Despite Increased County Revenue, County Executive Says School System will be “Flat Funded” for FY 2020

Last week Cecil County Executive Alan McCarthy sat down for an interview with Cecil TV that should’ve shocked the county’s education advocates.

Unfortunately, only a few of us have seen it.

I didn’t share it on social media because additional facts needed to be included.

Transcript

[10:34] Cecil TV: So, Cecil County Public Schools is seeking a $6.4 million increase over their FYI 19 budget allocation and, and they’ve said that they would need more like 30 million to be on par with the state averages as far as per pupil funding and declining enrollment and increased wealth in the county will likely lead to less and less money coming from the state. How are we going to keep up?

[11:04] McCarthy: The only way that we can keep up is basically for the county to find ways to generate new revenue. One of the problems is we brought lots of new businesses in, but because they’re in an enterprise zone, they do not generate the tax revenue which they really will anticipate after their time in the enterprise zone is basically expanded. For example, if you were to make a capital contribution wherever you do to improve the property, the county only collects 20% of that the first five years. That’s 25% 20%, per year for five years. And then we get 30%, 40%, 50% in a decreasing scale for them but beneficial for us. Right now we’re in the infancy of this program. So our revenues are not nearly what they will be in a brief 10 year time period.

[11:52] McCarthy: So, without that I don’t really know how we can get more revenue for the public schools because they’re growing their expenses at a far greater rate that we can grow the revenues. 

[12:00] McCarthy: Right, even though they’ve tried to slash funding for example this year we’re basically flat, in terms of revenue. Last year we basically had three or four businesses that refinanced which basically provided to us about $3 million in extra revenue but there’s no guarantee and we can’t count on those things happening every year. So this year we’ll basically will have to flat fund them. I’m going to provide them as much money as I can, but I don’t think it’s going to be anywhere near $6.4, million. 

[12:36] Cecil TV: Right. So the county council was set to deliberate on March. Next Monday March 11, I believe, on, on the county on those schools budget request goes. (Note: the Cecil County Board of Education will vote on its budget for FY 2020 tonight. The county council won’t deliberate on the budget for another or so.)

[12:44] McCarthy: Yes

[12:46] Cecil TV: How do you think that they will do it?

[14:48] McCarthy: I think it will be more aligned with me. I can’t promise what they’re going to do, but I would think that they would…a six point, but it was a 7.6% increase is a huge, huge increase and I mean I can understand your needs, I can their wants. But once again, we have to maintain a balanced budget and the money is just not there without basically totally cannibalizing other departments in Cecil County government.

Did he forget about the tax increase?

What?!? “$3 million in extra revenue” last year?!? The county’s own annual report noted that tax revenue increased $13.8 million in FY 2018 over 2017:

The revenues and transfers in for fiscal year 2018 increased $13,801,818 compared to the prior fiscal year. Primary factors in these results are:

  • Property taxes were more than prior year by $7,681,046 primarily due tax rate increase of $.0500 from $0.9914 to $1.0414 as of July 1, 2017;
  • Income taxes exceeded prior year by $1,295,428 – primarily due tax rate increase of $0.20 from $2.80 to $3.00 as of July 1, 2017;
  • Real estate transfer taxes (recordation taxes and deed transfer fees) increased by $4,473,394;

Granted, that $13.8 million was included in the FY 2018 budget so they might not consider it “extra revenue,” but it is extra revenue all the same.

Check out this math: $13.8 million in tax revenue=$775,000 increase in the county’s “regular allocation” to CCPS in FY 2019

Where is that $13 million?

Somehow county officials keep “forgetting” to tell us where that additional tax revenue is going. It never seems to come up–it wasn’t mentioned at the county town hall on the budget or in this interview and I haven’t read about it anywhere. You think they’d be doing backflips to have the additional funds and shouting from the rooftops that they can finally restore funding to county departments, including the board of education.

But it was never mentioned.

They didn’t decrease taxes for FY 2019, so while they might report that certain tax revenues are down this year compared to budget, that budget was significantly more than the revenue from FY 2017. Below is a snapshot of just the property tax budget:

Property Tax Budget for FY 2019 Compared to FY 2018 Budget and 2017 Actual

Again, where is that additional tax revenue?

Is it in the county’s fund balance that we’ve heard so much about?

Nope. Well, at least it’s not in the line item that some talk about as fund balance:

Also from the county’s annual report for FY 2018: “Unassigned funds of $9,775,539 are down $471,947 from 2017…”

Let’s see:

  • Almost $14 million in additional tax revenue in the first year of the tax increase
  • Only $800,000 in additional spending on education
  • “Fund balance” is down almost $500,000
  • The higher tax rate continued in FY 2019
  • And education is going to be “flat funded” in the second year of the tax increase?!?

It’s not too late–yet!

Email County Executive Alan McCarthy at amccarthy@ccgov.org and Director of Administration Al Wein at awein@ccgov.org and tell them you want adequate education funding in the FY 2020 budget.

While you’re there, ask them if they’re up to date on the Kirwan Commission and its requirements for local education funding. Failure to fund specific initiatives like teacher salary increases and pre-K for all 4 year olds will mean the county leaves state grant money on the table.

What about those Cecil County tax increases?

What about those tax increases?

The FY2018 budget came with tax increases but that money hasn’t gone to education

Note: The articles on this website are my opinion based on my research and observations. I am not employed by Cecil County Public Schools.

