The huge audience at the Montclair High School auditorium for the Montclair Board of Education’s February 23 meeting – and the presence of Mayor Robert Jackson and Second Ward Councilor Robin Schlager among the audience members – constituted prima facie evidence that the attempts to finalize the master plan, which began at the Montclair Planning Board meeting over at the municipal building at the same time, had been virtually forgotten in light of the school district’s new troubles. In addition to the sudden resignation of School Superintendent Penny MacCormack (who was not present at the meeting), the board had to deal with a possible budget crisis for the 2015-16 school year, and demonstrators held up signs bearing the names of Montclair’s different schools before the meeting came to order as a means of support for them.
Chief Operating Officer Brian Fleischer laid out the bad news in a detailed presentation of the preliminary budget. He said that the basic outline is not definite, given that Governor Christie’s budget message had not yet been delivered – it was scheduled for February 24 – and thus no state aid information was forthcoming until later in the week – but he added that the consequences were dire just the same.
“The cost of what we currently have are going up by an estimated $6.6 million driven primarily by the large projected increase in costs of our employee health benefits, and we are starting off with nearly $3 million less in revenue to pay for it all,” Fleischer said to the collective drawn breath of the crowd, who had other ideas of how the money was spent. Fleischer said he needed to close a starting deficit of $10.9 million.
“The choices we will need to make will impact our taxes, our employees, our kids, our community, There’s nothing simple or easy about that, and some of the decisions we will need to make together will be heartbreaking,” Fleischer added.
Fleischer cited the fund balance, the reserve of money built up from funds left over from underspending, and how it went up after property taxes were lowered 3.6 percent in 2011. Recent spending, he explained, has driven the fund balance down to only an estimated $4.7 million for the 2014-15 school year and how recurring spending for teachers and academic programs, as well as costs for health benefits and various costs such as for energy among others, caused expenditures to exceed budgeted use of surpluses.
Fleischer added that the board switched from health benefits through Horizon Blue Cross / Blue Shield to Cigna when Horizon’s renewal proposal was an increase of 9 percent over the 2013-2014 school year’s premium costs, while Cigna’s proposal amounted to a 2 percent decrease. Even so, he said that an overall increase in the amount of medical services provided currently will lead to a health benefit cost increase for 2015-16 year, regardless of whether the district renews with Cigna. Additional costs to comply with the Affordable Care Act will need to be factored into the 2015-16 budget. Total projected increases in the cost for medical benefits are expected to be $5 million.
Fleischer said that taxes would go up $89 a year for each 1 percent increase in the tax levy, with a maximum 7.3 percent increase allowed based on the district’s banked tax levy cap adjustments, but any increase, no matter how large, would still require staffing cuts to help fill the gap. Among the options on the table are staffing reductions at the central office and at the schools, with cuts not a fixed percentage among the districts eleven schools but based on the classes offered at each school and the enrollment of students. Athletics and student activities are also options, as is farming out substitute and paraprofessional hirees to outsourcing. Salaries alone are expected to take up 63.52 percent of the 2015-16 budget.
Reaction to Fleischer’s presentation was largely disdainful. Michelle Fine of Montclair Cares About Schools offered a devastating salvo, citing the exorbitant amount of money spent on PARCC testing and legal fees incurred by Dr. MacCormack, whom Dr. Fine said left the district “holding the bag.” Residnt Lynn Fideli blasted the proposal to outsource substitutes and paraprofessionals, noting that Jersey City had tried the same thing only to find the outsourced workers unreliable and the costs skyrocketing. Several residents accused the school board of not keeping watch over Dr. MacCormack’s practices and expenditures, allowing her to spend money on “reforms,” such as a chief talent officer, that did not produce positive results, and a couple of them called for the resignation of board president David Deutsch.
Montclair Education Association President Gayl Shepard referenced the letter sent by Principal Putrino, saying that the MEA stands in solidarity with the Montclair Principals Association and quoted this statement from the letter: “We strongly feel that in this transitional time that Dr. MacCormack should not play a role in the next steps of this budget process as she now has vested interest or accountability for our budget or staffing outcomes. We ask that the board act on NJSA 18: A: 27-9, which gives the authority to the board, after a resignation is given to relieve a superintendent of all contractual responsibilities.”[Editor’s note: quote corrected/expanded from previous version]
Though Fleischer drew some criticism for allowing the budget to spin out of control on his watch, he was largely unscathed. One resident expressed confidence in him.
“You’re a good guy,” she told him.
Two public workshop meetings on the Montclair school budget are scheduled for March 2 and March 5, with tentative adoption of the budget on the latter date and official adoption at the board’s March 16 meeting. A March 23 budget workshop and a March 30 budget review by the Board of School Estimate (BoSE) follow, with the BoSE slated to adopt the budget on April 7.
The full budget presentation from Brian Fleischer to the board is on the district’s Web site as well as the slide presentation.
So let me get this straight- the Chief Operating Officer or the person responsible for the finances of the district goes unscathed when millions are unaccounted for?
I appreciate this run-down of the meeting. Thank you, Steve, for attending and writing it up!
“Additional costs to comply with the Affordable Care Act will need to be factored into the 2015-16 budget. Total projected increases in the cost for medical benefits are expected to be $5 million.”
“The government you elect is the government you deserve”
Thomas Jefferson
Now pay up and get used to it…..it’s not going to get any prettier….State cuts are coming.
I would say that Dr. MacCormack’s absence last night speaks volumes. Mr. foeisher’s presentation felt like q blame game, as though some how this mess is the fault of the teachers. There was a lot of missing numbers and no accountability for who was in charge of overseeing the exorbitant spending. He seemed genuinely pained by cuts at Central Office but ndifferent to cuts amongst staff and especially at the idea of outsourcing the Parqs, the people who work with our most vulnerable students.
I also want to add that Gapye Sheppard made t coer the MEA was standing in solidarity with the Principal’s Association in requesting Dr. MacCormack be immediately released from her duties and not be nvolved in the budget process, for which who holds no stake. No mention was made of upcoming contracts in her statement.
