Montclair Schools Boast Another Strong Surplus
District has benefited from a drop in health insurance claims.
Just two years after school officials were reluctantly discussing the closure of schools and the laying off of staff, Business Administrator Dana Sullivan outlined what's likely to be another healthy budget surplus this year for the school district.
Although the numbers are still only projections, Sullivan announced at Monday night's school board meeting that the district could wind up on June 30, 2012 with a surplus of $13.9 million.
However, she and others emphasized that the number is misleading.
For example, school officials said that up to $2.5 million is going into a capital reserve fund and up to $500,000 is going into the maintenance reserve fund. In addition, some $4.7 million already has been claimed in the 2012-2013 budget.
The remaining amount, about $3.5 million, is what will be used in the 2013-2014 budget.
"It doesn't mean taxes will come down but it does mean we can spend on education and we likely won't have to raise taxes next year," said School Board Member Shelly Lombard.
"This is all good news in that we can roll over $3.5 million and hold on to what we have in services and not cut anything," she said.
However, she warned, the school board still doesn't know how the ongoing contract negotiations with the union will turn out.
Sullivan summed up the financial picture like this: "The fund balance is projected at $13.9 as of June 30, 2012. $4.7 mill will be used for tax relief on July 1 in the 12-13 budget, $3.0 million will be transferred to capital and maintenance reserves. That leaves a balance of $6.2 on July 1, 2012. $3.5 of that amount will be used for tax relief in the 13-14 budget and $2.7 will be held in reserves as recommended by the State."
Sullivan emphasized that a healthy capital reserve fund serves a valuable purpose in that it provides money for capital improvement projects such as new roofing without bonds having to be sold.
In general, the district is benefiting this year from a $2.4 million drop in health benefit costs due to a lower number of claims. In addition, the district is also benefiting from students returning from out-of-district placements, reducing tuition payments by $900,000. And the district also has trimmed costs in areas such as transportation by $500,000.
Sullivan added that the district has only recently been told that it would receive nearly $2 million in state aid.
School Board Member Norman Rosenblum noted that the goal is to have smaller surpluses in the coming years but with a comfortable cushion.
Sullivan has often explained that the district's "fund balance" is defined as the accumulated difference between revenues and expenditures.
Back in November 2011, Sullivan also had reported one of the largest surpluses in recent memory— $5.7 million—to stunned members of the Board of Education.
She said the money would be applied toward property tax relief as required under state guidelines.
After announcing the huge surplus in November, school board members said at the time that—if they'd known school costs were trending lower than expected—they might have made different decisions during contentious budget meetings in late 2010 and early in 2011.
Indeed, the size of the surplus left over from the 2010/2011 operating budget was nearly double the $3.2 million surplus the district reported the year before.
Previously, residents pleaded, yelled, and cried at the podium during school board meetings, anxious that schools might be closed and that health benefits might be taken away from classroom aides.
(Schools weren't closed but health benefits were taken away from most aides.)
Overall, the school board made more than $3 million in cost reductions to programs, services, and staff to get to a $110 million budget last year.
But, by what school board members said, they might not have made such drastic cuts had they known about the surplus.
"We are surprised at the size of the surplus," said Shelly Lombard last year, who was board president at the time.
"Last year we went through a painful process and lots of high drama," she said. "We might have done things a little bit differently had we known this."
On Monday night, Lombard warned that the district still faces uncertainties such as how much state aid it might get and also what might happen with a new labor agreement being negotiated with the 1,100-member Montclair Education Association that represents its teachers and school employees.
Once again, Jim Zarrilli, a classroom aide at Mount Hebron Middle School, was on hand Monday night to deliver another emotional plea for the restoration of health benefits to aides.
He said that a tragic mistake had been made, a mistake confirmed by the growing surplus highlighted at Monday night's board meeting.
"The clock is ticking for us as we financially bleed to death," he said.