County Executive Alan McCarthy took office in November of 2017 and I was hopeful that education funding in Cecil County would increase to adequate levels.

When he presented his first budget that spring–a budget that was proudly touted to be the first in quite some time that didn’t tap into the county’s savings (it’s called fund balance) to cover expenses–it also included tax increases that we were told were absolutely necessary in order to “set the County’s ship aright.

And I supported those tax increases–because I wanted to see Cecil County Public Schools finally receive appropriate funding.

That budget included a meager 1.34% increase in funding for the Cecil County Public Schools operating budget and hardly anything for the long list of projects on the small capital request.

To use a sports analogy, I considered it a rebuilding year.

Yet, when the county executive announced his proposed budget for FY2019 last spring, funding for CCPS was again meager with just a 0.9% increase. An amount that was just above the maintenance of effort, the minimum amount the state will permit a local government to spend on education. (Note: I just recently learned that state law requires maintenance of effort to increase at a certain rate year over year and that failure to do so could result in the state withholding the county’s revenue to cover it. The bottom line: don’t act like the school system should be grateful to receive that increase—the state is forcing you. Thank heavens for the maintenance of effort laws or there’s no telling where we’d be.)

Turmoil over fund balance

Ah, fund balance, we’re always talking about fund balance. Yes, unfortunately, we are–again.

Last February there was heated debate about the Cecil County Public Schools fund balance. In this case, CCPS was asking permission from the county to spend part of its fund balance on several long-needed projects, including a field house at Perryville High School (they’ve only waited 42 years). The county wasn’t funding those projects so CCPS wanted to use some of its savings to cover the costs.

The Cecil County Council had to approve the appropriation which they eventually did but not before dragging CCPS over the coals…for saving money…and spending it on capital projects (which are the county’s responsibility.)

Most of this became a moot point when CCPS was forced to use $1.4 million of its fund balance to cover the FY2019 operating budget that the county didn’t fully fund and the FY 2018 fiscal year came to a close.

New fiscal year, new drama (again, about fund balance)

In August the county decided to release some of the money they’d had in reserve pending the decision on a state court case. And, lucky day, they wanted to spend $1.0 million of that money to fund school entrance upgrades.

Not so fast…

First, they wanted to torture CCPS over their fund balance again…and add strings to the funding.

The county would appropriate the money but only if CCPS agreed to spend their fund balance on additional school entrances.

For several weeks there was back and forth between the county and the school system. Some members of council explained that they’d been told the county should boost its fund balance so they would rather see CCPS spend its fund balance. (The county is responsible for funding CCPS, including the facilities so the county should be funding these projects. In fact, if the county had funded the school system’s capital budget requests for the last decade many of these entrances would’ve been addressed as buildings were renovated or replaced.)

Despite the drama, the funding was eventually approved in September.

“Thou doth protest too much”

All the talk about fund balances got me thinking–how much money is in the county’s fund balance?

Aside from pointing out that the FY 2018 budget was the first in several years that didn’t dip into the county’s fund balance and ominous reminders that the county needs to maintain enough fund balance to keep its bond ratings, I’d seen little discussion about the county’s fund balance. I went looking and found two clips from articles in the Cecil Whig:

“Cecil County’s budgetary flexibility is strong, in our view, with an available fund balance in fiscal 2017 of 14 percent of operating expenditures, or $25.6 million.”

[Standard and Poor’s Global (S&P), one of the bond rating agencies] Cecil Whig, 11/20/17

“According to the FY 2018 financial reports, there is $43.63 million in the county’s [general fund], although $10 million was deemed non-spendable since it was earmarked for the motor vehicle fund advance and to subsidize the sewer fund. After assigning hundreds of thousands in other funds for other initiatives (including the volunteer fire companies’ allocation) and maintaining 10 percent of the FY 2019 revenue budget for “rainy days,” the county has $9.7 million in the fund balance that is unassigned.”


Cecil Whig, 12/15/18

Then I looked at the county’s annual financial report:

S&P, the bond rating agency, noted that the county’s available fund balance was $25.6 million at the end of FY 2017.

If you compare those same lines at the end of FY 2018, the available fund balance was $33.6 million. That’s an increase of $8.0 million in one year.

Cecil County Annual Report for the year ended June 30, 2018

We could get into a discussion about complicated terms like Assigned Fund Balance vs. Unassigned Fund Balance but I look at it as different pockets in the same pair of pants. S&P pointed to the sum of those two lines so that’s what I’m comparing.

Since fund balance isn’t a term most of us use every day, let’s look at something more familiar…

But what about those tax increases?

Again, from the county’s annual financial report:

“…Property taxes were more than prior year by $7,681,046 primarily due tax rate increase…”
“…Income taxes exceeded prior year by $1,295,428 – primarily due tax rate increase…”
“…Real estate transfer taxes (recordation taxes and deed transfer fees) increased by $4,473,394…”

Cecil County Annual Report FY2018

That adds up to a $13.4 million increase in revenue.

