From Harford County government:
Today Harford County Executive David R. Craig offered his suggestions related to the Harford County Public Schools budget in an open letter to the President of the Board of Education.
The Board recently enacted budget amendments to reconcile their budget request with the federal, state, and local funds available for FY 2014. The Board made several of the amendments with very little public input or advanced notice. The changes made included altering magnet program transportation, the addition of more elementary schools to a fourth tier bus schedule, and the levying of fees to participate in extracurricular activities. These decisions have created a significant hardship for many parents and students.
After having some initially positive meetings with various board members, discussions between the two agencies had appeared to hit a stalemate. The County Executive’s offer to have his budget team look at areas where funds can be saved and to publicly embark upon a more collaborative working relationship was politely declined at this time. “In lieu of such a meeting, I am writing to you to share some of the areas which my budget team and I believe should be reviewed,” Craig stated in the letter.
Among the areas where the County Executive feels that the Board should focus is in the school system’s $13 million unassigned fund balance, as well as in the dozens of instances where line items appear to have been “overbudgeted” without a clear justification regarding the amount. The County Executive also offered recommendations for how the process can be improved upon in the future.
“I sincerely hope that we can forge a more collaborative relationship over the coming months, because our children deserve better,” Craig concluded.
A copy of the letter is available below and on the Harford County Government website:
August 12, 2013
Mrs. Nancy Reynolds
President, Harford County Board of Education
102 South Hickory Avenue
Bel Air, Maryland 21014
Dear Board President Reynolds,
Thank you for meeting and speaking with me several times over the last week with regard to the relationship between county government and the school system. Having worked with both you and the new interim superintendent for many years as teachers and school administrators, I know that we will work well together. In addition to meeting with you, I also had meetings last week with Board Members Thornton, Frisch, Fitzpatrick, and Krchnavy, and I thank them for their time.
I left our initial meetings feeling very hopeful that we could address both the short and long term issues related to the school system’s budget. Unfortunately, my offer to sit with you and school system staff in order to try to work through these issues and to publicly embark upon a more collaborative working relationship between our two agencies was politely declined at this time.
In lieu of such a meeting, I am writing to you to share some of the areas which my budget team and I believe should be reviewed. All realize that the county executive has no current legal authority to dictate how the Board of Education spends the funding which the county contributes. I strongly believe, however, that as the chief elected official with a fiduciary responsibility to all the citizens of Harford County, it is my duty to clarify these issues.
The Board recently enacted numerous budget amendments to reconcile your original budget request with the funds available to you for FY 2014. Among those amendments were several that were hastily made and which were made without sufficient public input or advance notice. Specifically I am referring to the changes in magnet program transportation, the addition of more elementary schools to a fourth tier bus schedule, and the levying of fees to participate in extracurricular activities.
These changes have a net effect of saving or providing new funds to the Board of Education of just over $1 million in the FY 2014 budget. Many citizens who have spoken to me have wondered how the school system can take such drastic steps to save a relatively small amount of money, while at the same time they have a $25 million fund balance sitting in reserve, of which $13 million is unassigned at last report (HCPS Comprehensive Annual Financial Report, FY 2012, Page 73) This raises other major issues, such as why the school system’s unassigned fund balance has grown more than 14-fold over the last decade, and why the school system needs to carry such a large fund balance at all.
If I were a parent who must make highly inconvenient and costly changes to my family’s daily schedule, I would have serious questions about the need to save $115,000 on magnet transportation, or $500,000 with a fourth tier bus schedule when there is $13 million sitting unused and unassigned in a school system account.
The school system’s fund balance is very different than county government’s. County government is a taxing and funding authority with bond and other obligations to meet. In addition, using county government’s fund balance in such a manner would be creating an expense that would recur and compound over time without an offsetting revenue source.
An outside observer could look at the amount of the Board’s fund balance and say that clearly the Board has been over-funded, since they seem to end most years with significant unused money. I know that this is not the case, however, it does beg the question as to why the school system feels it needs an unassigned fund balance at all, let alone one that is almost as large as county government’s. Furthermore, none of the other outside agencies that depend upon funding contributions from county government, such as the Sheriff’s Office and the library system, carry over substantial unassigned fund balances.
