating budget for 2016-17 in the amount of $9,870,139. The budget did not pass the first time it was voted on.
Before the budget was brought to a vote, the meeting involved a lengthy public portion.
Following the first vote, the BOE was polled and there was additional discussion among them. When the matter was brought to a vote the second time, it passed and the budget has been submitted to the county for approval. However, there still remains a deficit of $443,552.
School Superintendent, Leslie Koller, was reached by telephone for follow-ups for clarifications. She explained banked cap, why the budget didn’t pass on the first try, and she also spoke about previous instability in the board office.
Can you please explain what the banked cap is?
LK: In 2010, the law changed to allow school districts to raise the tax levy up to 2% without voter approval. If they want to go above the 2%, they must put it out to the voters to approve. However, there is an exception and that is called using ‘banked cap.’ Banked cap is only generated in years when a school district does not increase their budget by the maximum of 2% and the balance remains available for use for up to the next three years.
In other words, if in any school year, a school district budget increases taxes by less than 2%, the difference between the percent that they have to raise taxes and the allowable 2% is “banked” and is available to be generated for future budgets for up to three years, after that it expires.
Banked cap is not money in the bank. When we use the term ‘banked cap’, people assume that it is actual money in the bank. It’s logical that they would assume that, but banked cap is actually the ability to generate money.
Here is an example: Let’s say for 2015-16, a school district’s budget raised taxes 1.5%. Since they could have gone to 2% without going out to voters, the ability to use the remaining .5% gets put aside. Not the actual .5%, but the ability to generate it. Then, say, in 2016-17 the school district’s budget requires taxes to be raised 2.25% in order to make their bills, the school district can raise taxes the allowable 2% plus another .25% because they had .5% “banked” without having to go to the voters. This would leave .25% “bank” and this .25% would remain available for use in 2017-18, 2018-19 and then it would expire.
*Note, the board passed a motion during Monday’s meeting 7-2 in favor of using the banked cap in the amount of $140,946. Voting yes were Pat Blaylock, Carl Ingram, Robbin Malinowski, Joan Greenwood, Mario Alibrando, Rocco Vespe, Lewis Greenwood, Sr. Voting no were Nick Salamone and Diane Vilardo.
The Budget Was Rejected at First.
A motion was made to adopt the tentative budget for 2016-17 and when it was first brought to a vote, it was unanimously voted down. Why?
LK: At first, we didn’t know. I asked the Board President (Pat Blaylock) to poll the Board members and it was pretty much across the board that they felt very rushed to make that decision. At the time, they also assumed that they had to make decisions right on the spot as to what cuts would be made in approving that budget. By polling them afterwards, we discovered that they actually didn’t have to make decisions as to what they would cut. They just had to make the decision on Monday night with the amount of the operating budget. So they voted again on just the operating budget and that time, it passed.
LK: The Board will make plans at a later date as to how to make up the deficit. I am going to make recommendations and have already made recommendations. I wanted to provide the Board several options and I have done that. They feel that they didn’t have time to really process them. The Board has very tough decisions to make.
When Mrs. Koller first came to the Mt. Ephraim School District:
LK: When they brought me on board, they wanted to move the district forward educationally, not only because they just wanted to make the district better, but also because of all of the new mandates that were being put upon them. They had a superintendent who had just resigned and they were with an interim. They had a lot that they wanted to accomplish and that costs money. I brought them proposals. We put together a three year plan and planned to do it in steps, which is what we did do.
Instability in the Business Office:
LK: Unfortunately, we had some instability with business administrators. We had to keep getting interim business administrators, all very qualified people, but the turnover caused instability. I think that because of that instability, mixed messages got sent and that is where the communication broke down. People were wondering why. They may not have known this was happening. I think it was due to the instability in the business office, which was just a very unfortunate situation, which they are trying very, very hard to rectify.
Corrective Action Plans
LK: At the meeting, I was asked if there were any corrective action plans. We are for participation in PARCC and also for curriculum with QSAC (The Quality Single Accountability Continuum), which is the Department of Education’s monitoring and evaluation system for public school districts.
I was also asked if there were corrective action plans for financial. At that point, Bill (Gerson) took over. He said there were four recommendations for corrective actions in our audit. They are all being rectified. They were discussed and being addressed. Those actions came about due to the instability of the business office.
*The Corrective Action Plan was previously provided by Mr. Gerson and reported on here. Below is a copy of the Corrective Action Plan:
William Gerson (finance manager and board secretary) was also asked during the meeting if there was any fraud of any unethical behavior and Mr. Gerson responded that there was not.
LK: We have two meetings scheduled in April: a work session on April 4 and an action meeting on April 11. The Board and I have not talked since Monday’s meeting, but I am going to assume that we are going to discuss the plans of how to come to that $443,552 cuts at those meetings.
On Tuesday, Principal Michael Hunter received an email from a parent saying her child had heard things that were so off the mark, but it gave him the opportunity to answer her with facts. I would encourage any parents who have any questions or whose kids come home with anything that they said they heard, I ask them to please contact me to get the facts. I would much rather be contacted than to see it on social media.
Right now, the children can’t be coming home with any facts because there has been absolutely nothing decided.
LK: The Board cares about the kids. There are ten different ways to solve every problem. Each one of the nine members of the Board has a different opinion of how they think that a problem should be solved and they vote their consciences, but always with the kids in mind. That is how they will solve this upcoming problem: by working as a group in the best interest of the kids, the teachers, and the programs that we put in place and not wanting to lose any of those. These are really, really hard decisions and the public shouldn’t take the responsibility that is on these Board members lightly. It is very, difficult for them.