Cecil Count Annual Report for the year ended June 30, 2018

And yet this year’s budget drama has started off just like the others I’ve followed:

  • The county executive’s public input session on the FY 2020 budget earlier this month led off with a “budget preview.” That presentation was much like the ones I’d seen before–the state took highway user funds from local governments to the tune of $5-6 million a year, expenses are up, the local economy hasn’t rebounded as projected, etc. I don’t recall any mention of increased revenue but maybe I missed it.
  • The FY 2020 budget currently proposed by CCPS is once again bare bones. Even though it comes with a price tag that is $6.4 million over last year’s budget, $4.1 million of that amount is cost of living and step increases for employees.
  • The state informed Cecil County that its constant yield rate increased slightly which could mean a slight decrease in property tax rates. County officials were quoted in the Cecil Whig as citing the proposed CCPS budget increase as one reason that rate shouldn’t be reduced. Throwing CCPS under the bus in the press again? So early in the budget season?

The actors may have changed but the plot remains the same.

That leaves me to ask–what is being done with that additional revenue?

I supported a tax increase because I evidently foolishly believed the funds would lead to an increase in education funding but I’ve neither seen nor heard anything that demonstrates that to be the reality.

This increased revenue isn’t an anomaly. According to the monthly financials posted on the county website, as of 11/30/18, the county continues to see that revenue.

The perennial question has been “Where does the casino money go?” (and we can talk about that later) Maybe we also need to ask where the tax revenue goes and we need to ask that question of the people who are responsible for it instead of just asking each other in passing.

Advocate for the FY 2020 budget now

The county executive will present his proposed budget for FY 2020 on March 29. Once the county council receives the budget, nothing can be added (the council can increase the budget for education but that increase has to come from some other place in the budget).

I encourage you to email the county executive and his administration during this crucial period of budget preparation and tell them you expect that budget to include adequate funding for CCPS. To share your support of the budget or to advocate for specific parts of the budget, email County Executive Alan McCarthy at amccarthy@ccgov.org and Director of Administration Mr. Al Wein at awein@ccgov.org.

Note: the agenda for the March 5, 2019 Cecil County Council legislative session includes the introduction of a new bill regarding the county’s fund balance. Here’s link to the bill and the appendix.

Cecil County budget timeline

If we wait, it will be too late!

Now is the time of year to advocate for education funding in Cecil County and, in order for your advocacy to be most effective, you need to understand some steps in the process.

Honestly, most organizations are talking about the budget all year long–whether they are measuring success or failure with meeting the budget for the current year or determining budgetary needs for the future, key people within that organization are thinking about budgets year round. (CCPS discusses its current position against the budget at every monthly meeting and the documents supporting the conversation are available to the public in their BoardDocs document system.)

But many decisions for the coming year are being made NOW!


Here’s the budget timeline

Superintendent proposes his budget to the members of the board of education (the group that will have to approve the budget). Feb 6
Superintendent and board discuss any changes that may be necessary.
School system holds a public hearing where the community can comment on the budget. Feb 20
Superintendent presents his final budget to the county executive.
County executive presents his budget to the county council. March 29
County council holds a series of public meetings with every department to learn more about their specific request. April & May
Council holds a public hearing on the budget. May 23
Council votes to approve the budget as originally presented or with changes. June 4
After the county budget is confirmed, the board of education votes to adopt its final budget. June 10
New fiscal year starts and the budget goes into effect July 1


We’re at a critical point in the process

Once County Executive Alan McCarthy presents the budget to the county council, nothing can be added (the council can increase the budget for education but that increase has to come from some other place in the budget).

Our job is to let the county executive know that we support increased education funding in Cecil County. 

He’s an elected official and, while he hasn’t announced plans to run for a second term, that’s certainly a possibility.

We need to let him know:

  1. We expect education to be funded adequately
  2. We will either support him during the election or hold him accountable for his budgetary decisions.

But it’s not as simple as it sounds

The final budget request from CCPS will come with a higher price tag than recent budgets and that number is the minimum the school system needs.

In recent years, the county has funded CCPS at either the minimum level permitted by state law (called maintenance of effort) or just slightly above.

There will be a small but vocal group advocating *against* the school system’s budget. (Truthfully, they want to fight anything that costs money and doesn’t directly benefit them. They don’t grasp that maintaining a thriving community costs money.)

I haven’t even mentioned the capital budget yet.

Your mission, if you accept it, is to contact the county executive NOW.

It is our only chance at getting the necessary funding.

If we wait, it will be too late!

To share your support of the budget or to advocate for specific parts of the budget, you can email County Executive Dr. Alan McCarthy at amccarthy@ccgov.org and Director of Administration Mr. Al Wein at awein@ccgov.org.

CCPS FY 2020 budget Advocate or Else

First Look at FY 2020 Cecil County Public Schools Budget

Advocate…or Else?

Note: The articles on this website are my opinion based on my research and observations. I am not employed by Cecil County Public Schools.

Last week new Cecil County Public Schools superintendent Dr. Jeffrey Lawson presented his first proposed budget to the Board of Education and a typically sparse audience. (To their credit, new Cecil County Council members Al Miller and Bill Coutz were in attendance.)

I’ll be posting more detail as the budget develops but the short story is the proposed operating budget for FY 2020 is an increase of $6.4 million over the FY 2019 budget.

While opponents distort the data any way they can in order to inflame the uninformed, the reality is pretty straight forward.

The increase can be broken into two pieces:

  • Salaries–$4.1 million–Employee cost of living (COLAs) and step increases stipulated in the county’s contracts with various employee groups (teachers, support staff, etc.).

Cecil County Public Schools is the second largest employer in Cecil County (only WL Gore employs more people) with just over 2,000 employees, many of whom are county residents so much of that money gets spent within the county.