Shelley Emling
9:54 am on Tuesday, June 19, 2012
I believe the discussion of aides' benefits is part of ongoing contract negotiations with the union.
ira shor
10:40 am on Tuesday, June 19, 2012
Has BOE no shame? Does BOE think we're too stupid to see what's going on? Using aides's health care as a political weapon against the union is the BOE's anti-labor strategy, not a two-way "they're talking it over" as Ms. Emling's brief post misrepresents. Have all 7 members surrendered to the anti-tax zealotry which just got voted down in Mtc's May elections? Successive huge surpluses mean BOE has the funds to finance health care and also to begin real improvements like reducing class size which counts the most in student learning and closing the achievement gap, not cosmetically buying new computers in a hurry to pretend they're doing something good. Anti-tax zealots and anti-labor warriors threaten our kids and our property values. Good public schools run by well-treated professionals are what our kids and town need. Unelected and unaccountable, the BOE is free to ignore sound educational policy while foisting unnecessary conflict and ruthlessness on this civic town.
Shelley Emling
10:52 am on Tuesday, June 19, 2012
I've had to remove one comment today for being a personal attack.. I don't wish to remove more. Please stick to the issues and dispense with the name calling. Thank you.
Montclair's Own
11:17 am on Tuesday, June 19, 2012
Mr. Shor,
Well-said. Couldn't have said it better. All of this talk of "uncertainty" still, even after a $13.9 million surplus? Sounds like scare-tactics again. This is what happened last year. And as the union gives more in health, the district will see more and more money. Will they restore benefits for aides? Probably not. Will they bargain in good faith? Never.
Montclair Public
1:22 pm on Tuesday, June 19, 2012
It was my comment that was removed, and the fact that it was represented more evidence that some (read: school board members and other tax-cut zealots) are more protected on this site than others. The unilateral cutting of the aides' benefits was a low point in this town's history even before the discovery of the now-plural surplus -- after which it can be called an utter disgrace. To say it is part of the ongoing negotiations is to buy the board's strategy of laying its duplicity at the feet of the union. At a time it will offer no raises while state law demands (not unreasonably, i would add) that teachers pay more for health care and pension and after the union has already given back substantial amounts, the board will blame the union for not willing to give even more to cover the aides. While the benefits expenditure would only cut into a small percentage of the surplus. If you want to stick to the issues, how about an honest appraisal of them?
A. Gideon
2:51 pm on Tuesday, June 19, 2012
"$2.7 million of it would be set aside in an emergency fund"
This is not quite correct. The idea of an emergency reserve was presented, but Ms. Sullivan recommended against putting money into this kind of reserve. Rather, up to M$2.5 is going into the capital reserve and up to M$0.5 is going into the maintenance reserve. These amounts are "up to" because the school year's books are not yet closed or audited.
Each of these reserves is a hedge against future need, but the capital reserve is the most interesting for me. Money will be used from this reserve before any more bonding occurs, or at least this is the idea. That translates to less debt and less money spent on interest. This seems like a Good Thing to me; we've too much debt and are spending far too much on the cost of that debt already.
...Andrew
Shelley Emling
2:59 pm on Tuesday, June 19, 2012
You are right Andrew.. am going to change the wording on that now..
A. Gideon
3:01 pm on Tuesday, June 19, 2012
"$2.7 will be held in reserves as recommended by the State."
I think I'm grasping the source of the confusion around the M$2.7. This is the amount of surplus that the district is permitted to carry on the budget. It is 2% of the budget amount plus a few other factors (eg. state aid received after the budget was closed).
It's not the same as a reserve (such as the capital reserve or the maintenance reserve), but I admit that the distinction can seem unimportant as it is money that exists against a possible need.
Note that M$2.7 is the maximum amount we're permitted to carry. We could carry less than this.
...Andrew
Lynnell Hancock
3:22 pm on Tuesday, June 19, 2012
I urge every Montclairian who cares about the future health of this town to pay close attention to the shell game that is going on with our current school board. There are millions to spend -- more millions than the board seems able to count. And yet, the jewel of our town -- our public schools -- are being gutted. I can't imagine that any of us wants our school system to crumble into mediocrity. But right now, the budget cuts are causing completely unnecessary pain to our children. Libraries are depending on the kindness of volunteers -- librarians have been fired. Spanish classes have been axed. School aides, essential educators for our neediest children, are being treated like temporary Walmart employees, stripped of benefits. All this spells erosion of quality. We will end up what we pay for. Is that what we want? While 13.9 million dollars goes unspent? I hope the next mayor will take charge of this travesty, depose the current board president, and reverse the damage before it's too late. LynNell Hancock, 20-year homeowner, grandparent of a 3rd grader.