Last nights BOE meeting was an eye opener. Millions upon millions of dollars (11 million to be exact), were spent, but no one was aware, that spending was out of control. Administrators were hired, PR people were hired, programs were begun, all which would have an impact on Montclair’s finances. Where was the checks and balances that should have been put in place to prevent such spending. Perhaps Mr. Fleischer was unaware of such controls, since when he was hired, he wasn’t really a Business Administrator, and he lacked the proper certification. You might say he was a trainee. Just as our superintendent also lacked the proper certification when hired, she too was a trainee. Prior to coming to Montclair she had never been a superintendent, anywhere. Didn’t that montclair had a trainee program. Perhaps this is what happens when you hire top administrators who lack the proper certification and experience.
I just read the entirety of Brian Fleischer’s presentation. Interested folks can read it here:
https://www.montclair.k12.nj.us/WebPageFiles/2461/budget-15-16-150223-speech.pdf
There’s a lot of (necessary) detail there, but for me (a parent of school-age kids & a taxpayer who has no connection to anyone at the BOE, at the MEA, at the Central Office, or to any of the other interested parties to future negotiations), the takeaways are pretty clear:
1.) Health care costs are increasing at a rate that outpaces other variables.
2.) The factors that contribute to #1 are largely out of our control as a municipality.
3.) The township is unable to raise its property taxes beyond a state-mandated cap, and is thus constrained in its ability to adjust to precipitous (and valid) cost increases with proportionate increases in its tax levy. (So, just like one of the most important cost variables (health-care costs), our ability to respond on the revenue side is limited by forces beyond our control.)
4.) Mr. Fleischer seems to be an honest, capable and civically-minded COO, and if a resident / taxpayer of this township wants to understand the issues (and the numbers) involved, Mr. Fleischer has provided the tools necessary to do so.
Aspersions and finger-pointing: not helpful.
Everybody reading the report and educating him / herself: helpful.
Those are important highlights @willjames. The budget problems are driven by healthcare costs not implementing the PARCC. I disagree with MacCormack’s decision not to attend the meeting but that doesn’t mean she’s responsible for a 9 percent increase in health care premiums.
This is modern economics collapsing upon itself. WillJames makes many of the right great points but it should be prefaced with this – for what, 3 years the BOE had a surplus and they worked it off, but rather than making some unpopular cuts over that time in anticipation of a post-surplus world where they may not be able to cushion the increases enough, they did what any political animal will do these days, kept spedning and kicked the can down the road. Well we are not at the corner of the street now.
At the federal level the government can print money and run deficits. The State and town cannot. In Montclair we have a very high local tax cost and pretty average to lousy services so you would think that something is broken. But most of the people in that room on (the BOE, town government, those screaming for resignations, those supporting the BOE) are interchangeable and being on the BOE side is a no-win place. I am sure that if actual cuts were made, many slamming the BOE with their hysterics last night, would have been slamming them for cutting things at a time that they had surpluses. So if the BOE looks to cut anything, people will slam them and if they don’t cut, they are out of control spenders. Bot really how much does the consultant costs, administration bonuses and test prep mean to a $110MM budget or $10MM shortfall?
Here is what I would do – just give in and give up. Start by stripping the central admin. to the bare minimum – trust the school level folks to do their jobs like they say they can. Implement state mandates (these tests that have all up in arms) at the bare minimum we have to in order to not have the state take us over and make us East Orange. Show support for your teachers and the anti-testing crowd. It’s painfully obvious that you can’t win here by changing these things in Montclair without real support from the working groups affected (in this line, I wonder how they feel about the Spanish immersion question – the MEA that is). If things work, congratulate assessmentgate and others for being right all along and ask that they get on the school board and actually run the place – why volunteer your own time (David Deutsch and others) to be screamed at in public while the gallery erupts in applause. If the tests are, as many say, worthless, then who cares if we do lousy as a district? the top kids will still go to good schools and we live close enough to NYC to keep real estate fairly attractive. Maybe we will qualify for more state aid because we will demonstrate through results that we need the help. Tell the teachers not to bother reviewing for tests, that their jobs are safe and just let kids take them to see how we do.
Good meaning people won’t be able to change anything without buy in from the workers who will be affected – which can be teachers and other municipal workers. And if you have to claim bona fide progressive credentials to not get ridiculed here, then you really can’t and won’t act in a true adversarial way against established public workforce powers to push through changes. If 60%+ of the budget is for salaries and the vast majority is unionized then how can a $400,000 assessment cost or $50,000 (don’t know the number) move the needle in a $110MM budget? It’s just another nail in your coffin so someone can scream at you in the school auditorium, on channel 33 and on social media.
I hate to make this a liberal thing, but it’s reality – every one of those people on the BOE could be substituted for those screaming at them and while the time line may have been different (definitely no Maccormack) the budget mess would remain.
First, apologies to assessmentgate for doubting his $10mm deficit number. A lesson here for me. Second, didn’t think it was possible for asessmentgate to understate, but he did by almost a million. Wow.
Second, I’m not buying the 41 pages I just read. Yes, very informative. Thoughtful. Certainly factual as to numbers, but the characterizations are misleading, at a minimum. Less than half of the deficit is due to health costs, yet the takeaway is it is about health costs. Kudos to the MEA for getting a 2.85% annual increase contract when there is a 2% cap on the operating budget. Just a small part of our spending beyond our means.
Third, I’m paying whatever the increase is, so I reserve the right to cast aspersions and finger point. I get snarky when I’m wrong, and I tend to be cynical, but I my deficit expectation was 50% lower.
Fourth, it funny how no one asked what the future finances would look like last year and how quickly the year went by. Anybody want to ask what a 2018-19 pro forma budget could look like? No, don’t bother. The important thing is to come together and fix this year.
This deserves only post script, but “A family with a home valued at the Montclair median of $504,407 would see their school tax increase by $623 for the 2015 calendar year.”
Or $1,246 for a full year just for the school portion of the tax levy.
MHS Principal Earle had interviewed for the Super’s job in Bloomfield in 2013 and he came across as a strong candidate in the public forum. He didn’t get the job, and I have no clue about his record at MHS, but he seems like an ideal candidate for Interim Super.
Christie’s salary cap for superintendents is going to make it difficult to find someone with the kind of experience that people in Montclair will want to see after what has just transpired.
