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Montclair School District Nets $13.9M Surplus

Auditor warns that future surpluses will not be so abundant.

 

The Montclair School District’s balance sheet will end the year well in the black.

A financial audit report presented to the Board of Education on Monday by Nisivoccia LLC, a certified public accounting firm, found that the district will close the year with a surplus of $13.9 million. 

The large surplus was the result of conservative budgeting, cost cutting and a host of unanticipated funding, said Raymond Sarinelli, CPA and partner of Nisivoccia. 

The district operating costs are lower than they have been in years. Last year’s total costs were about $118 million, which is down from $120 million in 2011, $136 million 2010, $128 million in 2009, and slightly up from about $116 million in 2007-8. 

“The costs of operating the district have been reduced,” said Sarinelli. “The district basically operated in 2012 more at the level of 2007 and 2008.” 

The district banked $230,000 last year from utility costs due to a warmer than usual winter. Another $1.9 million was the result of lower health costs due to eliminating aides from the health plan and cutting other positions. 

Many special education students were also brought back to the Montclair schools last year after the district began providing those services. As a result, the district saved $1 million in tuition costs and an additional $150,000 in transportation costs.

While the district may end the year with this surplus, much of it has already been set aside for future purposes.  

The district’s state mandated emergency fund is $2.9 million, and another $5.7 million will be used for educational expenses in the 2012-13 school year. Capital projects will be funded with $1.5 million from the surplus, and the district’s Maintenance Reserve Fund will take another $500,000.  

The district will also use $3.2 million of the surplus in the 2013-14 school year, which MacCormack noted will help tax payers   

"Therefore, we will have to raise $3.2 million less in taxes than we would have otherwise,” wrote MacCormack in a press release. 

The district was also overcharged by its food service provider, Chartwells, and is owed approximately $395,000. Sarinelli noted that these funds were not originally budgeted for, so they will contribute a one-time boost to the budget when they are recovered. 

“They know they owe you money,” said Valerie Dolan, principal of Nisivoccia, about Chartwells. 

“I believe a significant amount of that amount will be recovered in two years,” said Sarinelli.  

While the district has a high surplus now, Sarinelli warned it will not be a yearly theme.  

The board will now anticipate many of these surplus funds and thus allocate them in the future, such as the $1 million saved in transportation and another $700,000 in extraordinary aid.  

“Next year, ... your surplus is going to start to go down, and will continue to go down because you’ve taken action to make it go down,” said Sarinielli. 

The board must budget differently in the future so as not to “crash and burn,” said Sarinielli, by relying on an unanticipated surplus. He expected future budgets to level out at about $2.5 and $3.2 million. 

