Christina Legislative Briefing Q&A Transcription: Part 1

Yes, there will be two parts to this.  Part 1 represents about 60% of the question and answer session from the Christina School District Legislative Briefing on the charter school funding issue.  If you haven’t read it yet, you may want to read this post first as it has the presentation Christina Chief Financial Officer Bob Silber gave to legislators and members of the public at the meeting this morning.  It could be difficult to understand everything in these questions until you read that first.

Welcome back to those who left.  Without further ado, here it is:

Monica Moriak (member of Christina’s Citizens Budget Oversight Committee): The district did not mean to exclude something specific? They noticed that in 2014 you were not including the 10 cent Referendum in the financial position report because you did not see that as something you could use for anything and that’s when they noticed that and so that’s when they decided, “Ooo, we need a different number” so Dr. Meece walked away from the charter bill?  Is that when that got separated because you used a different number?

Robert Silber (Christina’s Chief Financial Officer): Yes, for those of you who didn’t ask the question, I’ll repeat. In 2014, the Department of Education recognized that there are, at least for the Christina School District, there are three series of numbers that are used or assigned to our district: 9100 series, 9800 series, and 9900 series. The 9100 series and the 9900 series are dollars that are excluded, the 9800 series are dollars that are included. If I take a look at… well, why don’t I do it this way… our Citizen’s Budget Oversight Committee, about a year or two ago, as the district started having its financial challenges, started asking the district to provide information on a monthly basis, focused on what our local unrestricted expenditures are. So every month, we prepare financial statements that are unique within the state, that also include a breakdown of what we know to be excluded, and what we know to be included. It’s a very simple issue- 9800, included, and everything else, excluded. And last year, as an example, when you look at FY2015’s financial results, not (FY)16’s, but 15’s financial report, and we take a look at what was our total spend of what we consider to be unrestricted local dollars, that number matched to the penny to what the Department of Education calculated on their form what the local cost per student should be. So that was validation, if you will, of the process over the years. The components, as to what goes where, again, I can’t answer. But specifically, there was a question raised, I believe, because one of the goals of the Department of Education is to take the process that they use today and automate it. But if you’re gonna automate something to say I want to include certain numbers and exclude certain numbers, you’re going to want to make sure that everything that is in that included bucket all have a common number that you can pull from. So any appropriation beginning with 98, which is included, anything that begins with something other than 98, would be excluded. That’s what their goal is.

State Rep. John Kowalko: Yes, a couple questions. I appreciate the effort you put into this the effort to explain this. My concern is this- as we’re dealing with a very complex issue, which has a parameter of a coding issue put in place. You have to have an understand the finances of a public schools in Delaware, and it’s very complex, very complicated, with coding issues that are not always as capturing of the actual expenditure as we would like to see happen. But with that being said, in 2014 the DOE asked you to, more or less, justify some things and if it wasn’t justified, they were going to ask you to put a separate code for that mechanism in place. Do I have that right?

Silber: I would probably express it another way. In 2014, every district, three times a year, is required to do a financial position report. I don’t know what triggered their follow-up questions. In 2014, when Christina School District submitted theirs, we showed, without any question, that we had sufficient resources to pass the test. So the question the Dept. of Education had on a response may have been directed towards, or may have been triggered, by the district that may not have been able to reflect that they are in good standing, that I don’t know. All I know is that the question was raised. The question was raised by the Department, “Why are you not listing all of these appropriations? You’re giving me a short list.” And the answer came back, for any reason, from different individuals, ours was “We’re restricted on certain funds.”