In my eyes, an experienced Business Administrator is key to getting a district with budget problems back on track. I give a lot of credit to the Bloomfield BoE for making good decisions and getting us out of a similar budget hole in 2013, but I think if you asked the Board who helped them the most in fixing the budget would all say the Interim Business Administrator James Verbist. He deserves a lot of the credit for guiding the district out of that mess. He left the district last year, I believe for retirement, but he might still be available.
Frank, what was the other half? Fleischer said that there was $3 million less in revenue to pay for it all. Is that tax revenue?
If Gayl Shepard and Michelle Fine are going to use the budget meeting as a forum for political attacks then it’s worth remembering what the MSW blog brought up last year: their disdain for the board doesn’t stop them from dipping into the pot when it suits them.
Until it was noticed last year the MEA owed the district hundreds of thousands of dollars.
https://www.northjersey.com/news/education/contract-confusion-creates-debt-1.1071100
Luckily somebody noticed and this March the balance will finally be paid off.
And Gayl Shepard didn’t (doesn’t?) mind the district paying her tens of thousands of dollars.
https://mtcschoolswatch.wordpress.com/2014/07/18/apparently-our-montclair-schools-contract-also-has-district-taxpayers-paying-for-full-time-union-president/
It seems to me they are taking advantage of the budget to pursue vendettas instead of acknowledging what’s really driving the deficit. The attacks miss the mark entirely, as @willjames and @drcolson note above, and are hypocritical to boot.
SSP,
No, it is just classified as revenue.
Actually, our prepaid card has $4.3mm less on it and the remaining $1.6mm is other increases. And of course the $5mm health care costs. When was ACA passed?
The essence of our situation is the distinction between recurring costs and reoccurring costs.
Oh tony, here’s hoping that your invocation of MSW is the last we hear of that little propaganda outfit.
Where was the school board? The superintendent reports to the board. The board provides oversight on the schools. It’s the fiduciary duty of the Board to represent the interests of the town, hold the superintendent’s organization to account, and provide good governance.
The board meets twice a month in a closed, half-hour executive session, followed by a public session. The district claims, “Board members routinely attend to subcommittee or school/community liaison or working group responsibilities.” Somehow they were blindsided by yesterday’s announcement? It seems unlikely.
Where was the Board during this? A >$10m shortfall does not emerge out of thin air. Where was their governance?
if this doesn’t move you to advocate for bigger picture ideas like single payer/socialized health care and fundamental changes to how NJ schools get funded, you’re lost…
https://news.yahoo.com/governor-abandons-single-payer-health-care-plan-225042240.html
So much mismanagement at Central Services, and I agree that starting the cuts with administration is the wisest choice. My children’s education will continue if they have good teachers and paras, and I do not believe they have benefitted from a PR spokesman or a Chief Talent Officer.
There are some curious and glaring omissions in Fleisher’s budget report. In one pie chart, over 16% is allocated to “other.” Other what? That’s a substantial amount of spending of a multi-million dollar budget that is completely unaccounted for.
Another enormous gaffe is failing to adjust insurance costs with employee contributions. By law, all MPS employees pay a percentage of their benefits, so that both the past costs and projected future costs of health care to the district are less than Fleisher claims. By millions, 2-3 million,
i believe. What the currently insured contribute more than covers the cost of insuring all the paraprofessionals, but if those numbers were reported accurately, people might agree that paying for healthcare is a more worthy expenditure than paying for fluff jobs at Central Services.
How in the world are we to trust his decisions when he shows such a lack of clarity and accuracy?
One thing that is very clear in Fleisher’s report is that we had a growing surplus, then MacCormack arrived, and two years later we are horribly in the hole. While yes, the district is hemmed in and put upon by changes in both state and federal regulations, I don’t see all other districts with financial woes like these. I would have more sympathy for those stuck facing all the new mandates and constraints if they were open, honest, and clearly competent.
Flynnie, t
That was one of the glaring omissions from Mr. Fleischer’s “transparent” report. The fact is that the MEA will be paying in at tier 4 next year and could account for $2-3million dollars. Why leave that out last night? Does that not fit the narrative?
Saying the Superintendent arrived and the surplus dried up is oversimplifying a very not-simple situation. With that reasoning once MacCormack leaves we should be back at a $2 million surplus next year and $6 million in the black by 2018. Not to mention the reductions would be easy to identify and stomach. Unfortunately for us it’s just not that easy. The new budget is calculated with a reorganized central office sans Communications Lead and without the >$100k expenditure for technology to implement PARCC. The dent that puts in the deficit can’t be seen with the naked eye and we’re not helping ourselves or our kids by letting the politics of testing or dislike of a single person color what we’re going to do with the budget.
“3.) The township is unable to raise its property taxes beyond a state-mandated cap, and is thus constrained in its ability to adjust to precipitous (and valid) cost increases with proportionate increases in its tax levy. (So, just like one of the most important cost variables (health-care costs), our ability to respond on the revenue side is limited by forces beyond our control.)”
willjames,
Aren’t healthcare costs exempt from the 2% cap?
The CFAC should do a study on how much exempt property value we have now due to PILOT that that we will aggressively grow that are not subject to the school levy? What is the future with a 2% school levy cap with tax exempt properties growing because of PILOTS?
My best guess is that the valuation of these exempt properties, including Gateway 1, is close to $200mm.
Well said Gretchen! I would add that it’s sad but not too surprising that healthcare costs shot up. I know some businesses have had a 30% increase year over year in their premiums and they’ve had to ask employees to give up even more of their salary in order to stay afloat. Should we ask schools to do the same? It looks like that – unless we want to pay more taxes. Brian ended his presentation with some personal views on a single-payer system and what a shame it is that we are forced to choose between having enough educators for our children and keeping them healthy enough to actually teach. I have to agree.
I, too, wish to see single payer healthcare, and it’s great to others voicing this publicly. This wish, however, will do no more to fix our problems than simply ignoring them or claiming that they’re complicated.
