Appoquinimink Gouges Taxpayers For Special Education Tuition Payments But $5 Million Is Unaccounted For

The Appoquinimink School District Board of Education approved an action item on Tuesday night to cover “rising special education costs” in the district, according to an article by Amy Cherry and Yossi Goldstein with WDEL.  To say the reasoning for this tax hike, which will cost the average Middletown resident on average of $65 a year, is misleading at best, would be an understatement.  According to the Appoquinimink Director of Finance, Dr. Charles Longfellow:

“Tuition, which is for special education students, is an (estimated) $815,000 increase (for 2017),” explained Longfellow.

That is the basis for their case.  But in Delaware, special education funding comes from three sources: the feds, the state, and local funding.  Is this $815,000 increase just the local increase or overall?  For “tuition”, which is based on special education students choicing out of the district to another district to attend a special school, like the Delaware Autism Program or the Delaware School for the Deaf, the sending district has to pay the other district that portion of funds.  As well, it could also be to cover funds for students sent to alternative schools within the district, but since Appoquinimink has no alternative schools, this is a moot point.  In a sense, it is the customary tuition, but the districts pay each other.  Students in Appo don’t tend to choice out at the higher rates other districts have to deal with.  But students with disabilities in Appo do tend to choice out more than students with disabilities in other districts, as detailed by the Statewide Review of Education Opportunities report commissioned by the Delaware State Board of Education last year:

Appo’s biggest student population drain is MOT Charter School.  Since the Delaware Department of Education hasn’t published these reports since 2014, it is very difficult to tell just how many students choice in or out of Appo.  However, in looking at choice students historically, Appo tends not to bleed out as many students as other surrounding districts.  Even more misleading is the fact that, aside from basic special education funding for students in Kindergarten to 3rd grade, the special education funding from the state is based on the number of special education units in the district.  If you have more special education students, you would get more state funds.  However, and where tuition funds come into play, when the school cannot provide the special education services to the student based on the individual special education allotment of funding for that student, the state doesn’t pay more.  And if the student attends a special school in another district, this is where the tuition costs are created.

But Appo seems to justify this tax hike on their district website:

At the beginning of each new fiscal year, school districts must review their financial obligations and establish school tax rates to be collected on their behalf by New Castle County. A system of checks and balances is in place to ensure fiscal responsibility. This includes a review by the volunteers who serve on the District’s Financial Advisory Committee and approval of the Board of Education. Current and historical tax rate information is available in our budget documents accessible via the links to the right.

It’s funny they bring up the District Financial Advisory Committee, because when you click on that section of their district website, you see no reports or a list of the members of this committee, just a log-in for these special members.  Delaware law states each public body must show how the committee representation is made up.  While actual minutes or committee members are not required to be listed on a district or charter website, most districts and charters do show this information to support a level of transparency.  But not Appo.  They don’t even show meeting times, agendas, or minutes for their version of a Citizens Budget Oversight Committee.

But even if the district had a massive influx of special education students choicing in or out of their district after the official September 30th count (which determines special education funding from the state for each district), we should see that reflected in their final budget approved by the board on 2/23/16, right?  Not so.  Their tuition tax did increase by $90,000 from last summer until February of this year.  However, only 30,000 of that was for special schools out of the district.  Furthermore, on page 12 of the budget, it states they transferred $276,000 out of the tuition pool to another bucket of funding.  As well, it was projected the tuition fund would be at $8,407,661 in the initial budget, but due to the transfer and an unidentifiable increase in “Instruction and Operations” to the tune of $425,630.00, it left the district $702,039 in the hole.  But it gets more interesting on page 15 when it shows projected revenue of $8,503,168 for the year coming from property taxes.  But there is no viable proof anywhere that justifies a $720,000 increase for this in FY2017.  At least not in special education.  Upon careful review of this budget, they actually overestimated their initial special education costs by over $100,000.00 for the receipt of federal IDEA-B funds, which means they must have had a decrease in students with disabilities, not an increase.

To make matters worse, I checked to see how much Appo spent on special education in FY2016.  Since none of our districts or charters are consistent with how they code education funding in many areas, it took some time to find Appo’s portions.  According to Delaware Online Checkbook, Appo spent over $1.8 million dollars in FY2016 to cover related services for special education in the district.  That is what they spent under the categories for basic, intensive, and complex.  But those covered special education salaries.  When you look at their tuition payments, I’m not seeing $8,503,168 or anything close to that number.

I looked in every possible category to see if it these tuition payments could somehow be miscoded and I found absolutely nothing going towards other school districts.  In the above pictures, I also included funds going to Delaware and out of state residential treatment centers.  So at a maximum, Appo spent a little over $3 million in tuition payments for FY2016.  Perhaps they haven’t paid some of the bills for this?  I checked the prior year, and we are looking at a little bit less in FY2015:

So where did over $5 million in funds allocated in their budget for tuition payments go?  This is a question only Appo can answer, and I expect we will find out after this article comes out.  Keep in mind, this is budgeted funds, so it isn’t missing like someone stole it.  They spent it somewhere else when tuition funds are specifically earmarked to cover special education costs.  The only other areas where a district board can approve a tax warrant is for reading and/or math specialists and minor capital improvements.  In FY2016, Appo spent about $983,000 on reading and math specialists.  To be on the safe side, I reviewed a few other districts budgets and what they have allocated for tuition.  For the most part, those districts matched their budgeted amount and what appears on Delaware Online Checkbook.

