Following a long, arduous regular meeting a week earlier, the Montclair Board of Education held a long, arduous budget workshop meeting on March 2, which went into March 3. The board came up with possible cuts that would get the district’s budget deficit down to $5.4 million, necessitating a 5.5 percent tax increase if the proposed cuts were agreed to, but no final decisions were made.
Chief Operating Officer Brian Fleischer began by explaining that he had gone through several items, some of which the board pored over later, in the quest to eliminate redundancies and improve efficiency. On the subject of employee contributions to health benefits, he said that employees change their plan selections based on changes in the family, which made it hard to gauge exact numbers, though the contribution would rise with salaries. He estimated that costs under the district’s Cigna contract would hit the cap of $13.27 million, with a $2.9 million contribution for the 2015-16.
“Since contribution percentages remain the same as premium costs go up,” Fleischer said, “we added 35 percent to that projection to reflect the projected increase in premium rates, which brought us to $3.95 million. With our total estimated medical costs projected at 17.9 million, the employee contributions would be about 22 percent of the total costs.”
Fleischer added that he hoped to secure medical insurance for paraprofessionals under the Affordable Care Act when they become eligible for benefits next year at $476,000, with $53,500 in employee contributions. He said he’d rather help paraprofessionals get insurance than pay the fine for the uninsured, which would be cheap at first but go up over time, though a June decision by the Supreme Court on subsidies may render that moot. One thing he was sure of was state aid – he told the board that it would remain at $6.7 million.
In looking at possible cuts, board president David Deutsch said that union agreements and state regulation made the budget untenable and deprived the board of flexibility in formulating a spending plan, and so the cuts made would be painful in their efforts to produce the most fair budget possible. Schools Superintendent Penny MacCormack – who is staying on the job for 30 to 45 days after her announced resignation until a temporary superintendent can be found, with a permanent replacement likely to be in place by September – was also present, despite a previous call to step down made Montclair Principals.
Dr. MacCormack suggested that $300,000 from the fund balance could go into the budget as a cushion that would allow the district to step down from relying on it. The board looked at cutting staff from the central services office, including the chief talent officer position, for a savings of $420,000. Board member David Cummings wanted to see more cuts in central services, but MacCormack said that further reductions in that office would starve the schools.
While such a cut was readily agreed to, outsourcing paraprofessionals for a savings of $1.8 million was a proposal that went too far for most board members, with Anne Mernin expressing doubt that paraprofessionals hired by contract from outside would be of the same caliber as current paraprofessionals. The board was split on the subject of eliminating either elementary-school deans and student assistant counselors. Mernin suggested that the individual schools should be given a choice on the matter.
On cutting athletics, Dr. MacCormack said that principals were happy with the proposed 10 percent across-the-board cut, thought Fleischer interjected, “‘Happy’ is not the right word.” Dr. MacCormack rephrased her comment, explaining that the cut was something they could live with. That was not the case for Cummings, who said that athletics was a positive program for the students who participated and made his displeasure with the proposal plain. Both Deutsch and board member Shelly Lombard, while not enamored with the idea, believed that the cuts could be sustained, and they remained in contention.
Fleischer also proposed an $80,000 cut, from $240,000, investments in technology, believing that the district had enough recently purchased computer equipment to survive a one0time cut. Mernin said that the district needed to “take a breath” and put together a plan going forward for its technology program. There was still concern for computers for pre-middle students; while the cut allowed for leasing computers for K-5 students, there was still a need to purchase computers for Nishuane School. Board member Jessica de Koninck concurred, saying that it was imperative to get young students acclimated to computers. The cut remained under consideration.
Also, Chief Academic Officer Gail Clarke briefed the board on a proposed language immersion program, which continued to receive support in public comment at the workshop. There was a lot of work needed to implement it, she said, mainly through teacher training and acquiring resources, but she added that it could be ready by the 2016-17 school year and beyond. The board was generally supportive in pushing forward on the proposal, which would add $34,000 to the budget.
I watched some of the board meeting on TV last night and found the process dispiriting. Playing around with numbers in an interactive spreadsheet is always going to be part of the formulation of a budget, but the choices seemed abstract, arbitrary and emotional. I hesitate to draw parallels between the running of a public service and a business, but there’s no reason why the school board shouldn’t start off this process like a business and assume there is no more revenue. No company would expect its customers to pay more for less, and the board should at least push the schools to find savings, even painful ones, before they seek more money. I can live with higher taxes if there really is no alternative, but to start this process on the assumption that citizens should pay more is the lazy option.
One other point that we musn’t lose sight of is the scandal of the health premiums. We can’t do much about the stupidity of using the surplus to pay recurring costs, but the $5 mln increase in premiums demands further investigation. If this is what it costs to provide good healthcare at a reasonable price to school staff, then fair enough. But if it’s a net transfer of money from the school budget into the pockets of near-monopoly hospitals and other parts of the medical industry that are insulated from market forces, then we must fight for change.
