Report of the Schools Subcommittee of the Maplewood Citizens Budget Advisory Committee for the 2014-15 School Budget

We have reviewed all public documents related to the proposed 2014-15 budget for the South Orange-Maplewood School District and have the following observations and suggestions.

This is a very tight budget. While taxes will be rising 2%, overall expenditures are rising only 1.45% over the 2013-14 Original Budget. The need for a 2% tax increase is driven primarily by the fact that state and federal aid make up a declining portion of the district’s overall revenue.

We commend the Board and district administration for their efforts in managing costs. We are NOT recommending that the district increase the operating budget beyond the current proposed tax impact of 2%. However, we ask the Board to more closely evaluate the effect that multiple years of tight budgets have had on the quality of the district’s core educational services. In addition, we recommend further analysis of the precise costs that ongoing initiatives add to the budget, to ensure the district’s ability to sustain them.  As part of that analysis, we urge the Board to focus in particular on the combined impact of increasing enrollment and flat staffing on the quality of education our district provides, studying the ramifications of increased class section sizes, deteriorating ratios of support staff to students and other resources critical to children’s success.

Most importantly, the Board needs to better analyze the incremental costs associated with new initiatives, like technology, to avoid compromising the quality of core services as these new initiatives are undertaken and to ensure their sustainability. In the face of ongoing revenue constraints, we must collectively and carefully choose what we can afford to do.  The Board must then make sure that the administration is doing those things well and with consistency across the district.

Increasing Enrollment Without Additional Revenues Brings Additional Budget Pressures

According to the district’s own studies, increased enrollment is driven in part by new housing developments in both towns (memo to the Board from Business Administrator Cheryl Schneider, 12/16/13). In some cases, these developments come with additional tax dollars for the schools, but do not necessarily cover the costs associated with the additional students. In many cases, housing developments result in more students, but long-term tax abatements preclude any additional school tax revenues. We commend the Board for its recent efforts in bringing this to the attention of municipal officials who approve these new developments, and the accompanying tax abatements sometimes granted to the developers.  We suggest more effort on this issue in our recommendations below.

Here are some sobering facts. Since the 2007-08 school year, elementary enrollment has risen from 2,750 students to 3,238 students, an increase of nearly 18%. The percentage of students on free and reduced lunch is now 21% of total enrollment.

Furthermore, staffing has remained flat for nurses, elementary social workers, librarians and core classroom teachers. The number of building administrators, including assistants to the principal or assistant principals, has also remained fixed. It may be that there was slack in the system that absorbed the enrollment increase, but we doubt it. While the Board’s policy on grade-specific class size maximums has not, to our knowledge, been breached, class section sizes are more fully loaded, given the enrollment increases and flat staffing.

We note that, like almost all districts in the state, our district is in substantial violation of the target resource levels for class size, support services and administrators constitutionally mandated by the staffing model adopted as part of the School Funding Reform Act of 2008 (the “SFRA”). We hold the State of New Jersey principally responsible, given its refusal to fully fund the computed state aid as mandated by that same SFRA.

Our district already provides lots of budget information, but we recommend further transparency, to ensure that all schools are equally resourced with respect to the needs of their student enrollments. At present, parents in most elementary schools believe that their school is getting the short end of the stick. There is no way for them to tell otherwise, and where there is lack of detailed information, anxiety, speculation and frustration fill the void.

Secondly, there is too much anecdotal information that struggling students and children with special needs are not getting the services they require to succeed. There are also reports of significant delays and too much frustration in the process of obtaining those services.  Parents report that it is difficult to obtain information on what services are available and how to access various types of interventions and support.  We don’t know how effectively special services are delivered or how well the evaluation and classification process works. There is no information on the quality or effectiveness of the services, only anecdotes.  Where there is lack of detailed information, anxiety, speculation and frustration fill the void.

Private-Public Partnerships Need To Be Strategically Managed

Many of us spent this past Saturday night at one of many dinners as part of the Night of 100 Dinners, helping to raise money for the Achieve Foundation.  The fundraising efforts by the Achieve Foundation help to fill a substantial gap in our budgets and encourage innovation among our educators through the Teacher Grants Program. Furthermore, we are all invested in the extensive efforts of the PTAs, HSAs and other parent support organizations to raise money.  

We are concerned, however, that many of the efforts for fundraising, especially those related to the purchase of technology, are not strategically coordinated with the district and may result in purchases that are not adequately supported or sustainable. We are also concerned that there is a lack of equity across the schools in the district where valuable resources -- be they computers, playgrounds or library books-- are funded privately. We urge the Board to establish clearer guidelines and processes regarding the coordination of grants with the requirement that: (a) there is equity in what all children across the district receive and (b) the provision of privately-funded resources does not result in acquisitions or initiatives that the district cannot sustain.

Growing Indebtedness and Higher Debt Service

The district’s level of long-term debt has grown over the last five to seven years from an average level of $30 million in outstanding debt to the current level of $45 million, with that amount slated to increase by $5.08 million in the next several weeks resulting from the recently-approved bond issue.  Outstanding debt has, therefore, increased by 66%.  The level of annual debt service – consisting of principal and interest payments – has also increased from an average of $3 million annually over the past 20 years to more than $4 million in the current budget cycle.