tryintosurvive December 19, 2012 at 03:19 AM
The district will also use $3.2 million of the surplus in the 2013-14 school year, which MacCormack noted will help tax payers "Therefore, we will have to raise $3.2 million less in taxes than we would have otherwise,” wrote MacCormack in a press release. Does this mean that $3.2 million will be sent to the town and taxes will be reduced by $3.2 million or does it mean something else?
QBY33 December 19, 2012 at 12:56 PM
Yet the aides who got their benefits cut are going with out Dr appts and healthcare. Great decision BOE! Let people who work hard suffer. I bet there is no surplus in the aides bank accounts. As a matter of fact I bet there is a huge deficit for the ones who took Cobra at $1200 a month (which runs out in February). Shame on you!
Montclair Public December 19, 2012 at 01:17 PM
I don't know how those board members look at themselves in the mirror. They never had to take those benefits from FULL-TIME aides entrusted with our district's neediest children. They lied continually about their intentions when there were opportunities to restore them even after the surplus was revealed last year. Lombard, that bean-counter, was the worst.
Townie December 19, 2012 at 02:34 PM
I've got a different take on the aides, which is that they've been largely ineffective, and that their supervisors long ago realized there was nothing they could do to improve their performance. Many were also short-tempered, and were working with a subset of students who require even temperaments. So it was like that, now and then they'd make copies, but mostly they'd occupy space.
Montclair Public December 19, 2012 at 04:53 PM
well, i would say, based on the fact that i know many aides personally and dealt with an abundance of them while putting my children through Montclair schools, that you sound like someone who gets his/her information on the bar stool at Egan's or over lunch in the Uptown Cafe. You sound like those in this town who would sell out anyone to save $50 on their taxes, without considering the injustice and harsh consequences. If that sounds harsh, then so be it. People -- our neighbors in town and out -- have been forced to suffer for no reason at all.
Montclair Public December 19, 2012 at 04:58 PM
and the more I think about your comment, Townie, the angrier it makes me. I am sick -- we should all be sick -- of the Romneyesque mentality now commonly used when folks need to rationalize. Question the integrity of the less fortunate; they don't deserve it because they want something for nothing. You'd be the first scream bloody murder if someone used the same subjective argument is taking something precious like health care from you.
Robin Hoffman December 19, 2012 at 05:54 PM
My older son had shared use of an aide from first grade through third, and each one was incredibly hard working and caring. They went above and beyond. The comment about them standing around making copies, being quick-tempered seems like it comes from some alternate reality. Volunteer at a school when you can. You'll see how critical they are in the classrooms.
ira shor December 19, 2012 at 05:55 PM
BOE should be ashamed to run yet another enormous surplus while our essential aides lost health care and our kids' classes are way too large. Seems that there is no budget crisis and never was one, no matter how loud frmr BOE chief Lombard trumpeted false warnings. Aides are of great help to tchrs in the classroom, esp now with ballooning class sizes and in-district return of ood spec ed. With too many kids in each classroom, and with many new spec ed kids back in district, aides and small classes are the way to scale up achievement in schools. BOE and TC have been hostile to kids and families in this town, no matter who gets elected or who gets appointed. Big classes mean less developmental attention for each child; the less attention, the less the social and cognitive growth; most impt for child dev is interaction with quality professionals in schl. Small classes have biggest impact on k-3 and on lower-income kids, accelerating their development, research tells us. There is no research confirming testing as a road to high achievement. All the testing-advocates who smugly declare they are data-driven conveniently ignore the data on smaller classes. The cynical attack on public schools and the public sector in Montclair continues while private developers are awarded more subsidies and waivers to continue over-building this town, the TC and BOE throwing millions needed by the schools into the bank accounts of feckless developers who seem to count more than our children.
Townie December 19, 2012 at 07:28 PM
I'm not happy to hear about anyone unable to get health care. That we don't have universal coverage for all our citizens is a moral failing. The aides who were let go presumably showed up to work every day and were not looking for a handout. They also did not have guaranteed lifetime tenure. My observation had nothing to do with their integrity, it had to do with their performance and the value they added, directly observed over many years when my children were going through the public schools. There were exceptions and I hope these people were spared the axe. I'll please respond to other points raised. One is that I think it is easier to be an aide in a lower grade as younger children are less disruptive. When my kids were very young our experience with aides would not have led me to my present conclusion, but now with over 40 "student years" experience, I've seen more. And, I agree smaller class sizes is the direction to reach for, however, putting a relatively useless aide in a class doesn't halve the class size. Finally I'll say that we should feel comfortable disagreeing without maligning one another or using caricature to bolster our points. (I'll now descend from my pulpit, not my barstool.)
Montclair Public December 19, 2012 at 08:03 PM
no, townie, you need to be maligned because you attack the integrity of an entire working group with generalization and without providing a shred of factual evidence. BOE and any school principal has had the power to dismiss any aide because, as you said, they do not have tenure. Some no doubt have been fired for poor performance; law of averages. The majority -- and many who have served the children for decades -- have given more of themselves than you can imagine, or want to imagine. as for your silly assertion that it's easy being an aide in a lower grade, try it sometime. see how long you last.
Townie December 19, 2012 at 08:39 PM
This is an anonymous public blog, not a court of law. We are each expressing opinion without offering evidence and are each entitled to our opinion. In short order I've been associated with barhounds, wealthy lunch patrons, self-centered anti-tax misers and Mitt Romney and advised that I only have standing to offer an opinion if I leave the alternate universe I inhabit and gain direct experience in a field in which I must have no experience. I'll make no assumptions about anyone.