@muba…you just described what Obamacare was really all about…shhhh…you may wake the public up.
Muba, to your first point, BOE President tried that, which caused a two-hour long discussion by certain Board members, which concluded nothing. Having people sit in a meeting and repeat the phrase: “I don’t know what that means”, as they are looking at an Excel spreadsheet, has, however, made me extremely frightened. As has inability of some BOE members to calculate percentages. One doesn’t need to have an MBA to be a member of BOE, but there should be some understanding of how numbers work.
I also have to add that the only BOE member that spoke about the interests of the tax payers and how these discussions and decision would affect them, was Mrs. Lombard.
The insurance costs are simply stunning and it’s amazing we live in a world where organizations as large as the BoE must consider extralegal routes like paying a fine instead of providing basic healthcare in order to stay solvent.
I’ve been away and just saw this. Pretty Penny wants to charge me an extra $1,000 because she can’t handle the books? This is the shining picture of brilliance that we hired? C’mon. Did she pass the third grade PARCC math tests?
All I can say, is throw the bums out.
Selma, you have a valid point here: the fact that our BOE doesn’t understand the ramifications of their financial decisions is hugely troubling. What’s even more troubling is that, according to their resumes, three of our BOE members are financial experts.
David Deutsch is Senior Portfolio Manager at ICG Alternative Credit. How would his clients react if they learned that his investments resulted in a loss of $10,000,000 for them, and when they asked the reason for the drop, he said “I don’t know”?
Robin Kulwin has a background in banking at Chase Securities and Americana Financial Services, and was also the Deputy State Treasurer and the Assistant to the Governor for Economic Development in Mississippi. Was the financial condition of our school district more difficult to ascertain than that of Mississippi’s, or Chase’s, or Americana’s?
Shelly Lombard has an MBA in finance from Columbia University. She worked as a high-yield bond analyst for several Wall Street firms including Drexel Burnham Lambert, ING, Chase, and Barclays. Also, she has almost 20 years of experience doing financial analysis of major corporations. With that kind of financial acumen, one would think she would have had a better understanding of our district’s financial challenges, and could have foreseen the problems that were in the making. Does she also not know what went wrong? If so, how is that possible, given her impressive education and career achievements?
Given the esteemed financial pedigrees of these Board members, “I don’t know” or “I don’t know what that means” just doesn’t cut it. The truth is they know *exactly* what happened to the money that they spent, but they chose not to let us know, or to do anything about it, until it was too late.
They should come clean and let us know the truth – or they should resign their positions.
[Editor’s Note: Nothing has been ommitted]
I wish that Baristanet would not omit from assessementgate’s researched posts the paragraph or paragraph with the explanation, in specific terms, of how the Town ought come up with the money to pay for health costs and negotiated raises for our teachers and how the Town’s annual budget for our schools should be most effectively allocated to benefit all of our kids including those who are not keeping up and those who are doing fine.
Assessment….have you not realized by now that most people who proclaim or are perceived expert in anything really aren’t and are usually full of baloney. Look at that two major economist predictions for last year (2014) and what actually happened. Find an economist that didn’t predict that:
The price of oil would rise in 2014 and that Interest rates would rise in 2014
There are none I can find, but the opposite happened – oil declined a lot and rates fell in 2014.
While spreadsheets and budgets are more concrete, these guys likely got it wrong on potential health care costs and what the increase would be. It wasn’t like they were telling us they weren’t going to suggest raising taxes, they gave us 3 tax raising options I think. They just underestimated the health care cost part while they continued to increae spendinv on all the other things including raises for teachers that exceeded the 2% state cap for taxes. And by the way, you and I and everyone else here would likely have made the same underestimation in regard to the healthcare issue.
Pelberg I did a little bit of a double-take reading your comment (why is Baristanet censoring people?) before I got it. You have me smiling because it perfectly encapsulates what’s lacking in these arguments. Assessmentgate, you constantly attack people and try to find blame even when it isn’t relevant. My understanding of the budget is we changed healthcare providers last year which initially saved money but then rates rose dramatically. Dan tana it’s a coincidence you bring up the number $1,000 because that’s the amount we saved, per person, when we went from Horizon to Cigna. Now of course, Cigna’s premiums are a big piece of the budget deficit.
Can someone explain why they took on a new expense that will provide language immersion for a maximum of 50 kids out of the entire district when they need to be finding cuts??
The immersion expense was stated to be $34K, which I think parents will ask to pay through fundraising. They don’t want to be responsible for anyone losing their job. The breakdown is $20K for the foreign language consultant and $14K for materials (Montclair doesn’t employ a foreign language supervisor).