CCPS honored those contracts during the darkest days of the recession in order to maintain the quality of its workforce and reduce the number of employees defecting to neighboring school systems. When funding suddenly dried up in 2009 and hard decisions had to be made, CCPS opted to cut over 150 positions in order to continue providing increases for remaining employees.

It’s important to note that the proposed increase includes a plan to cut 12 positions as part of this budget (During his presentation, Dr. Lawson specified that most of the cuts will happen from a hiring freeze that is already in place and attrition as people opt to leave positions at the end of the school year.)

  • Everything else–Even with cuts across various departments, including some cuts that are substantial, and overly optimistic (my words) projected savings, the proposed budget requires additional funding.
    • Some of the bigger ticket items in the budget:
    • $360,000–Other salaries & wages–this includes substitute teachers, overtime, and similar expenses.
    • $190,000–Benefits
    • $800,000–Non-public school programs–Cecil County is required by state law to provide an appropriate education for all students and if the public school system can’t provide the education services students require, the county must pay for those students to attend private schools that provide the necessary services.
    • $400,000–Diesel Program at CCST–Supplies and materials need to be purchased in order to begin offering the diesel technician program at Cecil County School of Technology. I’ve seen a lot of interest in this program since it was announced a few months ago but without this funding and an additional $200,000 in capital funding for the necessary building renovations at CCST, I don’t see how it will happen this fall.
    • $220,000–Transportation–Increased expenses for transporting special education students
    • $330,000–Utilities–Summer heat that extended into the fall meant more air conditioning and the overall cost of fuel is projected to increase.

I could and will go into more detail in future posts but that’s the budget in a nutshell.

Update 3/15/19: CCPS released the video below about the budget.

Bottom line: Advocate…or Else?

For those posting comments along the lines of “The schools need to tighten their belts” and find the money for these increases in the funding they already receive, while your insight is helpful ANY FAT WAS CUT FROM THE BUDGET YEARS AGO. Now we’re cutting into the meat.

Citizens: if you want CCPS to retain and attract quality teachers and staff and/or if you want to see a new diesel program introduced at CCST, you’ll need to advocate for this budget.

Employees: you know better than I do which school systems have not given increases in recent years or are considering that option as part of their FY 2020 budgets, the county needs to hear from you or that could become a reality in Cecil County (again, my words). With 2,000 employees, your collective voices would drown out the squawking of the few persistent malcontents but the county has to hear from YOU.

Budget Timeline

February 12 – County Executive Public Hearing (Citizen Input) 6:00 p.m.
February 20 – Board of Education Budget Hearing, 6:00 p.m.
March 11 ‐ Board Approval of Proposed Budget, 6:00 p.m.
March 29 ‐ County Executive Submits Proposed Budget to Council
April XX ‐ Board of Education Presentation to Council
May 23 ‐ Council Hearing on the County Annual Budget
June 4 ‐ Council Approval of the County Annual Budget
June 10 ‐ Board Approval of the Budget, 6:00 p.m.

Contact the County Executive Now

If we wait to advocate until County Executive Alan McCarthy submits his budget to the County Council, we’ll be too late. At that point, council can only approve the budget or cut it (they can increase education funding but any increase has to be offset by a decrease somewhere else).

To share your support of the budget or to advocate for specific parts of the budget, you can email County Executive Dr. Alan McCarthy at amccarthy@ccgov.org and Director of Administration Mr. Al Wein at awein@ccgov.org.

council wavering on school entrances

Council Wavering on Funding School Security Upgrades

Tomorrow night (9/4/18) the Cecil County Council has its first real opportunity to demonstrate its commitment to school security–and at least one council member thinks the county can’t afford the project.

County Executive Recommends $1.0 Million in Funding for School Security projects

In August, Cecil County Executive Alan McCarthy recommended that the county invest up to $1.0 million to bring the entrances at some county schools up to current security standards. The funding for the project would come from money the county had previously held in reserve pending the outcome of a court case.

The council must now approve the expenditure in a vote that is expected at tomorrow night’s council meeting.

Weeks of Back & Forth

In the weeks since the county executive’s recommendation was introduced, there have been numerous discussions between the council and the administration of Cecil County Public Schools covering multiple tangential topics. But the conversation boils down to this:

The county wants these projects completed (Yay! Progress!) but some elected officials think the school system should fund the project rather than the county (Um, that’s really not how budgeting is supposed to work.)

Your fund balance or our fund balance?

As I’ve written previously, fund balance is the money remaining in the operating budget after all other expenses have been met (apologies to anyone with a background in accounting for my oversimplification). Cecil County and Cecil County Public Schools each have their own fund balances and policies regarding the levels that should be held in reserve.

CCPS, for example, was forced to use its fund balance in several prior years to offset reductions in county funding and has planned to use a portion of its fund balance to fund its FY19 operating budget because the county did not fully cover the CCPS budget request.

Despite these expenditures, CCPS managed to rebuild its fund balance to a level that exceeds the minimum requirement of the board of education’s  policy and in February they went to the county council for approval to use part of that additional money to complete several long overdue projects including the first four secure entrance upgrades, new security cameras in the county’s high schools, a new phone system, and a field house at Perryville High School (*hold your applause on the field house for now because that project appears to be very much on the bubble*). With some consternation, the council approved the request.