Gretchen, you oversimplify the criticism of both Fleisher and MacCormack disingenously. Here’s my issue with your statement. You write
“The dent that puts in the deficit can’t be seen with the naked eye and we’re not helping ourselves or our kids by letting the politics of testing or dislike of a single person color what we’re going to do with the budget.”
This is in no way about the politics of testing or simple dislike. The problem is that there has been a serious lack of planning, foresight, transparancy and accountability. This problem still exists because the people responsible for the problems are being allowed to try to address them without additional oversight, without any admitting of any responsibility. This is in no way a personal attack; this is criticism of a poorly done job by someone who holds a public position and who is supposed to be accountable to the public. MacCormack has resigned but she is not gone. Now that she has made it perfectly clear that she has no stake in this community, no responsibility for the outcomes of her actions, she – the one ultimately responsible for this disaster of a budget – is being allowed to continue working on it. She is being aided by a man who not only rubber-stamped her every financial decision but whose report disorts and covers up the district’s financial situation.
The problem is not, as you say, “what we’re going to do with the budget.” The problem is what THEY are going to do and how they are not being held accountable for their actions. How is giving them a pass going to help our children?
Aging-in-place is for the wealthy.
Frank Rubacky,you bring up a very good point and one that I think all of us need to focus on a bit. PILOT (payment in lieu of taxes), this program is a big hit with our town government and I am deeply concerned about it’s use. There are no simple answers but for a moment Frank brings up what we are loosing with this program. Our Mayor loves PILOT but in his explanation in the Montclair Times awhile back he tells us about it from his viewpoint and it truly makes you wonder why we have it. Well, we allow developers to pay lower taxes for a period of time. So, as Frank points, out that costs our town $$$$$$. Our schools loose money, our town, our services are underfunded, and etc. Why does this town not do studies before hand that give us a better picture of consequences? More development? What about our water situation, our infrastructure situation, our tax situation that plays out as Frank points out? What about it? Our town council and etc wanted development but are we getting real returns? Look deeper into it all and I have to say I question whether our town is getting back the “bang for the buck” It is our town. Look into these things.
Flynnie,
Could not have said it any better.
Planning and foresight seems to be this BOE’s achilles heel, even with knowledge about what employee salaries and healthcare contributions will look like 3 years down the line (where we are now). The understanding that we have a fund balance but not planning for the day in which that is no longer the case, and spending like you will continue to have that money is gross mismanagement at best.
How the BOE could want the ex?superintendent in on this process is beyond me.
Lastly, I should add, that Mr. Fleischer’s presentation was disingenuous at best: he argued that CO can’t cut any more and they’ve already cut Mr. Frankel and Ms. Russell’s positions…but, they resigned. They weren’t “cuts”. There’s a difference. Let’s not act like they are doing everyone a favor here and this was a cost-saving measure. They are getting out of dodge. There was no sacrifice made by CO. Words matter. As do one’s presentation of the facts.
In reading some of the comments, I feel there seems to be a little confusion how and why we arrived at the fund balance of $14 mil back in 2012, existence of which almost threatened the State takeover of the school system and complete cut off of State aid.
Please, read the news about what happened and what was found when Dr. Alvarez left the District in 2012, and what corrective actions needed to be taken. Then read minutes of the subsequent BOE meetings and budget discussions. History matters. None of these things happen in a vacuum.
With 2% State cap, the cuts are inevitable. Now, who is willing to put up for the benefit of our children?
Also, just a side note, I absolutely LOVE how civil and respectful this discussion is compared to what has happened on Facebook in the last week.
[prof shaking his head, adding an extra “0” to his property tax check…..]
….probably to be followed by other Montclair residents shaking their heads and putting up “For Sale” signs on their properties.
This whole thing is beyond a blindside.
How about if all property taxpayers simply refused to pay the increase associated with this tale of lunacy?
Silverleaf,
Then the schools would be screwed. Nice hypothetical you’ve got there.
i am little surprised that this deficit got “sprung” upon us even though the montlcair boe is filled with people who have worked in the financial sector. there was really no extensive planning for the future as anyone with a brain knows healthcare costs usually go up 7-10% a year. we can sit here and complain about the whole thing or figure out a way to get out of it that doesn’t involve a 7% tax levy. i suggest the town strategically buys power-ball tickets.
Screwed you say? I don’t think so. Tell me, how would the schools be screwed? A little pain maybe, but not entirely screwed as you say. Are you suggesting they would all close down? These geniuses got us into this mess, let them figure a way out of it without impacting our pocketbooks. How much blood do they want to get from a stone? Where is the accountability? Throw them all in jail for malfeasance.
Re the discussion on PILOTS and 2.5% cap – Isn’t the 2.5% cap on the tax LEVY and not on the tax RATE? If that is actually the case, then the PILOTS themselves are not cheating the schools out of additional revenue, they are just affecting who is paying the bill – i.e. the residential homeowners are paying more than their fair share of it.
This fiscal situation is just a déjà vu and illustrates the underlying issues we have with our BOE and town governance structure. It happened before in the opposite direction. Under then BOE president Shelly Lombard, the Superintendent and business officer were not owning up to what was really going on and what we were really spending. So the system first announced in I believe 2010, after feedback from the business officer then Dana Sullivan, that we likely were going to have a significant shortfall in next the budget cycle. Everyone then went scrambling, trying to potentially avoid closing one or two schools being threatened (incredibly having just bonded and spent $35 million building a new one). However, when the fiscal picture and revenue began shifting mid-year, with either more savings from retirements or just more gov’t revenues, the BOE staff did not communicate this to the Board. Ergo instead of having to close schools next cycle, there was ultimately first a 7, then a 9 and, then like an 11 or 13 million dollar surplus built up over the next three cycles. That means we overtaxed residents for the monies actually needed to operate our BOE budgets in those years. Now, today, here we go again. There’s a shifting fiscal picture going on but it’s in the other direction. Supposedly, this is largely due unexpected health care increases, but it could also be from other more controversial or unknown programmatic expenditures (TBD per Gail Sheppard’s public questioning). Somehow again, the Board was still not timely informed, or did not know the true fiscal picture coming to possibly start making budget adjustments even last year(fall). Now, we are facing a potential $10 million dollar deficit. If you know you’re looking at a big shortfall coming, you start to reduce your spending or try to save more as soon as possible in a public setting to avoid a large tax hike later. You don’t continue to spend at the same rate as we did if possible. So, some of this debacle is likely due to actual unknown moving part variables as claimed, but some still has to be from the on-going culture of inadequate communication from BOE staff, or conversely, poor oversight supervision of that staff/superintendent actions by our Boards. We do not fully oversee our system in a way that works for this community because we continue to end up in these situations on the business side. Nonetheless, dealing with the results of a $10 million deficit, or a $ 13 million dollar surplus is just one of the issues. Not knowing these were coming and our Boards and staff being so out of synch and out of control — making the public go wild from instability — is the real long-term governing and management concern.