According to the Delaware DOE school profile site, in FY2015, the feds provided 2% of the district’s overall funding, 67% came from the state, and 30% from local taxes with an average district cost per student of $11,226.00.  If you compare this to the average for the rest of the state, the feds provide 10% of funds, the state  pays 59% and local funds make up the remaining 31%.  So why does Appo receive such a small amount of federal funds?  Most of that has to do with Title I allocations, which go towards schools with high concentrations of low-income students.  For Appoquinimink, their low-income population represents 14.7% of the students in the district.  For the state, this average is 36%.  As well, the state average for students with disabilities is 14.4% while Appo has a lower number at 11.8%.  To break this down even further, the most expensive category of special education is students in a complex status.  These are students who need one-on-one support at all times and many related services which are very costly.  Appoquinimink has a very low number of this special education population compared to other districts in New Castle and Kent County.  The two closest districts in terms of student populations, Brandywine and Indian River, have much higher populations of complex special education students.  Appo is at 58% of Brandywine’s total complex population while they are at 36% of Indian River’s number.  Even against Colonial, who has 1,000 less students in their overall population, Appo comes at 37% of their complex special education population.  We know the district isn’t losing special education students to MOT Charter School because they only have 4 complex students with disabilities and only 69 special education students overall.  What does that tell us?  Either there aren’t that many complex special education students in Appoquinimink or their parents send these students to private schools.  The Middletown/Odessa area is growing at an incredible fast rate, however, it is also one of the more affluent areas of the state.

“That’s why the state and feds protect the right to get this money without going to referendum–they prescribe the services, how to identify them, what needs to be offered,” said Appoquinmink Public Information Officer Lilian Miles.

Of course they protect the right.  It allows them to pay less of the allocations they should be paying for special education.  But the district doesn’t seem to care, because one way or another they will get this money.  They don’t care if they have to gouge the taxpayer.  Perhaps those are harsh words, but in light of the biggest fabrication coming from Miles is this absolute lie:

Miles said the population of special education students has doubled over the past five years in Appoquinmink, though it remains a very small percentage of the district’s student body. The growth is representative of what’s happening all across the Middletown area.

Wow, the special education population doubled?  That is a massive increase Ms. Miles.  However, your statement doesn’t hold water.  In checking on the Delaware September 30th Enrollment unit count reports, I found Appoquinimink had the following special education populations from FY2011 to FY 2016:

FY2011: 839

FY2012: 963

FY2013: 976

FY2014: 1,038

FY2015: 1,125

FY2016: 1,268

Even using Common Core math, it is easy to determine that 839+839=1,678.  Being that the difference between 839 and 1,268 is 429, I would hardly call that a “doubling”.  Unless they are counting the students with disabilities who either graduated or turned 21 over the past five years and are no longer a part of the district population in those numbers, than yeah, I could believe that statement.  But it would be a statement built on false pretenses.  Granted, the district’s population of complex special education students did double from 43 to 87 students but would that be enough to cover $8 million dollars in tuition costs?  Not even closeWhat astonishes me even more is either their board was oblivious to this outright lie or they really didn’t care.

If a tax warrant weren’t approved, Miles said funds to cover special education would have to come from the general operating budget.  “You don’t want to short the 90 percent by taking money from their pot–you just have to work to get it right,” said Miles. “It’s raising taxes for the services you are required to provide for this special population.”

So, Ms. Miles, if those funds won’t come out of the general operating budget based on revenue from what I view as a fraudulent tax increase based a board’s suspension of disbelief over special education populations within the very district they oversee, what are you using those funds in the general operating budget for?  And furthermore, say nothing happens as a result of this article which happens in Delaware way too much for my liking, and we have already caught you in a major lie concerning the most vulnerable of children, how do we know those funds would even go towards special education?  Especially since nine districts put basic special education funding all in one bucket to the state, as opposed to allocating those funds towards buckets like occupational therapists, speech therapists, physical therapy, and whatnot.  And only Appo and Capital put funds going towards complex and intense special education students in these lumped groups, thus making it impossible to find out how much these two districts are paying for certain types of services.  But at least you aren’t Brandywine who seems to throw it all in one bucket for basic to regular special education students, assuming they have NO intense or complex special education students.

But according to the special education section of Appo’s website, at least they are fully aware of which bucket these funds should go in:

The most common types of special education services are: Reader or interpreter; Assistive technology; Speech therapy; Occupational therapy; Life-skills training; Personal counseling or therapy; Transportation assistance; Physical therapy; Hearing-loss therapy or audiology; Job counseling or training.

I would strongly suggest the Appoquinimink Board of Education reconvene in an emergency session to rescind their vote cast Tuesday night and actually review this situation for what it is.  How dare this district and board use special needs children in their quest for more money, and to add insult to injury, charging every property tax paying citizen in the district to get that money.  I looked on the boarddocs section of their website, and most traditional school district boards provide documents to go along with items like this.  Not so with Appoquinimink.  So there is no way for the public to see this huge increase needed for special education funding based on an already missing $5 million dollars for this purpose.  Anyone involved in this should resign now or face charges for fraud.  Furthermore, any tax warrants for New Castle County have to be approved by county council.  I would strongly recommend this council not even entertain this farce.