$5K+ is saved for every immersion classroom the district supports. The immersion classrooms don’t need WL instruction, which equates to savings of $5K per. The hope is for 4 immersion classrooms next year, which would be $20K in savings.
As more immersion classrooms are added, the district gets more savings. There’s a potential of over a million in savings if the roll out is a success and there’s strong demand.
Two reasons the BOE is probably moving now on this implementation. 1) Immersion students have been entering the district from Head Start and the Montclair Community Pre-K for the past 3 years. They’ve been missing the boat while the district has been debating merits. 2) The Current and future opportunity for budget savings.
@Selma:
I see your point, and I mostly agree. But, to be fair, only some of the BOE members had trouble with the numbers. More, one member’s difficulty seemed to be as much visual as anything else.
Perhaps worse was the time spent on unrelated ideas. The ideas aren’t necessarily bad, mind you, but they’re unrelated to the budget. For example, one BOE member seemed obsessed with the idea that some CO staff members are overpaid. True or false, that’s not really related the budget. The BOE can add or cut positions, but it isn’t in a position to evaluate staff or negotiate salaries (esp. given the time frames involved). Besides: the potential savings would be trivial.
Similarly, one BOE member wanted a detailed look at the increased health care spending. The idea was that this data might suggest things that could be done to reduce that spending. True or false, this isn’t something that will help right now. Perhaps some type of “wellness program” would be useful when the insurance is next put out to bid, but that’s not this week’s task.
As I wrote: it’s not really the ideas that are a problem but the timing and what the timing implies. The implication is that the members going off on these tangents don’t realize that they are tangents. They’re not fully grasping the task before them, what it is, and what it is not.
I’ve invested plenty of time in the schools, and I don’t begrudge more time spent in a budget meeting. This process is perhaps the most important assigned to the BOE. They should take the time to do it as well as possible, and we should be paying attention as this occurs. I do prefer, though, for the time spent to be productive.
It was distressing to see some members approve, with almost no discussion, cuts to teaching positions while wasting vast amounts of time on unrelated matters. We need to encourage our BOE members to keep their eyes upon the goal, as well as to remember their mission: oversight of education in Montclair.
…Andrew
Health Care benefits have been a constant given. Up until recently educators didn’t contribute anything towards their healthcare. This allowed for the profession to attract quality employees who may have passed up on the profession due to salary restraints. While Mr. Fleischer appears to try and conceal the contributions that teachers have been making for the last few years most educators are getting paid less now than they did in 2010. Please forgive me if I’m going on and on but my point is how can health care be to blame when it’s always been one of the only givens in the budget; varying only now in the percentage of contributions the teachers put out, which can only increase. Why don’t we start thinking about what is new to the budget lately that is unpredictable if we want to uncover the culprit.
Does the proposed 5.5% tax hike have to be voted on by the town?
Yes, those focused on the healthcare are not focused on where the money went last year. Teachers and Paras pay into their benefits now like Marcella said. Just like my husband’s insurance went up a bundle for his job, we were to expect that everywhere. Sure. The 35% increase sounds huge, but why did they change carriers when the MEA fought them so hard on this? Maybe that idea wasn’t such a great one huh? Regardless, let’s focus on where that money really went. Looking forward, the cuts need to be where it LEAST affects our students.
Andrew,
A questions for you tonight about timing.
What were the special circumstances this year that permitted, in the last week of February, Mr Fleischer to use retirement projections to make over $2mm of the original $10.9mm shortfall go away without any further public elaboration?
I label them special because in prior years, it was handled much differently and many months later. The budgets were cut with he understanding that if the projected retirement savings were realized later that year, the savings would be spent rather than allowed to go to surplus.
It seemingly is reversed this year and it concerns me the BoSE will likely have to accept this accounting flip flop. They shouldn’t, but I assume they will because of their lack of financial expertise and they don’t have outside financial consultants hired to help them.
You served on those work groups back in 2011, so I thought you might have some special insight.
mtclanguages,
That is not a savings to the district. Further, the way you explained it, it is financially improbable to avoid $1mm in expenses unless you are assuming the future parents of future cohorts will continue the tradition of funding this.
I don’t think the concept is scalable in our magnet system. Further, this is exactly how we picked up the last set of recurring expenses…somebody footed the start-up bill and then we had to assume the cost during the flat levy years.
Regardless, there is no need to put any money in the 2015-16 budget because the parents will fund the first class (out of how many?) in the first year.
Frank,
The $34K is startup expenses.
Immersion classrooms cost at least $5K less than traditional classrooms (recurring). And, they outperform traditional classrooms in math and English standardized tests and reach fluency in a second language. They also provide more opportunity for the immersion students than for the traditional.
The District’s 35-member WL Roundtable Committee felt it was scalable. The state of Utah is in the process of switching all their elementary schools to immersion.