Those are fair points, Flynnie. I wanted to highlight that the departure of two individuals isn’t going to relieve financial pressure on the district because it’s a structural problem. Dr. Fine painted testing preparations as a major driver of the budget deficit which isn’t accurate and inserts politics into an accounting problem.
Reading through the budget there aren’t easy items to remove which would significantly move the needle. The biggest sting isn’t because of what is or isn’t included in the budget, it’s the surprise. Class size reductions, laptop purchases, roofing, HVAC improvements are expensive and the report notes that even with the $2m capital reserve expenditure, there were no bond ordinances issued.
If you take away the capital expenditure, add the bond ordinance and don’t have the huge jump in healthcare costs then we’re almost at solvency. What would the the response to another ordinance when the district has a comfortable reserve?
As State contributions have declined, our school tax levy has gone from 70% of the school budget in 1986 to 92% in FY 2013. It dropped back a few points over the last couple of years due to spending the surplus, but the trend is back on track to go even higher. In essence, our school tax levy will determine what our school system can afford going forward.
We have a cap on the tex levy.
The Town is counting on the district to cover a higher share of its capital costs going forward and the district’s spending on technology will become a recurring cost as technology typically has a 5 year period of usefulness.
The town’s strategy for increasing ratables is through redevelopment zones that utilize property tax exemptions. The township’s largest taxpayer(s) is the Lackawanna Redevelopment group of parcels.
The primary education model to raise quality is to add more labor costs (e.g smaller class size )to an already overwhelmingly labor intensive model. Education quality is highly subjective so it is difficult to measure labor productivity.
My point is that if we approve the max school levy increase of 7.3% we will still have a structural problem… and that means the hard choices are not going away. This did not happen overnight and this year, if there is such thing as a silver lining, is probably a necessary aberration to level set the community and the various leaders responsible for the district’s financial health.
Frank – I think they are all fair points. What happens to the levy cap when our development adds more children to the school system? Are we allowed to increase the levy beyond the 2.5% cap to pay for all the extra children that the town will be responsible for educating?
Given demand for the specifics of how? and why? of recent and upcoming budget decisions, here are 3 links to documents I found that include a great deal of specifics/details. (The author of the original article also posted info as did another commenter) You will find many answers to questions asked above. Not sure if anyone will like the answers — but there’s background info here on fund balance spending decisions, staffing levels, etc. Individuals can make their own judgement calls. This is information from the Central Office. It looks like a lot to get through …but honestly going through the highlights probably doesn’t take as long as keeping up with these message boards. It’s good info as people get ready for the March 2 budget workshop.
1. ’15-’16 prelim budget info and COO commentary (verbatim) from Monday night:
https://www.montclair.k12.nj.us/WebPage.aspx?Id=2461
2. ’13-’14 budget audit report
https://www.montclair.k12.nj.us/WebPage.aspx?Id=2230
3.Historical budget information and submissions ’06 – current
https://www.montclair.k12.nj.us/WebPage.aspx?Id=2066
“Are we allowed to increase the levy beyond the 2.5% cap to pay for all the extra children that the town will be responsible for educating?” Yes, but I don’t know the formula.
Yes, the cap is on the levy $, not the levy rate. But, there are two parts to the issue. How much can we spend and who pays for it? The district’s primary concern is about how much it can spend, not where it comes from.
Montclair is about 83%/9%/8% residential/commercial/exempt. Our redevelopment areas are adding residential/commercial at about the same ratio use-wise, but much of it will be classified as tax exempt (but with tax abatement payment agreements). About 40% of households don’t utilize the school system in effect, subsidizing the district because it is a public good. So, yes, existing taxpayers of all types will pay more unless the township commits to sharing PILOT revenue with he district…regardless of whether there are children residing in these redevelopment areas. The greater good argument cuts both ways.
Here is what’s vey clear. We set up a number of working groups of residents under then BOE president Shelly Lombard to get into the weeds of the system operations. They then exposed the coming surplus in 2010. The Board was totally unaware. This then gave the system the impetus to finally conduct a fiscal audit. Within six months of its release both the Superintendent and his Business Manager resigned. However, where are those resident working groups today?
They made multiple recommendations on the expenditure and revenue side. Were any of those suggestions ultimately implemented?
We have very smart people here in town as evidenced by this debate and the other comments of our residents. If the school board reconstituted those working advisory groups on an on-going basis and forced staff to share real time data with knowledgable residents – both the feedback mechanism and the review process could help to turn our situation around. I proposed setting this up formally under the Board of School Estimate once but was told legally it could not be done. The impetus would have to come directly from the School Board.
Open up the process…
@Gretchen’s philosophical points are backed up by facts.
@Selma Avdicevic is also right that these events don’t happen in a vacuum – you really do have to go back a few years for the context.
From The Times in 2012:
“‘The big part of the fund balance was really unexpended health care, unexpended unemployment, unexpended tuition reimbursements to outside districts, transportation costs and energy savings,’ Sarinelli told The Montclair Times.”
There was a lot of money that was allocated but did not end up being used (note healthcare is in there).
“Sarinelli said the surplus was reduced on July 1; the first day of the district’s current fiscal year to $8.2 million when $5.7 million of the surplus was applied to the district’s 2012-2013 budget. A further $3.2 million of the surplus will be used in the district’s 2013-2014 operating budget.”
The expenditures Fleischer referenced were planned three years ago, in large part because any surplus over 2% is by law returned back to taxpayers.
