Milford School District Holds Public Workshop

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Screen Shot 2015-05-05 at 6.36.02 AMBy Terry Rogers

On Wednesday, June 17, Milford School District held a workshop open to the public to discuss ways that they may reduce the budget shortfall they are experiencing in their operations budget. Dr. Phyllis Kohel, Superintendent, and Sara Croce, Chief Financial Officer, explained the deficit as well as the possibility of adding a match tax in an effort to reduce the amount of the budget shortfall.

“We have been in deficit spending for three years,” Dr. Kohel explained. “Over the past two years, we have been able to cut approximately $1.2 million from the budget. Those cuts were at the expense of programs we did not want to have to cut. Luckily, we have not had to cut any curricular daily programs. Last year, we cut 15 assistant athletic coaches at the high school, leaving our teams very undermanned. This year, we had to cut extra-curricular programs, like Odyssey of the Mind, Math Club and things that happen outside of school hours. Our cuts will sustain the district through 2019 as long as no major things occur, but it means we cannot bring those programs back.” Dr. Kohel explained that the operations deficit had already cost the district good teachers as four had given their resignation, two taking jobs at Cape Henlopen and two at Indian River. She said that Indian River had been able to give 15 percent raises to teachers over the past three years, making it harder for Milford to compete with those districts.

Dr. Kohel said that she will recommend to the school board that they go back out for an operations budget in October. A referendum for operations and a new Middle School failed in March 2014 and one for operations and a new High School failed in May 2015. Dr. Kohel said that they understood that the district needed to do a “lot of work with the community” before they can request any type of school building, but that increasing operations revenue was crucial to keeping the district solvent.

Ms. Croce explained the budget cuts at a recent school board meeting which included limited contracts for the Middle School band and chorus teachers, although it did not eliminate those programs from the schools. She explained that, in 2006, when Milford residents passed a referendum for increased operations, they had eliminated the capitation tax and the match tax. A match tax does not require the district to go out for referendum which provides funding for specific areas, such as technology and specialists. The maximum amount that can be collected by a district with match taxes was $350,000, which does not fill the current budget deficit, but would lower it significantly.

“A capitation tax would need to be approved by a referendum,” Ms. Croce explained. “In the past, Kent and Sussex County used DMV records to determine who should be taxed in the district. They no longer use that information. Now they use property records to determine capitation tax. But, again, to reinstate a capitation tax would require us to go back out for referendum, so only the match tax could be implemented without asking the voters for approval.” After the presentation by Ms. Croce and Dr. Kohel, the floor was opened for comments and questions from the approximately 50 residents who attended the meeting.

Patti Persia, a real estate appraiser and leader of the Milford Historical Preservation Committee with DMI, asked what it meant when the district said that the state would come in and take over the school district if an operations referendum was not passed. Ms. Croce explained that a Financial Recovery Team would come to the district and take over all financial decisions. She said that the district had requested one member of the team to come to the district voluntarily to see if there were areas the budget could be cut that they may have missed.

“He said that the only option we had as a district was to pass a referendum,” Ms. Croce said. “When the state came to Christina, they had a lot of positions that were paid 100 percent out of local funding. Those positions were eliminated. We don’t have that in Milford as every position we have from custodian to secretary to teacher to administrator is authorized through our student count, which means we only pay 30 percent of those salaries. Eliminating positions will not really make much difference in Milford because so little of their salary is covered by local monies.”

Rosemary Connelly, who owns a business in Milford, asked how the district had gotten into the financial difficulty in the first place. Ms. Croce explained that there are a number of factors that led to their current financial position. She said that in 2008 and 2009, when the economy took a downturn, the state made substantial cuts to the education budget as did the federal government. She said that the district had lost over $3.4 million in funding over the past few years that were absorbed at the local level. Ms. Croce pointed out that the district had not requested an operations referendum since 2005 and that they had been sustaining those cuts through their contingency fund, but that fund had now dropped dangerously low.

“During good times, we actually saved money,” said Board Member, Pat Emory. “We had almost $7 million in a contingency fund that we set aside just for this. A good example is the ten percent we had to absorb with bussing. That was $350,000 per year we never had to deal with before, but we have to provide the service to our kids.”

Jennifer Cinelli-Miller, a member of the Citizen Budget Review Board with Milford School District agreed with Mr. Emory. Ms. Cinelli-Miller said that the federal government was providing funding for education which allowed the states to reduce their own expenses related to education. When the federal government stopped providing those funds, the state did not replace them at the district level.