Kowalko: I’m going to pass forward now to recent events and the new determinations, that apparently a decision was made August 24^th, this stands out, the districts were informed of a meeting with select Superintendents, the key word is select Superintendents, and business managers would not be included. It’s mind-boggling to me that your office, Christina and the other districts I’m sure, would be offering a path forward, they would have done it in a collaborative process. But it seems to me that DOE has no intention of collaborating. When they asked you for a report, a spreadsheet of how you do it, then they make a final determination at the end of that tunnel without having said to you, “We question this or we think this or can you justify that”, to me, that’s almost a ruling, a one-sided rule that is not going to benefit the districts and/or public school systems. I know you don’t have the answer to that. I’ve asked Secretary Godowsky for a timeline and dates of who was at these meetings. I will follow-up, because his answer to me yesterday was very, very shallow. It was “I’m going to send out the report to everybody to explain the process.” This doesn’t ask for an explanation of the process. I know the process. I talked to Bob (Silber) for an hour yesterday. This asks for a timeline of who was involved when the decision-making, from May on to this point in time, and why were they excluding people that have knowledge, that actually put their pencils on paper. I find this to be an almost disgraceful performance by the DOE and I’m not here to pontificate, but I am angry that they tarnished the reputation of a district that has more challenges than any district in this state probably, cause of the special needs, the impoverished of the community. But that’s not to give an excuse here, but you have made remarkable strides and I really, really challenge any Department within this state that would unilaterally decide that they’re going to impose or question something without asking you for an answer. This is a ridiculous way for us to operate on behalf of our children. And I’m tired of it and I intend to follow-up with Secretary Godowsky. If I don’t get an answer for this, and his answer isn’t going to be responsive, I do have another letter prepared that I will release to the press and I’m telling you, it does not look good. I would ask the Chair of the Education Committee, and to think over it, the fact that we don’t get an appropriate answer to where we are today and how this embellishment of no facts or answers has caused a situation of turmoil, an anxiety, that has pitted charter schools against traditional schools for dollars. I’ve asked the Chair to consider that if we don’t get a response to hold hearings on this charge. Between now and then there should be a corrective course by DOE. This is not a one-sided issue. This is not something that you’re on the defense about. This is about due process. There has been no due process in the immediate discussion of this from May till now. No due process.

Kevin Ohlandt (“The Blogger” or “Sneaky Snake Blogger” as one person called me last week): I have two questions. Newark Charter School referenced a meeting with Dr. Andrzejewski that would be taking place in regards to this subject, the local cost per pupil. This is more for Dr. Andrzejewski. Were you aware that this would be coming up, I guess, last March or April?

Dr. Robert Andrzejewski (Acting Superintendent of Christina): I never met with the board of Newark Charter. I met with Greg Meece on the referendum. This issue we talked about has an ongoing history. And that was it. At some point, I offered to meet before the Board President to go through a similar thing.

Ohlandt: Senator Sokola had mentioned, in an email, something about funds going from $700,000 in 2011 to $9.2 million last year or the year before. Do you know what that was about and why he would choose that flashpoint in time to use in this issue?

Silber: I’ll go back to a couple of comments. If you take a look at the composition of the students within the Christina School District, and almost any other district in the state and certainly with charter schools, you’ll see that Christina School District has a significant higher population of students with special needs, not just within special programs but within our district. I can take a look at what has transpired over the five to seven years. There has been a very steady increase in our tuition tax rate as a result of needing to generate those dollars. Some of those programs, as I said, are unique to Christina. But where the Dept. of Education chooses to put those dollars… if it were my call, it would in that tuition fund. But if their putting it into the district specific program bucket, you’re going to see those dollars increase dramatically. I have no knowledge as to what causes them (the DOE) to put something in bucket A versus bucket B. All I can do is suggest that during one of those years, as I took a quick look over the past five years, we had a drop in dollars over on the tuition side. I can tell you, or our board can tell you, I don’t think I’ve ever generated a financial statement for the district that has shown our tuition related expenses were for students with special needs has gone down. If anything, it has consistently gone up. That’s a triggering question of… I don’t know who does the reports. I can’t direct you to go see Bob Silber at the Dept. of Education. That is their report. They should be held accountable and transparent for what’s behind those dollars. I would love to be able to see it to argue it, to challenge what should go to any one bucket if you will, but that’s obviously not a part of the process with the Department.

