Tuesday, March 15, 2011

Special Ed Shortfall Update/Letter to TC

We received a report from the CT State Dept of Ed detailing what our Excess Cost reimbursement will be for the current fiscal year. According to the report, Cheshire will receive $851,204. The Town Revenue Budget for 2010-2011 appropriated $484,209 for excess cost reimbursement. In short, Cheshire is receiving $366,995 above what it budgeted for revenue. With the $366,995 to cover a significant portion of the $463,311 over-expenditure. The remainder can be managed within the education budget.


Dr. Florio sent a letter (below) to the TC describing the reimbursement, the over-expenditure for Outplacement Tuition/Transportation in the current budget and asking for a meeting to discuss next steps. It's self-explanatory.




58 comments:

Anonymous said...

Tony: Have you heard anything from the TC that this money will in fact make it to the BOE? I've heard that there is still $500,000 from previous years that never made it to the BOE.

Tony Perugini said...

We met with the TC Budget Committee last night and discussed this topic, as well as the 2011-2012 education budget proposal.

The TC should be drafting a resolution to move this reimbursement to the BOE's current operating budget. It really was a no-brainer but certainly uncharted ground for both the BOE and TC. I believe the TC Finance committee is now fully aware of how this grant works including calculations, etc.

In speaking with Dr. Florio, he believes there's no need to go back and request any other excess reimbursement from prior years. He's been able, and proactively, managing excess cost overruns for Special Ed within the operating budget when the amount has been workable. This year is an exception since we can't absorb ~$460K.

He also believes that the BOE has benefited from surplus in this account during a few years where the account ended on the positive side. In the end, he feels it balances out.

The lesson learned here, for me, is that sometimes being a good citizen causes contention. Dr. Florio has been a good citizen trying to manage the problem within his budgets over the years. In doing so, the issue never surfaced until it was too big to handle. In hindsight, past BOE's should have made requests and/or developed protocol with past TC's in handling this situation. Lesson learned.

The 2011-2012 Special Ed account will be properly funded based on what we know today in terms of costs and anticipated reimbursement from Hartford. However, while Gov. Malloy has PROPOSED to keep funding at current levels, his budget has yet to be adopted.

Furthermore, and this was mentioned by Dr. Florio last night, because Hartford doesn't fund this obligation at 100% our reimbursement can go up or down at any time. My concern is not the TC (any) but what Hartford will or won't do in years to come.

Tim White said...

the issue never surfaced until it was too big to handle.

Do you happen to have the budgetary overage / underage for the past decade? I know GF typically tracks his numbers going back ten years.

I'm curious to see how big the swings were.

Also, GF referenced the general statutes. Are there similar statutes for any other state funding sources, i.e. ECS?

As I've said here before, the responsible course of action is to review all state funding sources in a similar fashion. But perhaps this is different because it is the only funding source that is covered by state statute?

Tim White said...

Over $350,000 goes to referendum. Are you planning on going to referendum and letting the voters decide? Or will this be a Council vote?

Anonymous said...

I'd like to see those numbers too if you could Tony.

Anonymous said...

"Over $350,000 goes to referendum. Are you planning on going to referendum and letting the voters decide? Or will this be a Council vote?"
Doesn't that apply to capital projects like fixing the bridge on Country Club road? not normal yearly budget items.
Anyway, what would the vote be about? whether to defy a state statute? The money by statute has to go to the BOE.

Tony Perugini said...

"Over $350,000 goes to referendum. Are you planning on going to referendum and letting the voters decide? Or will this be a Council vote?"

Tim, this one is fairly well defined via the state statute, at least that was the consensus Tuesday night. It's specific grant money for excess costs for Special Ed...and can only be used for Special Ed. I believe it will be a town council vote unless the town attorney believes otherwise. The actual money is supposed to be received by the town this month.

Tony Perugini said...

"I'd like to see those numbers too if you could Tony."

I have this report somewhere and will post it.

Tim White said...

I believe it will be a town council vote unless the town attorney believes otherwise.

I know this isn't BOE business, but figure I'll ask... will the Council be asking advice of the bond counsel (via the Town Attorney)?

Regardless, I find this puzzling. Just last year during a Council meeting I asked a largely rhetorical question about the possibility of the $30 million sewer upgrade failing at referendum. The response I got came from Councilman Schrumm. He said it wouldn't matter because state law requires the upgrade to occur. So it would happen regardless of the referendum results.

Following this exchange, there was continued talk of the impending $30 million sewer upgrade referendum. So if no referendum is required when state law supercedes the Charter, why the concern over the $30 million sewer referendum failing?