Adam December 19, 2012 at 09:53 PM
The Unions sold them out. They could have renegotiated the contracts, but chose not to. It is our new reality.
Mara Novak December 19, 2012 at 09:59 PM
When I read this: “The Fund Balance at the end of June 2012 was $13.9 million”, followed by this: “The district also saved … up to $1.9 million in health insurance costs and $1 million in bringing Montclair special education students back from other districts.”, I can only think of the teaching aides, especially those who work with special education students, who no longer have heath care because their jobs were reclassified as ‘part time’ while continuing to work exactly the same hours. COBRA benefits are about to end for those dedicated aides who still work for the district. I sincerely hope that the BoE will restore their health care benefits as part of the on-going contract negotiations. They deserve no less. Mara Novak
frank rubacky December 20, 2012 at 02:15 AM
FWIW, All of the annual Total Cost numbers are totally wrong.
Montclair Public December 20, 2012 at 02:49 AM
Townie, my only advice if you don't like being critiqued and categorized is that you think before doing the likewise to an entire work force.
Full disclosure December 20, 2012 at 01:51 PM
Mara - Normally, when writers report on a subject they interject with a full disclaimer representing their own interests to the reader. Do you or an immediate family member have such an interest in teacher aides/health benefits in the Montclair BOE?
Esther December 21, 2012 at 02:07 AM
Hi there Townie- Here's a question for you. When was the last time you were in a classroom in Montclair? Here's another- When was the last time you talked to a teacher in Montclair and bothered to ask what the role of an assistant is? You know not of which you speak otherwise you wouldn't have said such thoughtless generalized inaccurate thoughts.
Esther December 21, 2012 at 02:12 AM
Don't quite know what Romney has to do with this.......Romney pioneered statewide healthcare as the governor of Massachusetts. And I don't think assistants think of themselves as the less fortunate. The fact is that the board is made up of short sighted narrow minded thoughtless miserly people who probably all have healthcare from their employers or the cost of their premium is reimbursed or they have no financial problems paying their premiums...but chose to balance their budget on people who faithfully served this district for years and years. This decision was disgraceful- ESPECIALLY since they had a surplus for the year they cut the insurance and again this year the year after they cut the insurance. They should all be ashamed.
QBY33 December 21, 2012 at 02:14 AM
Full disclosure and Townie....everyone in this town should have an interest with the TA's benefits. It's just WRONG that they don't have them. Did you know they spend more direct time with the children than anyone else in the school building? They are often in charge of the children on the play ground and in lunch. We trust the lives of Montclair children to them and they deserve health benefits. Have you ever seen what a one on one aide does throughout the school day with our special needs students? If you haven't then go ahead and volunteer to shadow one someday...I bet anyone who doubts they deserve health benefits would change their mind within the first hour!
Esther December 21, 2012 at 02:18 AM
So let me get this straight. You "observed" assistant who were not doing their job- and you say that it had nothing to do with maligning their integrity. Hmmm-that's not what I get from your comment. And if in fact there are assistants not doing their job you truly think that the punishment is to take away all of the assistant's HEALTH insurance? Your comments are disjointed and make no sense. What does tenure and class size have to do with health insurance? NOTHING. at all.
Esther December 21, 2012 at 02:19 AM
You got it MP-
Esther December 21, 2012 at 02:21 AM
Maybe she's just stating the facts as she knows them-nothing said by Mara was not a fact. Just saying- and she wasn't reporting she was answering a post just like you.
frank rubacky December 21, 2012 at 03:43 AM
You know what's wrong. That the auditor said Montclair Schools spent $136MM (ONE HUNDRED AND THIRTY SIX MILLION) in 2010-11. That is $20MM over the baseline and $26MM over "the budget". In one year, they spent more than the Police Department...or our debt carrying costs...or 13 Pre-K schools..or.. And the surplus, Tryintosurvive, you not only will not see a dime of it, but you will see an increase in your school levy. So, yes, one can make an argument for the aides and their benefits. But, I can make a far more shameful case of all this talk of over a 10% surplus the last two years the taxpayers in general. Everybody is fighting over these "numbers", but no one is stopping to even look behind the numbers. That is shameful.
Townie December 21, 2012 at 02:07 PM
A number of issues are getting tossed in here and I am at fault, as I misread the initial posts which were about presently-employed aides. I had misread this to refer to laid off aides, as my recollection was that the district effectively fired a number of aides a couple years back. I do feel it is unfair to re-categorize positions if nothing else (responsibilities, work hours, etc) changes simply to avoid some expense.
frank rubacky December 21, 2012 at 04:06 PM
What interesting to me about these surpluses is that they have steadily & quite significantly increased since 2003: - from 1997-2004, the average schools surplus was $1MM - from 2005-2012, the average schools surplus was over $7MM. - the % increase in schools surplus for from 2005 to 2012 was 700%, going from $2MM in 2004 to $14MM in 2012. I have not bother to align this with the increase in the schools portion of the tax levy or the capital expenditures. Maybe the new BOSE and CFAC will.
Mara Novak December 21, 2012 at 05:09 PM
"Full disclosure" (that's a joke, right? haha), I responded to a post on a blog and signed my real name. More than you were brave enough to do.
Mara Novak December 21, 2012 at 05:10 PM
Townie, thanks for your thoughtful reread and comment. Mara
esther December 23, 2012 at 02:58 AM
Maybe...if there is so much surplus- the board isn't spending the money in the right places. Large class sizes? unnescessary- poor and out of date computers? unnecessary- no health insurance for assistants - unnecessary. Too many leaders in central office? unnecessary! just wondering
QBY33 December 23, 2012 at 06:43 PM
YOU got it esther!
esther January 13, 2013 at 03:04 AM
Why oh why don't we elect our school board members? Why oh why don't we vote for the budget? This has never made sense to me. Aren't we supposed to vote for our officials so they represent more than just the mayor's point of view?

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