Keep in mind: this isn’t the way budgeting is supposed to work but desperate times=desperate measures

Remember, all of these projects are the responsibility of Cecil County and funding for such projects is normally accomplished via the annual capital budget process.

But the county has a lousy track record of funding small capital projects so CCPS made the unusual decision to fund these projects out of its fund balance

The county’s “waning” fund balance?

In an article in Friday’s Cecil Whig, council member Jackie Gregory wrote that the projects should be funded out of the CCPS fund balance because the $1.0 million would be better spent increasing the county’s “waning fund balance.”

The county’s fund balance is “waning?” It’s not sand eroding from the beach–if the county’s fund balance is lower than some would prefer it’s because the money has been s-p-e-n-t.

You might ask–how has Cecil County been spending its fund balance?–that’s the subject of another article so stay tuned.

Reach out to the County Council and tell them to vote to fund school security upgrades

The vote is tomorrow night so time is running out!

  • Email our county council members at jbowlsbey@ccgov.org, dschneckenburger@ccgov.org, gpatchell@ccgov.org, bmeffley@ccgov.org, jgregory@ccgov.org
  • Call the council at +1(410)996-5201
  • Attend and speak at the council meeting on Sept. 4 at the county administration building at 7 PM

Some Facts Before the Public Budget Hearing

Tonight the Cecil County Council will host its annual public budget hearing at Elkton High School. We will see many familiar faces as the usual contingents show up in support of their particular causes–Cecil County Public Library, Cecil County Public Schools, Cecil College, various public safety organizations–and many of us will say essentially the same things we’ve said in previous years.

Tales from Last Year’s Budget Hearing

But there’s always a group that speaks against any funding that doesn’t directly benefit them and they will tell some tall tales. Last year they got up one after the other and told the council how people were moving from Cecil County to Delaware because the proposed tax increase was too high.

I don’t follow Delaware taxes closely but I seriously doubted their claims were based on facts. One thing the speakers overlooked was the fact that school districts in Delaware have taxing authority, a funding source Cecil County Public Schools doesn’t have.

Here’s an example from one of the school districts most favored by home buyers:

The Appoquinimink School District Board of Education has approved a 13.8 percent property tax increase and approved a budget which runs a deficit and cuts programs.
At the same meeting on July 11, the board also approved the designs of the new elementary school and another new building containing a middle school and high school.
Effective immediately, the property tax rate will increase by about 25 cents from $1.8473 to $2.1024 per $100 assessed value. District officials have delivered the tax warrant—which lists the new rate–to the New Castle County government. The property tax bills should be mailed out by the end of this month.
Delaware does have some tax benefits but it’s far from a mass exodus and the speakers didn’t present any data to support their assertions.

Facts to Preempt Other Tales

Based on some of the messages I’ve seen repeated online from this same cast of characters, let’s put out a few facts in advance of the hearing.

Not all of Cecil County Public Schools’ fund balance is available for discretionary spending

Yes, Cecil County Public Schools did end FY17 with a fund balance of $16 million, however, it’s not as if the school system is sitting on a pile of cash that it can spend any way it wants. The use of much of that money is restricted either by board policy (the $5.9 million identified below as “Budget Contingency”) or government accounting standards.
The amount identified as “Unassigned” in the above image has been the topic of much discussion in the last few months as the CCPS board of education voted to use some of those funds for projects including secure school entrances at four schools, new security cameras at all high schools, a new phone system, and *gasp* the long-requested field house at Perryville High School–and the county council approved that designation of funds. Read all about that here

The Governor’s Salary isn’t a Yard Stick for Determining the Compensation of School System Leadership

I’ve seen it repeated several times in the last few months: the new superintendent of CCPS will have a salary higher than that of Maryland’s governor. That statement itself is true–According to this database of Maryland salaries, Governor Larry Hogan will make $175,000. In comparison, the minimum salary advertised for the new CCPS superintendent was $190,000. (Dr. Jeffrey Lawson was selected as the incoming superintendent at last week’s board of education meeting, however, I haven’t yet seen any information about the salary agreed upon in his contract.)

The qualifications for the positions are very different.

A candidate for the governor need only be:

  • at least 30 years old
  • a resident and registered voter in Maryland for the five years preceding the election
There are no requirements around higher education or work experience–just age and residency requirements. Heck, most of us in the room for the budget hearing will meet these requirements.
In comparison, a school superintendent in Maryland must meet the following requirements per state law (COMAR13A.12.04.03)
  • Have a master’s degree from an institute of higher education
  • Have 3 years of satisfactory teaching experience and 2 years of satisfactory administrative or supervisory experience in a PreK-12 school setting
  • Submit a minimum of 24 credits of post-master, graduate coursework in educational administration and supervision to include a balance of coursework in specified areas

While most superintendents meet the requirements to run for governor, current and previous governors don’t meet the requirements to run a school system. At the budget hearing, there will be only a few in attendance who meet these requirements.

Learn & Share Facts–not Fiction

I’ll say it again: Not everything you read online (or hear people say) is true. Choose your sources of information wisely and only share the truth.

What Can You Do to Advocate for Education?