And with this new precedent, should I assume that we will not see the $30 million sewer upgrade on the ballot?

Again, I know these questions aren't necessarily for you... but perhaps you know?

Tim White said...

Doesn't that apply to capital projects like fixing the bridge on Country Club road?

All Council appropriations above $350,000 are subject to referendum. It doesn't matter what it is.

However, referenda are used most often during the annual capital budget process. Nonetheless, any "special appropriations" (that are related to the annual operating budget) are also subject to referendum. And even "the budget" (a.k.a. the annual operating budget) is subject to voter referendum. So all appropriations in excess of $350,000 are subject to voter referendum in some way.

Anyway, what would the vote be about?

It's a matter of process and precedent (see my above comment on the sewer plant).

Tim White said...

In speaking with Dr. Florio, he believes there's no need to go back and request any other excess reimbursement from prior years.

But if the law requires the money be transferred this year, shouldn't the law apply to last year... and every year since the law was enacted? Or perhaps there's some sort of statute of limitations?

I'm just wondering if the BOE and Council feel that GFs opinion supercedes the law? lol. Obviously that's not the case. So what am I missing?

Tim White said...

In hindsight, past BOE's should have made requests and/or developed protocol with past TC's in handling this situation. Lesson learned.

Furthermore, and this was mentioned by Dr. Florio last night, because Hartford doesn't fund this obligation at 100% our reimbursement can go up or down at any time. My concern is not the TC (any) but what Hartford will or won't do in years to come.

So what's the takeaway from the lesson learned? I'm guessing you're saying that the BOE and Council have agreed that the BOE will be taking on future budgetary volatility? That is, all special ed state funding swings will be absorbed by the BOE? And it goes both ways... whether the approved budget increases or decreases special ed funding, the change will be absorbed by the BOE budget?

And if that's the case, will it apply to all education-related state funding?

And is there a threshold under which no Council / BOE transfer would occur? Is there a (dollar amount) trigger? Actually, that couldn't exist since the law is the law. I guess this will be an annual vote...

Is this part of the takeaway from the lesson learned?

And since laws were broken, what sort of accountability is there? Are there either criminal or civil penalties? For whom?

Anonymous said...

"It's a matter of process and precedent (see my above comment on the sewer plant)."
I don't know about the details of the sewer upgrade, but on this special ed matter it sure sounds like you are suggesting an effort to misappropriate money away from it's intended use, which was to pay for education of special education students. Seems like you would be exposing the town to a possible multi-million dollar law suite.

Anonymous said...

"All Council appropriations above $350,000 are subject to referendum." I would argue that these funds should never have been considered "Council appropriations". They are supposed to be payments from the state to the BOE. Any effort to misappropriate these funds should be investigated by the state.

Tim White said...

you are suggesting an effort to misappropriate money

Not at all. But if you read the rest of my comments you'll see that I'm effectively questioning if past funds were misappropriated... and asking why those funds are not also being transferred. The law is the law. I don't see how the law would only apply this year.

I'm just trying to understand the big picture. That's all.

Tim White said...

Any effort to misappropriate these funds should be investigated by the state.

I'm kind of wondering about this myself... is there an enforcement mechanism? It seems to me that a law needs to have an enforcement mechanism or it is a pointless law.

Anonymous said...

Are you suggesting that this money represents surplus money or new spending? My understanding is that this money is reimbursement for funds spent on special education outplacement. So if the town has to spend $1.0 million and the state reimburses us for $0.7 million instead of $0.5, it's not like we have a $0.2 million surplus. It just means we have a $0.3 million deficit instead of $0.5 million.

Tim White said...

Are you suggesting that this money represents surplus money or new spending?

This issue has been framed as a legal issue regarding a particular budget. I haven't heard it framed as new spending or surplus money... nor did I intend to suggest either. So I don't understand your question. Maybe I can respond, if you ask it differently?

Anonymous said...

" I'm effectively questioning if past funds were misappropriated... and asking why those funds are not also being transferred."
Good question. I would doubt that the state has ever given Cheshire more than they have spent.

Anonymous said...

"This issue has been framed as a legal issue regarding a particular budget. I haven't heard it framed as new spending or surplus money"
Why would there be a referendum for funds that are reimbursement for money spent? I have never seen this done.

Tim White said...

I shouldn't have used the word misappropriate. I'm not convinced that's the correct word.

Regardless, Tony said (in the second comment in this thread) that the special ed funding has gone both ways from year to year... but then also says that there's a consensus within the Council (and presumably the BOE) that prior funds don't need to be revisited.

So there must be some sort of statute of limitations that prohibits (or doesn't require) the transfer of prior year funds?