If we found a better way to do math I’m sure we would share it with all the schools in the magnet system. Kind of like we are doing with the Writer’s Workshop model.
I’d love to meet with you. You ask a lot of good questions on all the issues. It would be great if you fully understand this one.
Meet for coffee? mtclanguages[at]gmail[dot]com
mtclanguages,
I’m sure it has great potential. Bi-literacy, closing the achievement gap, increase social tolerance, etc, etc. What’s not to like. But, when I look at Princeton’s proof of concept pilot program & what Ms Clarke has said, I don’t think Montclair is ready. An improperly designed pilot will add unnecessary risk to its success. But, my primary focus is the MPS financial sustainability without 4-6% annual school levy increase.
When I consider the budget implications of programs like these, they tend to lack a 5 year financial pro forma or a clear bail out plan if the program is not meeting the original goals. Princeton has a clear ‘go/no go’ clause at the end of the 2 year pilot. I also believe programs like this with distinctly different program requirements & structure are essential creating a magnet school within a magnet school. The magnet model is a premium cost model. Adding a magnet within a magnet makes me doubtful that this can scale. Is Utah a magnet system?
mtclanguages,
I read the just released report. I think it tends to support my concern. Besides the payroll math errors in the report, this program has a lot of issues to work out and 2015-16 is just plain unrealistic.
Any news on last night’s meeting, which I missed? Looking at the documents, including this https://www.montclair.k12.nj.us/WebPageFiles/2461/budget-15-16-memo.pdf, it appears that they are proposing cuts that will keep costs flat vs last year. The main cuts are a reversal of last year’s increase in kindergarten classes. That still leaves the budget $6 mln short on revenues that were funded last year from the surplus. In other words, taxes are going to increase to cover the $5 mln jump in health costs. This is why it is important to understand why the premiums are going up so much. Teachers are entitled to good health coverage, but we need to know how much of the increase is paying for better care and how much is simply additional profit for the medical industry.
Couldn’t agree with you more, muba.
We also noticed the math errors in the costs section that should be ignored. The idea of a supervisor was rejected by the BOE on Monday.
A guess that’s why Gail commits to paying $3K per day for the consultant forever. At some point, I would think the training wheels come off. Our K12 WL/Science supervisor should be responsible for this program.
I didn’t see a mention of the cost savings? That should be a key point considering Montclair’s tax situation.
Did you Frank?
Frank,
I would say that the District should take its time if we didn’t already have Head Start and MCPK immersion kids with no place to go for the last three years. It’s time to stop missing the boat for these kids.
We’ve been studying this for 3 years.
We have a trained immersion staff at Northeast. We have over 5 months to get ready. We’ve done much larger projects in less time. Let’s get a little focus. Let’s get this done for the kids and the taxpayers.
How does something get worked on for 3 years by us, we hire the same consultant as Princeton, we have a 35 member working committee…
….and we get a flawed report and are suppose to ignore the financials
…and you don’t see the major flaw in the financials – which is not a math error
Now you ask me to put on my rose-colored glasses for the kids? Oh stop! This will likely get approved because this is how it works in Montclair. MPS rushed a report that is flawed (at best) and once again we will sit up next year and say how can we have such a large shortfall.
And the MCPK argument is selfish, me first argument when you think it is one of eleven pre-k’s in town and when/why they implemented it.
— District immersion discussion started before the Summer of 2012.
— Originally hired same consultant at Princeton to save money by sharing the service.
— District created WL Roundtable Committee in fall of 2013.
Other than consultant fees, nothing being added to the budget to implement the immersion program. In fact, the budget decreases as the need for traditional WL teachers declines over time. We do need to reduce need for consultant by training our own staff.
The immersion model reduces the school budget. It won’t be responsible for any budget shortfall.
MCPK and Head Start preschools have immersion. A third is in the works. When would be the right time to continue the program in the District? When would be the right time to start saving money?
The WL Roundtable Committee gave the BOE budget projections (savings) for 13 years.
Fair enough. 35 selfish people around a round table.
I’ve said it now twice at the meetings and I will say it again. I think immersion is a great idea. I think wasting what has now been over two hours over the course of the last few meetings listening to people ask for something that adds even one cent to the budget is just poor timing. Bordering on inappropriate when our teachers are on the chopping block. It was nice Friday night to finally not hear the same 20 or so people say the same thing about the program and about how the preschool class this year should be able to continue with their immersion next year while those of us in the schools are now about to lose K teachers, music teachers, classroom teachers, paras…. I know one person said they would raise their own money now but that came after having to endure this endless litany that has made many in the district feel like the board has really placed a lot of attention and time on this while ignoring how the budget cuts will affect the kids. As Anne Mernin said last Monday, this is about the kids and that doesn’t mean providing immersion for them in a budget crisis.