Putting aside the issue of the school system’s fund balance, there are many other areas in your budget where my budget office has indicated savings can be easily found. There are dozens of examples of line items that appear to be “overbudgeted” – that is, the amount of money budgeted far exceeds the amount spent in the recent past and with no indication as to why they have been budgeted as they have.
For example, the line item for Legal Fees under the Executive Administration Office category is budgeted for $59,000 in FY 2014, despite the fact that less than $8,000 was spent under this item in each of the two most recent fiscal years reported (Harford County Board of Education’s Proposed Budget Fiscal Year 2014, Page 130). Another example is the line item for Mileage Reimbursement of Instructional Staff under the Education Services category, where $61,951 is budgeted despite the fact that $18,051 and $13,131 were spent in fiscal years 2011 and 2012 respectively (Harford County Board of Education’s Proposed Budget Fiscal Year 2014, Page 159).
While neither one of these examples yield a large amount of funds by themselves, they are indicative of the type of overbudgeting that is rampant throughout the school system’s budget. I have addressed similar issues in my own budget in the past, which have resulted in good savings and efficient spending.
Some of the Board members with whom I have met are under the impression that it is too late to change the budget, but this is not the case. Budgets are changed frequently throughout the year in order to adjust to changing circumstances. In fact, the school system’s budget was changed several times just last year (Board of Education of Harford County, Decision on Transfers Between State Categories for the FY 2013 Budget, June 10, 2013).
In some of those conversations, the issue of budget timing came up, as Board members have asked that the process be completed earlier in order to allow more time for the Board to reconcile its budget. I am required, however, to send the proposed budget to the County Council on April 15, after the General Assembly has adopted the state budget and adjourned. The County Council is then required to pass county government’s budget by June 15.
I have always met with the superintendent and willing Board members early in the calendar year, usually in January, to discuss the school budget and to give a fairly accurate indication of the contribution we will be able to provide. This last year was no different, as the former superintendent was provided with a good indication of how much the Board would receive well before the date that my budget was submitted to the County Council.
Pursuant to my comments above, I respectfully ask that the Board of Education:
1. Reverse amendments to the FY 2014 budget related to magnet program transportation, fourth tier schedules, and payments to participate in sports and student activities. These decisions were made without public input, and were made without sufficient advance notice to allow parents and students a chance to make necessary arrangements;
2. Provide me and my office with clarification as to why the Board feels that carrying a total fund balance of $25 million and an unassigned fund balance of $13 million is necessary; and,
3. Provide me and my office with clarification as to why so many line items in the Board of Education budget are routinely overbudgeted, and in many cases are more than double what was expended in any of the prior three years.
In addition, I recommend that the Board of Education and the interim superintendent:
1. Study the transportation and pay-to-participate issues this fall, allow for a public comment period, and provide months of advance notice if indeed these changes are to be incorporated into the FY 2015 budget;
2. Establish a Board Operating Budget Subcommittee that meets regularly throughout the year to discuss budgetary matters, and which has regular contact with my budget office and the County Council;
3. Establish a Board Capital Budget Subcommittee that meets regularly throughout the year to discuss funding for capital projects, and which has regular contact with my budget office and the County Council;
4. Establish a Citizen’s Budget Advisory Committee, as county government has done, to provide transparency and to allow for citizens with expertise in budgets and finance to comment and ask questions; and,
5. Follow the example of the County Council by voting on budget amendments at a Board meeting subsequent to the one in which they are introduced.
I further recommend that the County Council consider directing the County Auditor to examine the school system’s budget in more detail than has been done in the past, and to work with the school system’s budget and financial professionals in answering whatever questions this may yield.
In conclusion, I thank each of you for your attention and for your ongoing dedication to education in Harford County. As you know, my door is always open to the Board and to representatives of the school system, and I look forward to establishing regular meetings with you all. I sincerely hope that we can forge a more collaborative relationship over the coming months, because our children deserve better.
David R. Craig
Harford County Executive
Cc: Members of the Harford County Board of Education
Members of the Harford County Council
Interim Superintendent of Schools Barbara Canavan