If not, then it seems the Council would still be running afoul of the law. Right? And I'm assuming that's not the case... so just hoping to hear why this year's fund exchange is occuring while past years are being ignored.

Tim White said...

My understanding of the (voter-approved) Charter is that any appropriation above $350,000 is subject to referendum. I don't know how else to explain it.

Obviously the Charter conflicts with state law at times. But failure to send this to referendum is precedent-setting. I strongly encourage the Council to clarify the details (including why only this year?) on this before voting.

Anonymous said...

" But failure to send this to referendum is precedent-setting."
I would argue that the failure to transfer the funds has been precedent setting. The state mandates that the students are outplaced at Cheshire's expense, then reimburses us for PART of those expenses. Did the voters ever get a say in the decision by the TC to NOT transfer the funds? It is simply not good enough to say that the BOE never requested those funds, so that's why it was not done in the past. It should have been automatic, not optional or upon request. If the state gives us grant money for the turf field we can't have a referendum to now spend it on a bridge.

Tim White said...

However you cut it, it seems like there are still a lot of unanswered questions that need to be addressed by the Council.

Anonymous said...

11:08
What's it like to be stuck on stupid? The town's operating budget is based on the TM's and BOE's request and the Council's final adopted budget per their reductions/additions which sets the new mill rate.

In the preceeding budget cycle there usually is a surplus at year end which becomes revenue towards the next operating budget. This is based on lots of factors including how the town projected its tax collection rate, increses or decreases in money from pilots, ECS grants, etc.

The fact that the super. didn't ask in previous years may simply mean he could absorb any shortfall based on his overbudgeting for something else or he had budgeted accurately in his budget.

Budgets are never a perfect art. Its taxpayers money not the town councils so get off you soapbox. Education is still getting a significant share of the overall budget as it should. This years projected 63% of the total probably won't change a whole lot either.

Anonymous said...

This whole string is just another example of the antiquated and bassackwards town governance in Cheshire where nobody really seems to have a clue as to what is required to run the town.

Tim White said...

Actually, I think people know exactly what is required... but they don't necessarily want the voters to know...

copy and paste this link...

http://timwhitelistens.blogspot.com/2011/03/subverting-charter-is-unacceptable.html

or just click on my name... it's at the top.

Anonymous said...

" Its taxpayers money not the town councils so get off you soapbox."
Talk about oblivious. You missing the whole point Sherlock. The money comes from the state and is intended for the BOE. The TC has no business "hiding" it in budgetary obscurity and acting like it's the BOE's fault for not pointing it out before. Duh!

Anonymous said...

I don't understand what the confusion is about. If the state statute C.G.S. 10-76g(b) says that the funds the state returnes to the town must be used for special education only, what is the confusion and why is the TC voting? Are they voting to not follow the statute? Also, how has the council in the past not returned these funds to the BOE without GF having to request them?Isn't that a misappropriation of the state funds and subject to
a lawsuit?
Once again Mr. Schrumm has argued against passing the money to the BOE. Apparently he doesn't understand the law and someone should inform him. This just furthers taxpayers feelings about the personal vendetta this man has against the educational system in this town.

Anonymous said...

The statute is very clear about the use of this money. It's supposed to be credited directly to the special ed accounts and NOT town revenue.

I don't know what Schrumm is thinking (read today's journal) but he's begging for Cheshire to be sued by Hartford over this. If the state finds that these reimbursements have not followed the statute in Cheshire then we will see a lawsuit possibly asking to forfeit the portion of reimbursements that never made it to the BOE's...with interest.

Not good. With the state budget shortfall we have it's only a matter of time before Hartford comes after this misappropriated funding.

Anonymous said...

I think we should should call for the resignations of the TC menbers for their mishandling of these special education funds. I wonder what else they are lying about and other laws they have broken or ignored. This is the perfect opportunity to get rid of people who are obviously not qualified or trustowrthy and are destroying our town.

Anonymous said...

Perhaps a court order needs to be issued directing the funds to the BOE. Maybe that would "clarify" things.

Anonymous said...

Anonymous said...
Ebeneezer Schrumm stealing from Cheshire's children. What can he do for an encore? Cut back on the school lunch program?

March 22, 2011 9:35 PM

School lunch program??? Where've you been? The lunch program is NOT part of the budget.

Guess you'll have to try to come up with some more insulting remarks...as you've obviously tried to do throughout this blog. At least get your facts straight.

Anonymous said...

Sounds like we've got some dems doing some grandstanding...gee take a guess who.

Anonymous said...