“Under state law, school districts are allowed to carry a modest surplus limited to a 2 percent. Districts are required to use any surplus funds in excess of the 2 percent cap on tax relief in future years.”
We knew the surplus was coming down and used the money to make great investments. What we didn’t know was the massive scale of healthcare cost increases and other upcoming expenses. Fleischer followed state policy and MacCormack used the funds on, save the limited outlays for testing, projects the community supported.
Link: https://www.northjersey.com/news/montclairs-school-budget-surplus-hits-13-9-million-1.488632
Martin,
Yes, the 2010 Finance subcommittee did a 5 year projection that showed the district would spend $8mm over the cap in 2014-15. Scary accurate. The problem was no one wanted to deal with it…and besides the usual suspects, that included residents and the unions.
That is why the sub-committees went away. We can bring them back, but to what end? Another 5 year projection that no one really wants to face up to.
It’s funny, so much of what is happening in Montcalir happened in Bloomfield a couple years ago.
We had an inexperienced BoE and an inept Bus Admin and bad choices were made about using the district’s fund balance to pay for reoccuring expences. Well meaning BoE members (now gone) thought it would be a nice gift to taxpayers to provide a flat budget with no increase. It came back to bite us and we were in the same kind of multimillion dollar budget hole, some of it related to healthcare expences. At just about the same time our Super resigned (thank goodness) and BoE meetings were held at the high school with a packed house of angry parents waiting to hear what programs were going to be cut next. It took some seriously hard work by the board, the super, and the Interim BA to get things back on track.
Bloomfield is also staring down the barrel of the PILOT gun, as our brilliant mayor (disgraced might be a better word) and town council let developers have their way with Bloomfield over the last few years. I believe we had/have 12 different developments going on with possibly 500 kids (the true number may not be know for a while and is up for debate) coming to the district rolls. Many of these developments were given generous PILOTs of up to 30 years, and there is no agreement in place that says the town will give any of that money to the schools. We now have these tiny ticking time bombs that will start going off over the next few years as these kids come into the schools. The one positive is that our BoE and school leaders recognize that this is a problem and that we need to look ahead and plan ahead to deal with the influx.
My advice to Montclair is stop the PILOTs and the giveaways until the specifics of how the PILOT money will be divided out. It is also essential that Montclair hire a Super with recent experience in NJ (yes, very tough with the nonsensical salary cap), and just as essential that Montclair hire a BA that know his/her stuff.
Do the teachers pay towards health insurance like the rest of us? It seems in this day and age everyone needs to pay something to keep the costs to the employer (us) reasonable. I work for the state and when I started 15 years ago, I did not have to pay for health, dental or prescription drugs plans. Over the last few years, we have had to pay an increasing percentage of our salaries towards health care. I know it cuts into take home pay but if it is responsible for a big portion of the deficit, time to negotiate that with the MEA.
Yes, lovemyporch, the teachers contribute, and quite a bit : between 2-3 million. This is the figure Fleisher neglected to deduct from the total cost of health care to the district during his presentation.
The 95 percenters are hoisted on their own blue petards. If you like your Obamainsurance you can keep it. If you like your resultant deficit you can keep it.
flynnie,
I really tried to understand your point about the teacher’s health insurance contribution, but couldn’t. It doesn’t help that your numbers seem to be incorrect. FY’14 teacher’s contribution was $1.95mm. FY’15 actually went down to $1.74mm. It is also not clear to me who paid the premiums for the subset of paras that had coverage restored. It obviously can’t be the teachers. Did the paras have an employee contribution to premiums?
In the process looking at your claim, I found the timeline of the district’s process of switching insurance coverage illuminating in the context of Mr Fleischer’s 2015-16 budget remarks.
It starts in Jan, 2014 w/ MPS asking for quotes.
In mid-March the 2014-15 budget is published. Health insurance is budgeted at $14.2mm.
April 1 MPS receives price quotes from 3 insurance companies.
April 7 BoSE approves budget with $14.2mm health insurance.
April – the beginning of a material rise in medical services provided to employees versus previous years.
May 19th, the BoE approves switching insurance. The Cigna contract has a $13.3mm maximum cost to MPS.
May 22, Montclair Times reported, “Additional benefits to the Cigna package on the district side, according to Fleischer, were reduced costs that could be put toward supporting educational expenses and flexibility in negotiating next year’s MEA contracts.”
June 30 MPS transfers $1.24mm from FY14 operating budget and another $2.6mm from a special reserve account to Horizon to cover any run-out claims. Of the $3.84mm, Horizon returns about $2.1mm in 2015.
I’m too tired now to make any conclusions. Just wanted to share and get your thoughts.
MACCORMACK UPDATE: she’s not going anywhere, at least not for a while:
https://www.northjersey.com/opinion/opinion-letters-to-the-editor/the-montclair-times-letter-by-chris-mcgoey-superintendent-and-her-budget-must-go-1.1278374
Will she punish the teachers and principals who spoke out against her?
Will she seek to have Fleischer implement the Deutsch-approved cuts (physical education, art, music, middle and elementary school electives, sports, books and supplies, paraprofessionals, speech/occupational therapy, teachers) throughout the district and keep her bloated Central Office budget in tact?
Frank, you clearly have a better head for numbers than I, so I will articulate my concerns mainly as questions, and if you (or anyone else) can address them, it would be greatly appreciated.
In Fleisher’s presentation, he lists 19.53% of the budget increase for 2015-16 as employee benefits. If the 2-3 million (most likely 3 million as we Montclair is at tier 4 of deductions, and as salaries increase, so do employee contributions) in employee contributions were taken into account, shouldn’t that percentage then be significantly smaller? If so, why not publish an accurate percentage of employee benefits? (lovemyporch’s reaction is to be expected, as an inflated/inaccurate number is going to increase misplaced and erroneous anger/dismay at the teachers for not contributing when in fact they do).
Fleisher lists the projected increase for medical benefits as approximately $5 million. If this number should be listed as $2-3 million, does this or does this not affect the overall projected deficit?
Fleisher writes, “The costs of what we have are going up by an estimated 6.6 million, driven primarily by a projected increase in the cost of employee health benefits… creating a 10.9 million starting deficit.” If 2-3 million of the projected health care cost is covered by employees, can he accurately claim that employee medical benefits are the driving force behind the gap? Why does he choose to frame the problem this way?