A. Gideon
3:40 pm on Tuesday, June 19, 2012
"While 13.9 million dollars goes unspent?"
While there might be some merit to the "we're not spending properly on the schools" position, how can we know if proponents misstate - deliberately or through lack of understanding - the amounts involved? There was M$13.9 in an account on one day. The next day it was about half that. And of that remaining half, much has already been spent even if the cash hasn't been paid out yet.
I urge people interested in this to actually study the BOE budget books. Once the materials presented by Ms. Sullivan yesterday evening are on the web site, review these (I plan to; a glance at a projected screen is not enough time to grasp that array of numbers).
I'd an interesting epiphany while reading these:
http://www.nytimes.com/2012/06/19/us/to-avert-liability-washington-town-drops-helmet-laws.html
http://www.nytimes.com/2012/06/19/opinion/nocera-when-alec-takes-over-your-town.html
which show examples of what can happen to a town driven to - or past - the financial brink. Given our debt, and what we spend on interest - tax revenue we cannot spend on services - I fear that we may be aimed at that direction.
But as the second article claims, some may want it this way. Is Montclair to be deliberately driven into bankruptcy so as to serve some GOP agenda?
When we hear cries of "spend spend spend" and "debt doesn't matter", we need to take into account the matter of who wins as our indebtedness grows.
...Andrew
ira shor
6:13 pm on Tuesday, June 19, 2012
Mtc soundly rejected the anti-tax crowd in the May elections so why is the BOE still on the anti-tax warpath? BOE is out-of-touch and out-of-step when it puts cutting taxes first and educating children last. Unbelievable--BOE piled up yet another huge surplus after promising solemnly last year to not let it happen again--and here it is again, millions unspent while BOE fakes a budget crisis to fuel its labor war, playing politics with the aides's family health care. (Remember what happened when Komen played politics with women's health care.) Our town is not on the fiscal brink as the honorable Mr. Gideon suggested; the TC threw money at Wildwood and blew $1mil to beautify one business street downtown; no cash crisis when business cronies want something from the TC, just take it away from the kids and teachers and aides in our public schools. Surplus millions should go to reduce class size if BOE was serious about closing the achievement gap and knew how to use dollars to make a difference in learning outcomes. The new mayor should remove this BOE and appoint 7 civic-minded education-oriented people who understand how crucial good public schools are to our kids and property values.
What I See
8:40 pm on Wednesday, June 20, 2012
Thank you, Mr. Shor and Mrs. Hancock, for your support. It's very difficult to live in this town, pay property taxes, and live without medical insurance. Hopefully, the negotiations will restore our health benefits...
Stuart Weissman
8:43 pm on Tuesday, June 19, 2012
"Mtc soundly rejected the anti-tax crowd in the May elections so why is the BOE still on the anti-tax warpath?"
I heard somewhere that Montclair's debt is the 5th highest in the state. Is this true? The election might have stifled the realists, but time may just stifle the spend until the state takes us over crowd.
Montclair Public
1:07 am on Wednesday, June 20, 2012
The former school president loves to tell us how important it is to preserve diversity in Montclair, as if the decrease in African-American residents is solely related to the taxes and has nothing to do with the housing price wars of a few years ago. But along with racial and economic diversity comes the obligation to meet its challenges. As Mr. Shor points out, the achievement gap will not be closed by putting huge surpluses over smaller class sizes. Montclair's reputation for public education will not be served by treating educators like enemies and squeezing FULL-TIME aides to the point of creating an unhappy (and transient) work force. No one is asking the BOE to run up debt. Just invest what it has in children and educators. Said this before and I'll say it again. If the board members want to please the tax-cut zealots so much, get off the damn board and run for mayor and town council in 4 years. Want to serve on the school board, put education first, and that includes a cooperative working relationship with those who serve our children.