  • Call or email our county council members at jbowlsbey@ccgov.org, dschneckenburger@ccgov.org, gpatchell@ccgov.org, bmeffley@ccgov.org, jgregory@ccgov.org
  • Call the council members at +1(410)996-5201
  • Attend and speak at the public budget hearing on May 22rd at Elkton High School at 7 PM
  • Learn more about school budget terminology
PHS field house CCPS fund balance

A Field House, Fund Balance, & School Entrances

Answers to Frequently Asked Questions

FY19 Budget Post Part 2–Decade of Neglect Update

Read Part 2–Positions & Projects on Hold as CCPS Blindsided by County Executive’s Budget

In my last post, I explained some of the terminology associated with school budgets and discussed the sources of funding for public education. If you haven’t read that post, you might want to take a look at that one before reading this new post. Read it here

How did CCPS end up with an extra $6.4 million to spend?

If your only source of information on education in Cecil County is what you read in uninformed rants online and in the letters to the editor you could get the idea that CCPS was up to something shady. But if you read the actual articles in the paper or *gasp* attend a board of education meeting (here’s a link to the meeting schedule), you’d quickly realize those other less-than-reliable “sources” are telling tall tales.

The real answer to the question about fund balance couldn’t be farther from shady. That $6.4 million is the measurable, tangible result of the school system’s efforts to control costs and generally function as trustworthy stewards of the taxpayers’ investment in public education.

CCPS has saved the county literally millions of dollars in the last decade by developing and maintaining a culture of efficiency and frugality. Cost saving Initiatives like installing multiple large solar energy arrays, switching utilities from oil to natural gas when feasible, and adjusting employee health insurance plans, combined with several winters of weather less severe than 2014’s Polar Vortex, all contributed to the favorable unassigned fund balance CCPS reported at the end of the 2017 fiscal year.

What is fund balance?

Fund balance is a term most of us don’t run into in our daily lives but it’s an important concept to understand when talking about school budgets. My admittedly oversimplified definition of fund balance–it’s the money remaining in the operating budget after all other expenses have been met.

CCPS Board of Education policy requires the school system to maintain a fund balance of not less than 5% of its annual operating budget:

POLICY STATEMENT
The fund balance of the Board of Education of Cecil County has been accumulated to meet this purpose, to provide stability and flexibility to respond to unexpected adversity and/or opportunities.

The target is to maintain a total fund balance of not less than 5% of annual operating expenditures for the fiscal year.

The Board’s basic goal is to maintain annual expenditure increases at a growth rate, and to limit expenditures to anticipated revenue in order to maintain a balanced budget. The decision to retain a total fund balance of not less than 5% of operating expenditures stems from the following:

-This amount provides the liquidity necessary to accommodate the Board’s uneven cash flow.

-This amount provides the liquidity to respond to contingent liabilities.

Beginning in Fiscal Year 2011, unassigned fund balance shall be any remaining amounts.”

That $6.4 million is from the unassigned balance that remained at the end of FY2017.

Through solid business practices and careful planning, CCPS replenished the fund balance they were forced to dip into when Cecil County reduced its share of the school system’s funding in 2009. From the CCPS annual report for FY2017:

“The General Fund increased $4,331,152 from the previous year to $16,339,378. Several years of reductions in discretionary spending, and deferred purchases and repairs, rising healthcare costs and increased utility costs had caused a need to utilize a larger portion of the fund balance than originally planned in previous years. Portions of the fund balance were recovered in  Fiscal Years 2015, 2016 and 2017. For the first time since fiscal 2013, the target to maintain a total fund balance of not less than 5% of annual operating expenditures for the fiscal year was achieved in fiscal 2016. “

CCPS Fund Balance CAFR FY17

This screenshot from the CCPS Annual Report for FY17 gives you a better perspective on the county’s funding of the school system vs. the net change in the CCPS fund balance. For good measure, the green line shows CCPS spending.

CCPS funding from Cecil County vs Fund Balance

Why did CCPS decide to use fund balance to pay for the field house at Perryville High School rather than putting it through the county’s capital improvement plan (CIP)?

They tried (and tried…and tried) to get the county to pay for the project. It’s been included in the school system’s capital request for at least the last four years. In fact, when I started advocating for the school system 4 years ago, I was told the school system includes the field house in every year’s budget request because, in the past, some county officials claimed that they didn’t know about the project or forgot about the project from year to year. Even when there has been no chance in hell that the project would be funded, it was listed in the budget request as a sign that CCPS hadn’t “forgotten” about the project and wasn’t letting the county forget it either.

But there’s always someone who seems surprised when the topic comes up.

Anyway, when the new building at Perryville High School opened in 1977 a field house wasn’t included in the project. I’m not sure if that was due to a lack of funding or if field houses just weren’t considered common and necessary at the time. Regardless, in the last 40 years, field houses were built at all the other high schools in the county but Perryville never got one.

So, after 40 years of waiting and with no sign Cecil County would ever pay for the field house, CCPS decided to fund the project itself, using the money it had saved from cost-cutting measures over the last few years.

Maybe the county will fund the field house in future capital budgets?

For more than a decade, Cecil County has had a lousy track record for funding small capital projects for CCPS and, despite the best efforts of the maintenance staff, some of the damage caused by this neglect is visible in our schools.

As I told the council when I spoke in support of the budget amendment that addressed the appropriation of the fund balance, the most the county has funded for the CCPS small capital request in the last four fiscal years is $1.6 million and $800,000 of each year’s funding was the payment of a multi year contract that the county was obligated to pay.

With that kind of history, you can see why I told the council I had little hope of the county ever coming up with $2 million for the field house project.