Fleisher’s presentation covers the supposed need to privatize paraprofessionals and substitutes as the cost of their health care is prohibitive. If he did not calculate employee deductions into the other health care figures presented, did he figure employee contributions into the projected costs of covering paras and subs? As public employees, they too would contribute and offset the cost.
If the 2-3 million in employee contributions are not taken into account, and our taxes are increased to cover the 10.9 million figure, what will happen to this amount when it is not spent on employee health benefits as we are being told it will? In accounting for the spending of the fund balance, a full 16.56% is listed as being due to “other rising costs.” Other what? Will this 2-3 million in employee contributions free up that amount to be spent on “other” while our taxes are increased to supposedly cover rising health care costs?
Finally – for now at least – if this is his presentation not only to the public but to the Board as well, how are they expected to make the best possible decisions based upon incomplete or flawed numbers? Will we be calling them to account for mismanagement when they were not working with all the facts? More importantly, if the health care figures are not accurate, can we know that all other figures presented are accurate?
flynnie,
1) The 19.3% employee benefits in pie chart is of total FY2016 costs, not of the increase. I assume this includes pension and long-term disability insurance, etc. – not just health insurance costs. It would have been nice for Mr Fleischer to mention in writing what the total dollar amount of the FY2016 costs he is using. Did he orally give this number? I’m guessing it has to be in the $125-127mm range.
2) Most of the MPS employees seems to place us at Tier 3 this year (75% of State’s contribution schedule), not Tier 4 (100%).
3) Year 4 of the phase –in starts on July 1, 2015, and the premium sharing component of the law expires on June 30, 2016. The fully phased-in premium sharing rates are the basis for future negotiations.
4) I can not reconcile the MPS employees current contribution % at Tier 3, much less a Tier 4, to the State schedule. It seems to be almost a full phase year behind (lower) than it should be. This suggests a possibility the MPS requested a waiver from the State when the new contract was being negotiated to set a lower phase in schedule.
So, without knowing the contract details, I can only guess. That guess would have the MEA’s health insurance contribution going up from a low of $750K to a high of $1.25mm.
My $1.25mm number reflects a 72% increase over FY 2015.
I agree this should have been clearer with whatever the employee component is since healthcare was postioned as the #1 driver.
cspn5 – I totally disagree with your assertion that the BOE members are interchangeable, and that the district would have had fiscal challenges regardless of who was in charge (BOE member Shelley Lombard said the same thing as you in a recent Montclair Times article).
The reason why we’re in this crisis is because of the BOE members who supported, enabled, and encouraged MacCormack’s ineptitude, secrecy, non-transparency, and wasteful spending. These supporters/enablers made very specific choices in how they approached their BOE responsibilities, and their harmful decisions, actions, and behaviors directly contributed to our current fiscal state.
These toxic decisions, actions, and behaviors include:
• Subpoenaing their critics in the community (and having to pay huge legal fees to support that cowardly effort)
• Awarding merit pay to MacCormack (and MacCormack’s cronies) based on specious, unverified data
• Under the guise of “equity innovation”, overspending on technology without monitoring how this sizable expenditure would affect the district’s bottom line
• Padding Central Office with employees who’ve contributed nothing to our district
• Hiring the current BOE attorney (recently fired by the Clifton BOE) whose specialty is restricting public comments at Board meetings, and who has been reprimanded by the ACLU for doing so
• Hiring a p.r. person to exaggerate MacCormack’s “accomplishments”, distract from her many failures, and manage those who questioned/opposed the policies of Central Office and the BOE
• Hiring a search firm to find an interim replacement for MacCormack, when that money could be saved by bringing on a qualified candidate who already works within the district
The above decisions, actions, and behaviors created the strife that we’re now faced with. And by strife, I don’t just mean the impending program cuts, staff layoffs, and tax increase – I’m also referring to the acrimonious atmosphere that MacCormack and the BOE have created and perpetuated in Montclair.
The community supporters of MacCormack, Deutsch, Kulwin, Larson, Lombard, and Fleischer are blaming our fiscal dilemma on rising health care expenses and other structural factors, but here’s the truth that they’re trying to dodge: ***competent BOE members would have foreseen the problems, informed the district, formulated a plan, and taken action***.
To assert that the challenges that we’re facing and the garbage that we’re now wallowing in would have happened regardless of who was on the Board is a cynical attempt to distract from the undeniable responsibility of the guilty parties: MacCormack, Deutsch, Kulwin, Larson, Lombard, and Fleischer.
Asssessmentgate the only bullet point you list which would have a real impact on the budget deficit is the technology upgrades, the rest are minor in comparison. Those purchases were made in good faith to bring us up to speed with our neighbors and modernize our schools in general.
drcolson, you really think paying $100,000+ for an investigation into the non-leaked assessments was in good faith and brought us up to speed with our neighbors? Or are you saying blowing through $100,000 in taxpayer money is so insignificant we should’t worry about it?
The problem is that most (but not all) of the BOE members approved every $100,000ish expenditure put before it by the superintendent without really questioning whether tax dollars were being used effectively. And while these items don’t account for the entirety of the budget crisis, they do add up to a sizable chunk. Given that this is the chunk we can do something about, I think pretending these hundreds of thousands of dollars don’t matter is quite foolish.
fish – I don’t think that the $100k spend on the investigation was a good spend of money by any means. But I think people are missing the bigger issue here. The really big problem we have is all the RECURRING expenses the the BOE approved and used the one time fund balance to pay for. These are the items that have caused the structural budget problems we are faced with today. The one time expenditures will not be in next year’s budget. But we still have a giant shortfall.
we’re talking budget here Assessment. let’s answer or speculate:
Subpoenaing their critics in the community (and having to pay huge legal fees to support that cowardly effort)
– $170,000 or so in total cost for this? is that right? crazy but is that close to the cost?
Awarding merit pay to MacCormack (and MacCormack’s cronies) based on specious, unverified data?
– How much were these bonuses? The woman makes $175,000 so I doubt she got a $100,000 bonus herself.