Montclair Public
1:08 am on Wednesday, June 20, 2012
pardon, school board president
june
9:09 am on Wednesday, June 20, 2012
The school system in Montclair is a joke, highly over rated and the high school is one of the most ghetto schools I have ever seen. I pay taxes here but was forced to pull my son out and put him in a private school because of the bullying, torment, leaky ceilings in geometry class and just overall bad attitude that prevails in this school system. There are countless kids who do not belong in this school system, who's parents don't live here. So you say surplus, get rid of Dana Miller, and the whole bunch if they are still there. White Montclair has busing black Montclair does not for high school students. Give some of that to parents who's children are forced to ride the NJ transit buses to school. I cannot wait to put my for sale sign up in this town. Teachers who don't have any kind of control over monsters who roam the hallways picking on other kids. Perhaps hiring a security team for the animals that go to that high school. Implement a dress code... Montclair high school is a hot mess. We need a new high school, not more middle schools. I notice also that the ratio of black kids to white in the brand new school is quite unbalanced. More white than black. Teachers who are in the Glenfield school and other middle schools who are tenured and terrible. Montclair is making sure that they get rid of all of the black principles and are trying to change the tone of the area. Surplus for who the staff of the BOA, not with my tax dollars!
A. Gideon
9:15 am on Wednesday, June 20, 2012
"Our town is not on the fiscal brink as the honorable Mr. Gideon suggested"
We are already spending roughly 1/5 of our tax money spent on interest. That's a lot of money not spent on services for/to the town. When interest rates rise, this will get worse. If we see future downgrades of our debt, this will get worse.
But as I wrote above, it seems that some want to drive the town past the brink of financial insolvency, as this would permit them the opportunity to push their agenda.
"the TC threw money at Wildwood and blew $1mil to beautify one business street downtown; no cash crisis when business cronies want something from the TC"
This logic is flawed. If someone spends themselves into debt and beyond, would we use the excessive spending as proof that they're financially sound? Citing irresponsibility on the part of the council as justification for irresponsibility elsewhere is more than a little silly.
...Andrew
Mara Novak
4:23 pm on Wednesday, June 20, 2012
I am very confused by this comment:
"But as I wrote above, it seems that some want to drive the town past the brink of financial insolvency, as this would permit them the opportunity to push their agenda." Who, and what agenda?
Also confused by this:
When we hear cries of "spend spend spend" and "debt doesn't matter", we need to take into account the matter of who wins as our indebtedness grows.
No one has said anything really like this--including all three Council slates and even the honorable Mr. Shor, who is pointing out that our tax dollars should be used responsibly.
Andrew, saying such things is just creating straw man arguments--pointless to argue.
Montclair Public
11:13 am on Wednesday, June 20, 2012
what's your point, Andrew? Starve the school system, gut the one thing that is supposed to hold the community together. You're arguments always seem to lack nuance, along with compassion and in the end common sense. No one here is denying mistakes haven't been by governments past or arguing for greater debt. We are decrying the heartless punishing of low-paid teacher aides, the finger-pointing at public workers, the eagerness to withhold money that will allow children to learn and uphold the reputation of the schools. stop lumping every expenditure into the same argument.
Townie
3:03 pm on Wednesday, June 20, 2012
@Montclair Public I find Andrew's comments among the more insightful on these public boards. Almost every expenditure can be justified in isolation and Andrew helps provide context.
@June You clearly have a bone to pick on behalf of your child and this is completely understandable but the vitriol in your post undermines any potential empathy.
june
4:14 pm on Wednesday, June 20, 2012
Not looking for apathy, looking for change. It galls me to have move here seeking solace, unity, and find only problems and a school system that is in turmoil. Montclair is known for it's school system, perhaps 20 years ago. My son is long gone from the system, but my taxes are still here and growing. I am not looking for answers from other town members, for you were not there when we needed you. I just look at all these children committing suicide, and am thankful I had the ability to remove my child. I think the old BOA needs a overhaul, there must be a better way to do this.
A. Gideon
4:18 pm on Wednesday, June 20, 2012
"You're arguments always seem to lack nuance, along with compassion and in the end common sense."
That seems an odd assertion, in that I'm arguing for sensibility in spending. I will admit that I weight compassion for the students, and then the families living in town, above that of compassion for the staff of the school system. The system exists to serve us; not the other way around.
This shouldn't be seen as any sort of criticism of the staff. For the most part, I've a great deal of respect for them. Simplistically: how can one have a school w/o teachers? Still, in a world where priorities are necessary I'm prioritizing the welfare of the students over that of the staff.
For one interesting example of priorities, look to Ms. Sullivan's presentation at the last BOE meeting (which I assume you attended given your interest in our schools). Recall what she said about savings resulting from reduced health costs. That's money that can be spent in various ways on education. That's money that doesn't have to be taken from families so financially pressed that they're looking at leaving town.
