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Commissioners’ statement on budget

Statements issued on June 11, 2014, by the Superintendent of Schools concerned the adopted County budget for FY15 with regard to funding for education.

The statements, one sent by e-mail and one done via recorded phone messages, urged citizens to contact their Commissioners and ask for an explanation or reconsideration of the vote.

In order to respond to all such inquiries we asked the County Administrator to prepare a factual overview of the FY 15 funding for education. It is attached hereto in order to reach the broadest number of citizens.

Charles County commissioners

Reuben B. Collins II

Debra M. Davis

Bobby Rucci

The following statement clarifies the approved Charles County Fiscal Year 2015 Operating Budget and addresses concerns recently raised in statements made by the Charles County Superintendent of Schools.

Summary:

-The County budget supports the Board of Education including the opening of the new St. Charles High School, but balances available funds with other County priorities.

-The approved fiscal year 2015 budget once again funds our school system at a level greater than what is required by the State of Maryland.

-The County budget provides $7.7 million for the first year operating costs for St. Charles High School; exactly what was requested by the Board of Education.

- The approved budget directs use of Board of Education fund balance in the amount of $2.3 million toward first year St. Charles High School costs. This fund balance is an accumulation of surplus taxpayer funds left over from previous annual Board of Education budgets.

- All five members of the Charles County Board of Commissioners felt strongly about not raising tax rates in fiscal year 2015.

The Charles County Fiscal Year 2015 budget was approved on June lOth. Understandably, the Superintendent of Schools is an advocate for increased funding for our school system and we are proud of the achievements of our students and the hard work performed by teachers, administrators, and support staff. We are particularly looking forward to the new St. Charles High School being placed in service this next academic year.

The Board of County Commissioners are responsible to all citizens for resources available to a full range of services including, not only public education but, law enforcement; the emergency response system; public infrastructure such as roads, sewer,and water; community and social services; parks and recreational opportuntities; etc. The Board of Commissioners also remains keenly aware of the tax burden placed on our citizens as competing priorities are balanced.

The vote on the 2015 county budget was not unanimous. The divided vote reflects the diversity of opinion evident in our community. The economic times remain difficult. The County is encountering it’s 6th consecutive year of a declining trend in real estate values and the income tax received from the State has been less than expected. All five Commissioners felt it particularly important this year to hold the line on taxes and not raise rates that many feel are hindering economic growth, and making it difficult for others on fixed incomes to pay their bills. Consequently, additional revenue available for services and employee compensation is limited. Revenue growth projections do not support a desire to provide salary increases this year.

The County budget provides funding to the Charles County School System at what is referred to as the “maintenance of effort” level with an additional $7.7 million to operate the new St. Charles High School.

“Maintenance of effort” refers to a level of funding for the school system that is no less than the cost per student provided the previous year. In that Charles County Public Schools have realized three straight years of a declining student population, local funding will be reduced proportionately. Because the Board of Education has accumulated an ample reserve account in anticipation of the High School opening, the fiscal year 2015 budget directs use of $2.3 million for this purpose from that reserve.

A pledge to fully fund the operational cost of St. Charles High School was made and it was understood that cost would be $10 million. The Board of Education’s plan is to partially open the school with three grades using the facility the first year, and then fully open the school with four grades attending each year thereafter. The Board of Education’s budget request for the first year of operations was $7.7 million and this budget provides exactly that amount. The operating costs after the first year will be close to $10 million for a school operating at capacity and the intent is to fund it at that level when that time comes.

There has been much discussion over the possibility of using reserve accounts as a source of funding for school system and other programmatic expenses. While Charles County government has adequate reserve accounts to deal with emergencies and planned projects, using this one-time funding for recurring expenses would delay, but not solve, the structural deficit.

Unfortunately, there are limited financial resources to fully fund requests from all agencies. As we have done routinely in the past, we will closely monitor revenues and expenses throughout the new year and are willing to make budget adjustments as the financial situation matures.

Backlash against the Charles County commissioners’ approved $354.5 million fiscal 2015 budget has been swift and stark from local teachers and police outraged that the board did not include pay increases in its spending plan, despite a proposal that would have done so without raising taxes.

Passed on Tuesday evening on a 3-2 vote, the budget keeps the county’s property tax rate at $1.141 per $100 of assessed value and includes 1.8 and 2.1 percent funding increases for the school system and the Charles County Sheriff’s Office, respectively, but neither covers the departments’ requested pay increases.

Board President Candice Quinn Kelly (D) and Commissioner Ken Robinson (D) both voted against the budget — a 4.6 increase on the county’s current $339 million spending plan — citing their preference for a plan proposed by Kelly that would have provided pay raises to teachers, police, correctional officers and county staff and funded them without increasing taxes.

In a Wednesday robocall that went out to more than 16,500 parents, Charles County School Superintendent Kimberly A. Hill said the budget “does not adequately fund the needs of our students or the opening of our new [St. Charles] high school.”

Hill said the budget only provides $2.9 million to open the high school, despite promises since 2008 that the county would provide $10 million.

“This lack of funding forces us to consider cuts to programs that may impact your child,” Hill said in the call.

A transcript of the call was later emailed to everyone on the school system’s mailing list, spokeswoman Katie O’Malley Simpson said.

The county issued a response Thursday signed by board Vice President Reuben B. Collins II (D) and Commissioners Debra M. Davis (D) and Bobby Rucci (D), who voted in favor of the budget, stating that it allocates $7.7 million to the first-year operating costs of the school, “exactly what was requested by the Board of Education.”

County budget staff have reasoned that $7.7 million makes sense because senior students will not attend the school in its first year.