There is clearly need to invest in capital improvements, but we ask that the Board consider how the current – or increased – level of outstanding debt will affect the district’s long-term financial position and possibly its future credit rating. We note that the Board has already indicated an intention to consider another $10 million bond issue in 2017, long before most of the current outstanding debt is retired. We realize that this is still significantly below the district’s statutory debt ceiling, but it may prove to be higher than prudent in the long run.

We have questions regarding the process for reviewing and reallocating unused balances from prior capital projects, but we will submit these questions and recommendations to the Board in connection with the goal setting process for next year.

Furthermore, the number of portables across all elementary schools remains at an all-time high with no signs of decreasing.  The elementary schools are bursting at the seams. We urge the Board to consider a long-term analysis of district needs and consider whether construction of one or more new schools might be required in the next 10 to 50 years. We realize that there is an apparent lack of land on which to build and observe that finding the land might involve a sequence of shifts in land use across both towns.

CBAC Recommendations for This Budget Cycle

1.  Consider significant increases in the level of incentive payments for employees to opt out of healthcare coverage in order to increase the number of employees who do so.

2.  Consider hiring of an independent ombudsman (not an advocate), either on staff or by contract, fulltime or part-time, to ensure that all parents – but especially parents of children with newly-identified special needs – understand how to navigate the system. This sort of service would not only provide additional support to parents, but also provide an independent channel of feedback to the Superintendent and the Board on the effectiveness of service delivery. The minimal budget for such a contract position might result from shaving the allocation for the District Management Counsel (the “DMC”) or similar budgeted consulting services.

3.  Work with an independent outside group, such as the DMC or another group, to administer a parent survey focused on special services, including the delivery of services and the classification process.

4.  In light of the proposed budget’s potential impact on staffing and instruction in the classroom, re-consider whether there are additional savings to be had through greater efficiencies in central office, especially through further improvements in use of technology and concomitant reductions in support staff.

5.  We urge the Board to adopt a goal for 2014-15 directing the Administration to undertake an Operational Risk Audit, with appropriate outside help, to review: (a) all security measures in process of being implemented; (b) all Information Technology policies, processes and procedures affecting data security and business continuity; (c) risks attendant to the supervision of student athletics and extra-curriculars; (d) adequacy of policies, plans, procedures and training for responding to emergency health issues in the schools; and (e) other activities typically considered part of the domain of operational risk.

Further Recommendations to Increase Transparency in the District Budgeting Process:

We acknowledge the hard work and long hours that go into production of all the budget documents.  As part of our committee efforts in the preceding months, we made a number of requests to the business office and received a timely response. In some cases, we were told that the information requested did not exist or was not maintained as a public document. We appreciate the amount of effort required to produce and double-check each public document, but nonetheless feel that public confidence and taxpayer support would be measurably improved if the district were to incorporate the following in the standard set of budget documents produced annually:

1.  A detailed class size report, that shows the size of every section in every school (at a minimum for elementary schools) for the current year and projections for the budget year under consideration.

2.  More detail on district headcount broken down by school, including the number of full-time equivalent personnel supplied as part of vendor contracts for lunch aides, custodians, special education aides, and other staff and consultants.

3.  A report that shows by school the ratio of staff to students, for all student-related services, including nurses, child-study teams, special services teachers, librarians, guidance counselors, social workers, student assistance counselors, etc.

4.  Reasonably detailed implementation schedules (“project plans”) for all major initiatives like curriculum and training for the Common Core and PARCC assessments, rollout of Singapore Math, etc., so that parents know when and how the training of their children’s teachers will occur, when any related technology will be installed and the schedule by which it’s expected to be incorporated into specific aspects of instruction. Such public implementation schedules are typical in many school districts, with more detailed internal versions helping administrators manage and coordinate such efforts. Such schedules provide a way for everyone to know whether efforts are on schedule or behind schedule, especially for those involving coordination across departments, like technology rollouts. Such schedules would allow individual staff members more visibility into when they are scheduled to be trained and how much training they are scheduled to receive. That means that no one can reasonably complain until those publicly established expectations are violated, and then the complaint can help to trigger corrective action.

5.  More detail on healthcare expenditures and related revenues, in particular showing the total dollars contributed by district employees from now-mandated employee contributions, and separately, the total of incentive payments for the prior calendar year and the total of premium payments thus avoided.

6.  An always up-to-date 5-10 page summary of the Long-Range Facilities Plan, reconciled to the list of capital projects managed under Fund 30 and to the bond issues that funded them in Fund 40, so that members of the public can judge the effectiveness and efficiency of capital funding and spending.

7.  An analysis reaching back at least 10 years, that depicts how many additional students have resulted from new housing developments and how much additional annual school tax has resulted from those developments, with a computation of whether they have resulted in net financial benefit or burden to the school district.

8.  Together with larger groups of local taxpayers, the Board should lobby Maplewood and South Orange municipal officials to incorporate a formal burden/benefit analysis as part of the approval process for every new residential development up for approval in the future.

Summary

Thank you for your consideration. We anticipate producing an additional memo to describe in more depth some of the additional information requested and to motivate why it would be valuable in increasing public understanding and enhancing the Board’s ability to perform its statutorily mandated oversight role. Please feel free to call or email us if you want clarification on anything in this report.

Respectfully submitted,

Elizabeth Baker
Beth Brock
Steve Latz