“What Milford did when the Citizen Budget Oversight Committee first started was to take the federal money given to the districts, such as Race to the Top funds, and set them aside,” Ms. Cinelli-Miller said. “That allowed Milford to sustain themselves much longer or we would already be where Laurel was.” Dr. Kohel pointed out that those cuts caused an $18 million shortfall across the state. Former board member, Roland Cohee, spoke up to say that the district knew that funding such as Race to the Top would run out in three years, so the board shouldn’t imply to the public that they were surprised when the government stopped providing those funds.

Dr. Kohel explained that when Milford received Race to the Top funds, they did not add anything that could not be sustained, unlike other districts who added programs and staff they could not fund once the Race to the Top money was gone. Instead, Milford tried to enhance programs they already had so that when the money from Race to the Top was gone, they were at the same position they were before the funds arrived.

A question was asked about the percentage of students who lived in owner-occupied homes and those that lived in rental homes. Ms. Croce said she did not have that information, but Paul Hayes, who taught in Laurel for 30 years and who now lives in Milford, explained that renters pay taxes through their rent and that whether a student lived in a owner-occupied or rented home had no bearing on tax rates.

Several members of the audience pointed out that there was a trust issue between the board and the public, pointing out that it was difficult to put the past in the past. Dr. Kohel said that she knew there were mistakes made by previous administrations, but that there was nothing that the current board could do to change those decisions. Yvette Dennehy, the leader of Buccaneer Tomorrow, a local parent group, who will be sworn in as a school board member in July also pointed out that it was time for Milford to put the past in the past, to learn from mistakes made by previous boards and administrations. She said it was time to look forward, not backward. One member of the audience suggested that the board allowed the old Middle School on purpose in order to force citizens into building a new school.

“Let me tell you something, you weren’t sitting here and I was,” Mr. Emory said. “It wasn’t purposeful by any stretch of the imagination. You can believe that all you want, but that was not the case. The building declined over the years by itself, we did nothing to cause that.”

Jim Purcell mentioned that it was good to see the district reach out to the city for help with the referendum, pointing out that Mayor Bryan Shupe had worked very hard to get the referendum passed. He also said that it may be time for the district to begin looking at foundations and grants that would help alleviate the budget shortfall.

Ms. Croce also showed a pie chart showing what portion of the district budget was discretionary. According to what was presented, the district is only allowed to manipulate less than two percent of their entire budget. All other funding is dedicated to specific expenses.

“It is not like your household budget,” said Renate Wiley, board member. “When you see the electric bill is higher this month, you can say, ‘oh, I can only spend $75 on groceries.’ The board does not have that option with its budget, unfortunately. Donna Evans asked what the new school tax would be if a referendum passed and Ms. Croce said that the tax would be 4.8 percent, up from the current 3.4 percent. Ms. Persia said that property values were starting to rise and as the school district declined, property values would also decline.

Nadia Zychal said that the district may want to create an open suggestion box on their website in order to allow community members to provide ideas for revenue streams, suggestions for improving the district and even volunteering. Mr. Hayes and Mr. Cohee both commented that, although someone could visit the district office for a copy, the entire budget was not available online for people to see. Both felt that it was important to have that information. Mr. Cohee also said that there needed to be more information regarding meetings held.

“The special meeting held a few weeks ago where the board voted for the budget cuts was listed on the website ‘to discuss a financial matter,’” Mr. Cohee said. “What exactly does that mean? No one knew you were voting for those cuts or they probably would have turned out.” Ms. Cinelli-Miller said the proposed cuts were also not presented to the Budget Oversight Committee. Mr. Cohee said that if the board wanted to be as transparent as they say, they needed to be more open about the decisions they made.

Mr. Cohee said that he applauded Buccaneer Tomorrow for their efforts in trying to get the referendum passed, but felt that the board was far too silent. He asked why more board members were not at the Bug and Bud Festival as he only saw teachers, students and parents working at the booth. Another member of the audience asked why there were only four members in attendance at this meeting.

“Because we can’t,” explained Barry Fry, board member. “At the first public meeting for the referendum, we all attended. And the very next day, Phyllis had an email saying that we were in violation of the law. There is a law in Delaware that says any board cannot have a quorum present in one location. So what does that tell me as a board member? That I cannot be in the same room with more than three other board members or someone is going to be pointing fingers.” Mr. Fry also pointed out that there were 3,700 voters for and against the referendum. The next week, less than 600 people turned out to vote for school board members. Ms. Dennehy also mentioned that there were many meetings to discuss the referendum, but fewer than 500 people total turned out to hear the presentation, yet many more than that voted against it.

The board asked those present if they thought adding the match tax would be accepted well and the majority said they felt that if the district forced a tax on citizens, they would lose another referendum in October. The board will vote on the match tax as well as the current operating budget on Monday, June 22.