The Charles County Board of Education delayed adjourning its Tuesday meeting until after the commissioners had made their decision.

“I have never publicly chastised our public officials but I am today,” board Chairwoman Roberta S. Wise said. “We have jumped through hoops. We have bent over backwards and done everything they asked us to do. ... I am ashamed of our county officials.”

Meanwhile, the county’s sheriff’s deputies — who feel the lack of a pay increase violates their employment contracts — are considering possible legal action against the commissioners.

“That’s a possibility,” Charles County Fraternal Order of Police President Sgt. John Elliott said, adding that the FOP’s official response still needed to be decided by the full membership. “We’re not going to just roll over and let it go because the county code is pretty cut and dry.”

Elliott called it “unfortunate” that the commissioners did not fund pay raises for county police, correctional officers and teachers.

“That’s two things they’ve always been proud of and boasted about around election time is teachers and public safety,” he said. “They had a plan that was given by the other two commissioners that was not going to [raise taxes], and they just weren’t willing to listen. So, it is what it is, and maybe we can make some changes in this election.”

Charles County Sheriff Rex Coffey (D) said his department will require a minimum of 25 new officers in fiscal 2016 given the county’s population growth and said he worries that such a request may delay a pay increase for deputies another year.

“I’m disappointed, especially for the school system, and we all understand there’s only so much money, but Commissioner Kelly said she had a plan that would work it out,” Coffey said. “We absolutely have to have 25 officers next year. We’ve driven the crime down, but our calls for service are going up, and it absolutely makes a difference.”

Throughout the budget process, and again during the commissioners’ Tuesday meeting, Fiscal and Administrative Services Director Dave Eicholtz cautioned the commissioners against using one-time revenue sources to fund recurring costs like pay increases.

But Kelly’s plan resembled the one fiscal staff ultimately came up with to balance the county’s $10.2 million baseline deficit, except for a couple of key components; whereas the staff plan and approved budget removed one step salary increase for sheriff’s officers for a $300,000 savings and required the school boardto use $2.3 million of its own fund balance to help pay for the first-year costs of the high school, Kelly recommended taking $4 million from the cable fund to create a $3.2 million surplus, which would be used to fund two step increases for officers and pay raises for county staff, correctional officers and civilian sheriff’s employees.

Kelly’s plan also would have given the school system $3 million from the county’s $14 million developers rights and responsibilities agreement fund to make up for the difference between the allocated $7.7 million for the high school and the $10 million that was promised. With that extra funding, the board could help fund pay increases for teachers and support staff, Kelly said.

DRRA funds are generally earmarked for future school construction costs.

“I’m terribly disappointed. I think we had an opportunity here today to do right by our board of education [and our] teachers,” Kelly said after the budget passed. “I think we had an opportunity to really give the school system the tools it needs now that we’re opening this new school.”

The approved budget drew from a variety of sources to balance the baseline deficit, including a $3.5 million one-time recordation tax from a natural gas-fired power plant being built in Waldorf, $2.75 million from the county’s contingency reserves and the $2.3 million in board of education fund balance.

Using the one-time funding sources means the county’s fiscal 2016 budget will begin with a projected $3.6 million baseline deficit. Kelly’s plan would have increased that shortfall to more than $10 million.

Commissioner Bobby Rucci (D) said Tuesday it would be “irresponsible” to vote for a plan that paid for salary increases with one-time costs, thus adding to an fiscal 2016 deficit. Board Vice President Reuben B. Collins II (D) echoed Rucci’s concerns, stating the alternative preferred by Kelly and Robinson “would put us in a significant hole” in the fiscal 2016 budget.

Kelly said Thursday that the cable fund is a recurring revenue source, and every year it receives between $4 million and $5 million from Comcast and Verizon as part of the county’s franchise agreements with the two companies.

In a Facebook post responding to Hill’s robocall, Rucci wrote he was “disheartened that [Hill] would resort to robo calling parents with misleading information the day before early voting. This is not only politically motivated it is downright mean spirited to use scare tactics on our citizens.”

He also wrote that the school system “was funded the entire amount they requested to open the new high school.”

Collins said he expected some backlash, but “What I didn’t foresee was a direct robocall and emails from the superintendent. I think that’s really unprecedented.”

“That’s in their planning for the opening of the high school, the $7.7 [million]. There was a recognition from them that that’s what they would need for the opening of the school year,” Collins said. “I think the key is obviously presenting the public with facts. You can certainly surmise that the timing of all of this was to create some impact on the election, but I also believe that when people are presented with facts, then they look at things more objectively.”

Robinson called the shortfall that would have been created by Kelly’s plan “definitely manageable,” citing that it mirrored the same deficit the board balanced for fiscal 2015.

“It didn’t have to be all or nothing. It would have been a place to begin the discussion, but it was very clear that my three colleagues were pretty much set on what they were going to do before the meeting began,” he said.

Robinson said he “suspected” there would some outrage over the budget, but “in my wildest dreams never imagined it would be as intense as its been in the last 24 hours.

“I can tell you that in the last day, and I’ve lost count, that I’ve received several hundred emails of support because I did not vote to support that budget.”

The commissioners also voted to cut funding in the capital budget for the cross-county connector project in half, from $1 million to $500,000. The Indian Head Science and Technology Park will be purchased for $6.4 million using $2.7 million in capital budget surplus and $3.7 million in surplus from the county’s cable fund.

Commissioner Debra M. Davis, who also voted in support of the budget, did not return a message seeking comment.

Staff writer Gretchen Phillips contributed to this report.

jnewman@somdnews.com