• Under the guise of “equity innovation”, overspending on technology without monitoring how this sizable expenditure would affect the district’s bottom line
– if we didn’t have tech upgrades I am sure there would be more people up in arms about that. And what was this cost – $500,000? What is the useful life of the tech purchased, is this cost recurring at this level?
• Padding Central Office with employees who’ve contributed nothing to our district
– How much did this cost?
• Hiring the current BOE attorney (recently fired by the Clifton BOE) whose specialty is restricting public comments at Board meetings, and who has been reprimanded by the ACLU for doing so
– How much different is the cost than the old BOE attorney? Is she more expensive?
• Hiring a p.r. person to exaggerate MacCormack’s “accomplishments”, distract from her many failures, and manage those who questioned/opposed the policies of Central Office and the BOE
– this guy cost $60,000 if I recall.
Hiring a search firm to find an interim replacement for MacCormack, when that money could be saved by bringing on a qualified candidate who already works within the district
– this is a max $175,000 full time job and for an interim how much will this cost – $5,000 – %20,000?
Add all that up and your probably at around $1MM – $1.5MM. Note – I AM NOT EXCUSING THE BOE AND SUPER, I BELIEVE THAT IF ANY OF THEM WERE REAL LEADERS THEY WOULD SHOW THE TOWN AND THE VOCAL CRITICS SOMETHING INSTEAD OF GIVING THEM FUEL TO ADD TO THE FIRE. What I am saying is that the real costs – not the $100,000 on an investigation that was stupid to begin with – will not be addressed.
Questions for you….if you were in charge would you have given the teachers raises of 2+% for the each of the last 3 years (this is the largest part of the budget right)? Would you ask the teachers to pay more toward their benefit plans (part of the largest part of the budget)? And outside of the costs you mention above, which can only add up to so much, what would you cut of substance if you had the knife and could shape the district?
Fishoutofvodka – It isn’t that $100,000 for an investigation is irrelevant, but eliminating two line items that offend you (and as njgator notes are not included in the current budget) won’t solve our problems. When it comes to the technology purchases you misrepresent my point. I said money going the investments are to bring us up to speed with our peers, not to fund investigations. We can disagree without mischaracterizing each other.
FYI:
“MacCormack could receive a bonus of 3.3 percent of her base salary for each of three quantitative merit criteria she meets, and 2.5 percent for each of two qualitative merit criteria achieved.”
$10,295 max.
An interim superintendent, under any calculation, would be less expensive than the current superintendent.
Search firm:
Most searches are fee based and payable if the firm brings in the person hired. There may be a retainer clause, but this would be a very small fraction of the cost. So, we retain the option to promote from within at little/no additional agency cost. The problem is an internal candidate must have superintendent’s certification.
Oh, I forgot the Central Services cost is actually less than under the Alvarez administration, is below State avg, is lowest in the County…and, as a kicker, we now have a real competent Director of Technology (at least that is what I understand) and our own servers.
drcoulson, my apologies. I believe I misread what you were saying.
I agree that eliminating one or two $100,000 items (even ones that don’t offend me), is a drop in the bucket to the problem we have–but there are a lot of drops in this particular bucket.
The BOE has not say “no” very often (if ever) to the superintendent–whether its surveys, assessments, trainings, workshops, studies, bonuses, extra administrators, etc.–and only a few of the BOE members even seem to question whether these requests are paying for anything of value to our schools.
So, these $100,000+ oh-why-not items might as well be recurring expenses because our BOE has not developed a culture of providing financial oversight and/or asking if money was well-spent before writing the next check. I’d like to see some discussion about how these smaller-but-still significant expenses add up. I’d like to see some discussion about which ones actually paid off in the classroom.
fishoutofvodka,
I wholeheartedly agree. Anyone that has had to manage large organizational budgets knows that most savings come from line items 3 decimal place less than the total budget amount. Yes, the big line items must be trimmed, but % wise, my experience is watch the pennies (or pittances as recently referred to) as they do indeed add up quickly. Sorry to overplay it, but, the crux of the sustaining the savings and creating the proper fiscal culture is distinguishing between reoccurring expense versus recurring expense control.
fish – I wholeheartedly agree that a big part of the problem is the BOE’s inability to say “No”. Even though in previous budgets, they were fully aware of the upcoming deficits, they still approved it all.
I thought the whole concept of an appointed board was to save us from ourselves….since we can’t be trusted to elect a competent board, right?
Now where do we find folks with a knowledge of education, a head for math and the backbone to be a grown-up and say “No” when necessary?
Ok I KNOW you guys are going to yell at me because you think I’m plugging the site, but is anyone else surprised Montclair Schools Watch hasn’t jumped in on this? I thought they would be all over it and to be honest they did some pretty good research. Just my opinion sorry in advance!
I though that Montclair School Watch quit a week ago and accepted a job in the private sector?
The concept of an elected school board in Montclair is two-fold:
1) to fill a majority of positions with residents who are educators (versus laypeople)
2) move financial oversight from the BoSE, an elected/appointment-based membership, to the voters.
As the majority of Montclair’s growth is planned to come from childless households, that block of voters could or could not align with households with children. We are adding 600 housing units by 2019. That’s over a thousand potential voters.
Outside of the State mandates, Montclair’s BoE’s have always been responsive to the parents wishes. I would say overall, but certainly as evidenced by their spending pattern. I assume an appointed BoE would be the same, if not more so. The problem is financial management fortitude. I think it is fair to generalize and say our local educators have not been known for their financial prowess. Hypothetically, is there a former superintendent over the last 20 years that, if they lived in town and was elected to chair the BoE, would be a good financial leader? Do you think the BoE would be better lead financially? Lot’s of variables.
@cspn55
ba dap bom!
The Montclair BOE has a history of incompetence when it comes to financial matters. A few years back, the BOE seriously considered closing Edgemont and Renaissance to address a budget deficit, only to discover that there was a substantial surplus. No one at the BOE seems to be be capable or willing to focus on the numbers. This is a repeat of the same level of incompetence that we saw during the “closing schools” discussions. It is just mind boggling. Since the BOE is responsible for governance, they bear full responsibility for this mess.