Bill Doolittle (Special Education Advocate): Did the Department ever provide a full list of the accounting codes they intend to move to 9800 or 98 class and the amounts for each district in those classes?

Silber: For this year?

Doolittle: For their initial intent.

Silber: No. The only thing that has transpired was, as I said at the beginning, there was a request from the Department, “Every business manager go through this list.” And they generated, when they sent that list out, probably, if I had to guess, the top 15 rows were items that they specifically said, “Yup, these are items we already know the answers to. So for Christina, the other 254, you have to tell us one way or the other.” I think one of the important things to recognize is that every organization, it doesn’t matter if it’s a charter school, a traditional public school, or a business entity, or any organization. You have to make decisions around budgets and you have to be able to depend upon systems associated with that. So if there are variations, something that’s going to happen that creates a wild swing, you can’t afford those things to occur. In the public education arena, one of the issues that we tried to bring to the Secretary’s attention, it was the longer you delay the communication around this process or the challenges to the charter schools, the less informed they’re going to be. Every charter school should have been told, by the Department of Education, that for FY2017, this current school year, every one should have been informed that expect your local cost per students for the Christina School District to go down this year. Because the Christina School District had reduced our local unrestricted expenditures by about $9 million dollars last year. The department was aware of it. Did the Department inform the charter community, “Brace yourself, this is coming”? At our board meetings, we clearly articulated our charter bills for last year were predicated upon the prior year. They will not feel the pain we are feeling this year until the following year. Just as when we are successful in an operating referendum, the monies don’t hit until the following year and then the following year after that from a sequencing perspective route how the law recognizes what local costs per student are. I don’t know if that answered your question.

Doolittle: I think the answer is DOE still hasn’t told everybody what they’re doing.

Silber: No, no. They’re given a list and some of the response around some of the detail had to be pulled. So, as an example, in this list that they provided to us initially, they said MCI, minor capital improvements, would be included. Well the language associated with match taxes forever has been bundled with MCI. They were called MCI/Match. And our tax warrants, all districts, up and down the state, are predicated on its match dollars. It includes funds that are match for minor capital, and match for these unique legislative driven programs. It wasn’t until we asked a question that they said, “No, all of those programs that legislators approved and have been included for the past 14-17 years, they’re no longer going to excluded, they’re going to be included.”

(Editor’s note: I know for a fact that any charter school that went through a charter renewal or modification process with the Charter School Accountability Committee at the Delaware DOE in FY2016 was told to expect this.)

Kowalko: A follow-up, on that very statement you just made. They said that, without you having any ability to or chance to retort? They assumed that, presumed that, decided that? Did they say why it shouldn’t be done that way?

Silber: Their answer, not to me but to another business manager, was that they believe they are interpreting the code correctly.

Kowalko: I just want to clarify one thing for Mr. Ohlandt. Correct me if I’m right here, or wrong here. There is not a 98110 that had several hundred thousand dollars in it that now has $9 million in it?

Silber: It’s not that simple. No.

Kowalko: Cause that seemed to be the message…

Silber: Yes.

Kowalko: …that was put out there and resonated. I just wanted you to confirm it. Thank you.