"The lunch program is NOT part of the budget."
Obviously. However, special ed funds are NOT part of the town general budget either, but that did not stop some on the TC from misappropriating those funds. One wonders just how far certain TC members will go to fuel their agenda.

Tony Perugini said...

I deleted 9:35's post because it was a personal attack. I've noticed this on occasion here and cleaned up where I found the issue.

I don't want to put the blog into moderated status whereby posts are captured in a review queue before they are made available on the blog.

I also don't want to waste my time cleaning up posts. I'm all for discussion but let's not make it personal.

Thanks.

Anonymous said...

Shouldn't the real question be, why did we get $851,204 when we only appropriated for $484,209?

Isn't this state in financial turmoil?

I went and looked up the C.G.S. 10-76g (b). I see where it stated that the state will reimburse the town, but there is no explanation on what happens if there is an excess amount.

I assume that Florio would not use the excess for special education needs like the statute states it should be used, so what gives him the right to use it in other areas of his budget?

I still wonder why Florio didn't request the excess in the past?

It all sounds fishy to me.

Anonymous said...

Here is the rest of the statute cited in Florio's letter:

"...rather than town revenue. Such expenditure account shall be so credited no later than thirty days after receipt by the treasurer of necessary documentation from the board of education indicating the amount of such special education expenditures incurred in excess of such town's board of education budgeted estimate of such expenditures."

Trouble in River City with a capital S and it rhymes with pool.

Anonymous said...

9:17
So what that says is that the town has 30 days to transfer the money to the BOE once the figures are forwarded to the treasurer. Is says nothing about needing a TC vote or that the TC even has a say in the matter. Any attempt to stop that transfer is invalid and likely illegal.

Anonymous said...

"Shouldn't the real question be, why did we get $851,204 when we only appropriated for $484,209?"
What you fail to understand is that it costs the BOE far more than either of those figures for outplacement of those students, so either way there is a deficit. Florio estimated what a "less optimistic" figure for reimbursement would be, but it turns out that the govenor's budget did not cut education funds as badly as feared. That comes as a dissappointment to the "my tax bill is more important than education" crowd.

Anonymous said...

"I assume that Florio would not use the excess for special education needs like the statute states it should be used"
Why would you assume that? The costs for special ed exceed those funds. These are not surplus funds they just help decrease the deficit. The portion of the deficit that is not paid by state funds then has to come from local funds.

Anonymous said...

Maybe all the people questioning the handling of state funds should talk to the town manager since he oversees the accounting and basically calls the shots on how everything in this town is handled. Or you could talk to the audit committee. I believe Ecke is chair of that committee. Let them explain it. It's better to get answers from them rather then make the remarks you're making here. Guess we know how rumors get started.

Anonymous said...

10:34
Wasn't it was Mr. Schrumm who was arguing against transfering the money to the BOE, not Mr. Milone or Mr. Ecke? In fact, I believe both of them would be in favor of transfering the money. I think Mr. Schrumm needs to explain why he wants to defy a state statute.

Anonymous said...

10:54
Yes, Mr. Schrumm needs to explain to the taxpayers how he can rationalize over-riding a state statute. If he won't explain it to the taxpayers perhaps he will have to explain it to the state Attorney General.

Anonymous said...

Let me ask this a different way.
Florio appropriates for $484,209. Thinking the state would be issuing budget cuts. The state doesn't cut that part of the budget and gives the town $851.204.

What would happen if the state just gave the $484,209? What about the years where we didn't get enough, didn't the town cover the overages?

Wouldn't the town be responsible for the difference no matter what?

10:51
Schrumm wasn't on the board the previous years when there was a surplus, who are you blaming for not giving that surplus to the BOE?

Any defecit in budgets will still have to be covered by our town, or I am way off base?

Guess what, next year the state won't be so generous, so get ready.

Tony Perugini said...

"Let me ask this a different way. Florio appropriates for $484,209. Thinking the state would be issuing budget cuts. The state doesn't cut that part of the budget and gives the town $851.204."

We didn't appropriate for $484,209. $484,209 is the amount that the budget is over specifically in the tuition outplacement-transportation accounts. The actual budget for this is $1,163,000.00 The state is reimbursing us $851K.

In other words, we had to spend $1.163M in order to receive $851K. Gotta love Hartford. The state is supposed reimburse us the full amount of the costs but they never do.

"What would happen if the state just gave the $484,209? What about the years where we didn't get enough, didn't the town cover the overages?"

If they just gave us $484K we'd be on the hook for the remainder of $1.163M. And...this amount is in the current budget. We'd lose out on $367K of reimbursement/revenue under the statute.