CCPS small capital funding trend

How is CCPS spending the rest of the fund balance?

Because the accumulation of unassigned fund balance doesn’t represent ongoing sustained funding, it wouldn’t be prudent to spend the money on recurring expenses like salary increases or new positions. If the money was spent on pay raises this year, what would happen in the next fiscal year when that funding wasn’t available? If the county opted not to fund the increased salary expense, employees would then have to take a pay cut and no one wants to do that.

Sound financial management means the fund balance should be spent on projects and one-time expenses. Following those guidelines, most of the projects that will be covered with this money have appeared as part of the CCPS budget requests for one or more recent years–but not funded by the county.

  • Security camera upgrades at all 5 high schools and the School of Technology
  • Upgraded entrances at Kenmore Elementary School, Elkton Middle, Perryville High, and Rising Sun High
  • New phone system (to replace a system that is so antiquated that replacement parts are no longer available on eBay)
  • Upgraded parking loop at North East Elementary

CCPS Fund Balance Appropriation

To put it in simply: CCPS plans to use the savings from its operating budget to cover capital projects that would otherwise have to be funded by the county.

We should be thanking CCPS for taking care of these projects because the county had no plan to fund them in the near (or distant) future.

CCPS FY18 capital budget vs funding

What about the security of school entrances?

When CCPS went to the council in February to support their request to spend the fund balance, they assured the council that all school buildings are secure–every school is locked and visitors must be buzzed into the building.

With that said, as part of the school system’s safe schools initiative that has been in place for several years CCPS identified school buildings that didn’t meet newer recommendations for secure entrances–namely entrances with locked vestibules to funnel visitors into the main office

“Reconfigure main entrance design so that there is a secondary set of secure doors and all traffic is funneled into the main office before they can gain access into the school. To heightened the security further, make the initial exterior door buzzer controlled with a camera and intercom, thereby requiring visitors to be buzzed in the first door, funneled through a second door (which could also be buzzer controlled, if appropriate), and only then provided access into the main building.”

The schools identified are generally older and have not undergone a major renovation nor are they expected to undergo such a renovation in the foreseeable future. The need to fund projects explicitly for entrance upgrades is another symptom of the county’s decade of neglect. In the years before that decade multiple schools were renovated each year and features like upgraded entrances would have been a part of those projects. When the funding for major renovations dried up, so to did the opportunity to upgrade the entrances.

Moral of the Story? Choose your sources of information wisely

Not everything you read online is true.

Education is a large portion of the Cecil County budget so it’s understandable that the department is thoroughly scrutinized by both the county administration and the public. However, the scrutiny from the public often morphs into a handful of vocal yet uninformed residents hurling accusations intent on misinforming anyone who will listen.

Choose your sources of information wisely.

School Budget Terminology

Jargon makes me crazy–mostly because it causes miscommunication if all parties in the conversation don’t understand the terms being used.

Sometimes there’s no way around it so I want to explain some concepts so we’re all on the same page.

In order to understand the Cecil County Public Schools budget or any governmental budget for that matter, it helps to know a few terms (I apologize in advance to anyone with expertise in finance and accounting. The definitions below are for the “rest of us.”):

  • Operating budget
    • Funding for the day-to-day functioning of the school system, including salaries and benefits, utilities, transportation, and instructional materials like books
  • Capital budget
    • Small capital–Funding for projects like systems upgrades that are too expensive to be covered in the operating budget and are generally only funded by the county.
    • Large capital–Funding for major renovations and construction projects where the total cost is shared between the county and state.
  • Fund balance–Money remaining in the operating budget after all other expenses have been met.

Let me add one more term to our list:

  • Maintenance of effort (MOE)
    • A Maryland law that requires each county to provide at least as much funding per student as was provided in the prior year. Originally established in 1984 and updated several times since then, the law sets the minimum funding a county can provide to its school system. MOE is not a funding formula for an adequate school system. In fact, the state of Maryland has formed a commission to determine appropriate formulas for education funding because the current formula has been deemed to be insufficient. (Called the Kirwan Commission, no recommendations for funding have yet been made.)

I need to make this clear–funding a school system at maintenance of effort is the budgetary equivalent of the much-maligned participation trophy. In fact, state approval is required to fund below MOE.

No one funding at maintenance of effort (or just slightly higher) is a champion of education.

What does this all mean?

In my last article I shared my initial shock and disappointment with the county executive’s proposed budget for FY 2019. Now that I’ve explained some of the jargon, future articles will dive into questions that have been asked about the budget as well as questions that should be asked about the budget.

CCPS blindsided by executive's budget

Positions & Projects on Hold as CCPS Blindsided by County Executive’s Budget

Part 1

Read Part 2–A Field House, Fund Balance, & School Entrances

County Executive Alan McCarthy announced his proposed Cecil County budget for FY 2019 about two weeks ago. I’ve said little since that press conference because I didn’t know where to start and I knew once I started I wouldn’t be stopping any time soon.

I suppose the one year honeymoon with the new county executive was fun while it lasted.

I’m an unashamed fan of the work the leadership and employees of Cecil County Public Schools have done with budgeting and cost savings over the last four years that I’ve been paying attention. Leadership has pulled multitudes of rabbits out of hats to find the funding for projects and programs that the county refused to fund and employees have tightened their belts to help the cause. (Because the cost of healthcare is one of the largest expenses any organization faces each year and, as CCPS has adapted its benefits in an effort to control costs, employees have also been asked to shoulder higher healthcare costs.)