Maybe it'll mean another librarian or two. Enough steady-state savings might even translate to restoring foreign languages at the elementary level. This is far from "gutting" the schools.
[Continued]
A. Gideon
4:19 pm on Wednesday, June 20, 2012
[Continued]
Admittedly, this isn't as simple a choice as this brief note implies. Benefits play a role in our attractiveness as an employer, which in turn has an effect upon the quality of our staff. That clearly also impacts the students.
Had we seen a sudden drop in our ability to hire aides, or in the quality of the aides that we're hiring, I might be making a different choice. But nobody appears to be making that claim.
I'm sure this seems to lack compassion to you, and I can certainly see your point. I don't particularly like being in a position where these types of choices have to be made.
But given that the choice does exist, is it really so hard to choose the children over the staff?
"No one here is denying mistakes haven't been by governments past or arguing for greater debt."
People arging against moving money in the capital reserve are arguing for greater debt.
[Continued]
A. Gideon
4:21 pm on Wednesday, June 20, 2012
[Continued]
"to withhold money that will allow children to learn and uphold the reputation of the schools. stop lumping every expenditure into the same argument."
In fact, I do not "lump" expenditures; this appears to be more your side of the argument. If you can show that benefits for the aides plays a role in education commensurate to the cost, I'll be on your side. As I wrote, though, that's not the argument being made. Instead, we see strawmen about "pointing fingers", "starving the school system", "gutting" the schools, "heartlessness", rhetoric about "anti-labor" and "anti-tax", misrepresentations of surplus and fund balance, and so on.
...Andrew
[Finally not being continued]
A. Gideon
5:07 pm on Wednesday, June 20, 2012
"No one has said anything really like this"
People have argued precisely that. For example:
"Mrs. Lombard's BOE refuses to spend the money it has on what our kids need most, a shameful choice in a town this smart. High-quality schools bring families to Montclair willing to pay high sale prices and high taxes for the sake of their children's educations."
This is a request for greater spending funded by higher taxes. I admit there's even a certain logic to it, but it would further the process of turning Montclair into Just Another Wealthy NJ Suburb.
As for politicians and debt, please see the debt-related proposals on http://www.montclair2012.com/financial and http://www.realprogressmontclair.com/fiscal-priorities.html and compare. One actually proposes reducing debt-funded spending. The other does not. That's telling. One can discuss debt reduction as long as one likes, but as long as there's a steady stream of debt-funded spending little can change. One might as well exercise well on a steady diet of chocolate chip cookies.
[I believe that For Montclair also took a realistic approach, but that site is unavailable at the moment.]
[Continued]
A. Gideon
5:08 pm on Wednesday, June 20, 2012
[Continuing]
"what agenda?"
One might be, as I wrote above, turning this into Just Another Wealthy NJ Suburb. A lot of property owners - both of us included - could benefit from this. Yet it is not my preference.
Another might be forcing Montclair into insolvency, which provides an excuse to nullify all contracts and agreements.
I don't pretend to know all the possible agendas of special interest groups in town, but those articles sounded far too much like possible futures for us.
...Andrew
Montclair Public
4:08 pm on Friday, June 22, 2012
"I'm sure this seems to lack compassion to you, and I can certainly see your point. I don't particularly like being in a position where these types of choices have to be made."
And there is where your argument goes off the rails. The sheer size of the surplus(es) demonstrate that this particular choice didn't have to be made. There is no time like stressful times when our character and compassion are truly measured. The board failed miserably when it grabbed for the lowest hanging fruit and punished FULL-TIME aides making low salaries and working with our neediest children. You say you put the children ahead of the educators. Self-serving pap. In a well-functioning school system, prioritizing children and respecting educators are inextricably tied. As I have said many times, I do not believe asking teachers to pay more into pension and health care is unreasonable, long as it is achieved through honest collective bargaining. what the board did unilaterally to the aides was heartless, unnecessary and revealing of those who executed it. I know one thing: none of those board members would do that to a member of their own family. Shame on them and on you for excusing it.
Montclair Public
4:10 pm on Friday, June 22, 2012
I meant to asking teachers to pay more into pension and health care is reasonable.