"Wouldn't the town be responsible for the difference no matter what?"

Yes.

"Any defecit in budgets will still have to be covered by our town, or I am way off base?"

You're right. Had Hartford NOT reimbursed us the BOE would have to request the $484K from the town council in order to cover the shortfall.

"Guess what, next year the state won't be so generous, so get ready."

I agree but I think the reality will hit in 2 years once the new ECS formula has been finalized and the PILOT formula change around prisoner-residency takes effect.

Anonymous said...

Odd, nowhere in GF's letter does he assert/maintain/argue that the Educ. Dept "needs" the additional appropriation.

Anonymous said...

"In other words, we had to spend $1.163M in order to receive $851K. Gotta love Hartford. The state is supposed reimburse us the full amount of the costs but they never do."
So the BOE is still $312K in the hole? If the TC underfunds the BOE where will that money come from? Cuts in staff or programs?

Anonymous said...

"Odd, nowhere in GF's letter does he assert/maintain/argue that the Educ. Dept "needs" the additional appropriation."
Could you possibly be that oblivious. Maybe the budget requesting an additional $3 million was a subtle hint. Do you need neon lights?

Anonymous said...

Tony:
Can you tell us why Florio is requesting the overage this year, but hadn't requested it in past years?

If they tell us it is the law, then why didn't they force the TC's hand the past several years?

Tell me what the difference will be:
The TC gives the overage to the BOE and there is still a defecit that has to be covered by the town.
The TC doesn't give the overage to the BOE and the town still has to vover the overage.

It sounds like putting in one pocket and taking out of another pocket. Either way, it has to be paid.

What is the difference between the TC keeping it in the general fund or it going to the BOE fund, it still has to be paid.

Tony Perugini said...

I've addressed this issue so many times on this blog and there's a plethora of detail I provided on the matter.

I feel like I am answering the same questions over and over on the matter, lol.

Check out the links on the main page (Doc Libary) as well as the posts I created on the Special Ed shortfalls. There's also a report in the libary about the shortfalls/non-shortfalls each year on Spec Ed.

Oblivious Said said...

Anon 10:38
The $367K has to be used in this fiscal year, not next - ergo the question. Next years budget already reflects the change in special education, both on the revenue side and the expense side.

Anonymous said...

Please post something new. I'm rapidly losing brain cells reading these responses. Off to watch Jersey Shore!

Anonymous said...

Tony, in all due respect, forgive those of us who are just trying to understand this. You are deeply involved, and I am sure it makes sense to you. For me,despite reading all the documents you posted, I still have questions that I don't feel you have answered.

I saw where you posted the overages and shortfalls for 10 years. I don't see anywhere why the overages weren't requested each year by the super or BOE?
It doesn't make sense to me and I am sure others are confused.
I also read C.G.S. 10-76g(b), I didn't see anywhere in that statute where it addresse the overage question. Is it stated or implied that when the state gives that money to a town that it all must be posted to the BOE?
From what it looks like, the town held back over $500,000 over the past 10 years. Where did that money go? Was it still used to cover the overages in the BOE Budget?

Sorry if you feel you are repeating yourself, but I really have beeen following this and I don't see where you answered these questions.
I am just confused.

Anonymous said...

"Can you tell us why Florio is requesting the overage this year, but hadn't requested it in past years?"
I believe GF commented that the deficit this year simply can't be absorbed by adjusting the budget elsewhere. He has run out of places to cut or raise fees without severely affecting services.
"Tell me what the difference will be:
The TC gives the overage to the BOE and there is still a defecit that has to be covered by the town.
The TC doesn't give the overage to the BOE and the town still has to vover the overage."
Huge difference. Option 1 follows the state statute and those funds go to their intended purpose, preventing further cuts in services. Option 2 does not follow the statute, thus inviting lawsuits and/or criminal penalties AND those funds need to be made up by cutting education services.
Those funds are reimbursement from the state for special ed expenses, they are not the TC's to "give". For accounting purposes the TC should not be counting that money as a credit to be used as they please. It is targeted money just like the turf grant. What is so hard to understand?

Anonymous said...

"I also read C.G.S. 10-76g(b), I didn't see anywhere in that statute where it addresse the overage question. Is it stated or implied that when the state gives that money to a town that it all must be posted to the BOE?"
You you read the wrong statute? The statute is ABOUT the "overage" (excess expenses) and yes it does specifically state that the funds have to be credited to the BOE not the town.

Anonymous said...

tonyandtimtalk.com

Anonymous said...

9:13
What statute would that be?

8:48
So, the next 2 years when there is a lot less money coming from the state, what do we do? Won't the town still be responsible?