But we can only expect so many magic tricks.

Summarizing this year’s budget process so far…

CCPS put together a budget that addressed the most pressing needs of the school system, namely 29 new positions–nearly all of which would provide direct support to students:

  • 14 new teachers, most in the middle schools where class sizes are climbing
  • 5 positions for social workers and psychologists to provide the services necessary to support the student population.
  • 8 paraprofessionals

Keep in mind that CCPS was forced to cut over 100 jobs several years ago when the county suddenly cut funding.

Notice that pie chart at the top of this page which shows the portion of the CCPS operating budget that is spent on salaries and benefits–85%.

Small capital budget

CCPS requested the lowest amount I’ve seen in the last 4 years at $3.76 million–yet the county only funded $1.76 million and $800k of that is a multi-year contract that they have to fund!

Hmm, a difference of $2 million between the request and the proposed budget. That’s the estimated cost of the fieldhouse at Perryville High School.

Coincidence?

I doubt it.

But I’ll talk about the fieldhouse later.

Some of the deferred projects:

  • Secure entrances at Leeds, Cecilton, Elk Neck, and Holly Hall Elementary Schools–in February, county government feigned concern over these projects and I called them on it then. Based on the county’s proposed budget, I was right.
  • Replacement cooling tower at Bo Manor High School
  • Fieldhouse renovations at North East High School
  • Track resurfacing at Elkton High School

Large capital projects

These projects include new school buildings, major renovations, and other expensive projects like new roofs and HVAC, the county’s proposed budget pushes every project except for the replacement school for Gilpin Manor Elementary which will be completed this fall and the roof replacement at Bo Manor Middle & High out an additional year or more.

Some of the deferred projects:

  • Chesapeake City Elementary replacement school–requested to start in FY20 and now pushed to at least FY21–originally built in 1939!
  • North East Middle School major renovations–requested to start in FY20 and now pushed out past FY23–the building is so old it feels like you’ve stepped onto the set of Grease when you walk in the door. The building has been due for renovations for over 15 years.
  • Kenmore Elementary School–major renovations–requested to start in FY21, now pushed beyond FY23

This is ugly and it’s only going to get uglier.

Here’s what you can do to advocate:

    • Call or email our county council members at jbowlsbey@ccgov.org, dschneckenburger@ccgov.org, gpatchell@ccgov.org, bmeffley@ccgov.org, jgregory@ccgov.org
    • Call the council members at +1(410)996-5201
    • Attend and speak at a county council meeting (Tips for speaking)
      • April 17, 7 PM
      • May 1
        • Citizens’ Corner at 6 PM
        • Council Meeting at 7 PM
        • May 15, 7 PM
      • Attend and speak at the public budget hearing on May 22rd at Elkton High School at 7 PM
      • Learn more about school budget terminology
Bohemia Manor Turf Field

Hey, Bo Manor, the turf isn’t definite yet…

On March 30, Cecil County Executive Alan McCarthy announced his proposed county budget for FY 2019 which included $1.1 to install the county’s third artificial turf playing field at Bohemia Manor High School.

But don’t plan that ribbon cutting yet–

Getting the field into the proposed budget is just the first hurdle for this project.
It’s not a done deal…not by a long shot. The proposed budget is now in the hands of the Cecil County Council for approval and, while they can’t add to the budget, they can, and will, cut items from the budget.
And a $1 million project is an easy target, especially when it’s part of a $2.2 million capital budget for parks and rec, a budget that includes $400,000 for unspecified improvements at the newly acquired Bittersweet park and $700,000 in additional improvements at the Calvert Park complex.
FY19 Cecil County Capital Budget

Budget deliberations are always dramatic and this year’s deliberations will be no different. It would be easier for the council to cut the field than to face the ire of the small but outspoken group who relentlessly lobby for lower taxes year round.

In order for this field to become a reality, the Bo Manor community will need to advocate for the project to the county council.
Until the council approves the budget in early June, nothing is final.

Advocacy is a group effort

When we advocated for the turf field at Perryville High School during last year’s budget deliberations, we tried to send at least one community member, be it a coach, a parent, or another interested party, to each speaking opportunity, and we encouraged people to join them as a show of support.

Only one person needs to speak but make it clear that the others in attendance share the same concern. One night I convinced my husband and teenage sons to wear Perryville swag and sit in the crowd at the council meeting while I spoke. On a different night our principal and some coaches joined us at a council meeting. Every touch counts.

Email is also effective

Not everyone is comfortable with public speaking so keep in mind that email is also effective. One of our coaches took the time to spell out the names of this players and the injuries they suffered that he attributed to our field conditions in previous seasons. Tell the council your unique story.

Here’s what you can do to advocate:

    • Call or email our county council members at jbowlsbey@ccgov.org, dschneckenburger@ccgov.org, gpatchell@ccgov.org, bmeffley@ccgov.org, jgregory@ccgov.org
    • Call the council members at +1(410)996-5201
    • Attend and speak at a county council meeting (Tips for speaking)
      • April 17, 7 PM
      • May 1
        • Citizens’ Corner at 6 PM
        • Council Meeting at 7 PM
        • May 15, 7 PM
      • Attend and speak at the public budget hearing on May 22rd at Elkton High School at 7 PM