State Rep. Michael Ramone: First off, thank you. This is very helpful. It definitely solidifies and clarifies the perception, at least for us, to be able to speak intelligently to people and say what the heck is going on. You just said the interpretation, interpreting the code correctly, and to me, it seems the biggest issue is not only communication, which I agree with Representative Kowalko, this should have been handled differently with different people at the table. Whatever. It is what it is. I think communication could have been better. I think clarity is an issue, and the word that you use- interpretation- it sounds to me that the interpretation that used to be the interpretation is a different interpretation today. I’m not looking for a comment. It’s my perception of what I’m hearing. So, I guess, to me, a big question, and maybe the dialogue should go to the Chair and the Co-Chair of the Education (Committee), do we need to do anything, in your opinion, as the guy doing the work, as the manager’s opinion to clarify the current law so their isn’t, quote, an “interpretation” maybe one year that would be a different interpretation next year. Or even have new laws added. And I’m not asking you to answer that today, I’m saying that’s a discussion we need to have. But a point of clarity I do need to hear, because I don’t know if I’m interpreting what you wrote or what you said here, but right or wrong, is there an issue or was there an issue with the referendums that were passed in the specific designation of how much tax money, or the referendum was going to be added? Are you suggesting that there is a question of how we’re passing or wording the referendums we are passing or not? Because the way I’m reading that it seems like some of the lack of clarity, or quote “interpretation”, that they have seems to stem from the verbiage as its written in the referendum that was passed or am I interpreting that wrong?

Silber: I would argue that, again I would preface that by saying I didn’t author the document, the document that was put before the community was specific. It said “You will use the money for the following programs. Let me give you a shift for a moment. It didn’t come to pass but you can use this to crystalize the thought. This last year, Brandywine School District, as some of you may know, ran a referendum that failed. That referendum had multiple parts to it. One of the parts of that referendum was, “Will you guys give us additional money so that we can build turf fields?” A very specific request. And if the answer to that question had been yes, that money coming into the Brandywine School District, for the years that they were asking those dollars to follow, could not have been used to pay for teacher salaries or higher administrators. It would have been used for the purpose intended by that referendum, similar to the referendum that we had in 2003. The interpretation that I would get from the actions of the Department of Education, as I’m trying to do today, would suggest that once those dollars came in, that were a very specific purpose for Brandywine, to be used to build a turf field, would then the following year have to come out of their discretionary funds to help support their charters.   And I don’t believe the intent, it is very clear, we’re giving you money to build this, or we’re giving Christina School District opportunities for these programs. There are a number of ways, a number of questions, in our perspective that go around the Christina School District and programs that are unique to the Christina School District. A question could be asked when a parent chooses not to go to the Christina School District and chooses to go to the Red Clay School District through the choice process, are they leaving the programs of the Christina School District they took advantage of, if they leave the Christina School District to go to Kuumba Academy, then yes, they are leaving the programs of the Christina School District. So in one respect, to look at those unique programs and say “they’re unique to the Christina School District,” and the taxpayers agree to that. That’s why it’s restricted to you for these particular purposes. What the Secretary and the Dept. of Education are suggesting is that those dollars that are restricted over here move over here as an unrestricted basis. And what I’m suggesting is that in 2014, when the Department said, “No, they’re restricted,” they made a decision that it couldn’t move over here to unrestricted. I’m not necessarily sure that it’s about wording or it’s about interpretation. I think it’s more around intent. Is the intent to find ways to increase the amount of money flowing to a charter school as opposed to what should? That’s an intent question that my personal perception may not necessarily… Everything I’ve tried to share with you today is a statement of fact.

Ramone: Let me just follow-up, because what I think, I understand what you’re saying. My question is, the monies, the referendum…First of all, referendums are, we have to find a different way to… they’re not working. I think everyone in this room agrees on that. But that’s the beast we’re dealing with. In order to make them more plausible, more acceptable, more digestible, for people to have more clarity on the taxes you’re raising that might pass in the referendum, you started become very creative in the referendum requests, which I actually thought was a good thing. All I’m asking, is in that creativity of making very specific… letting people have a better idea of where the money was going and how it was going… was there a lapse in our legislative body in not clarifying the laws or doing something that makes something more specific, and I don’t mean to say it this way, but then yes, it would take discretion away from the Secretary of Education and whether it’s Joe Schmo today or Peter John tomorrow, but they would have less discretion, it’s clear, it’s a law, we should, is there something that we should be considering or would you all review whether there is something we should be considering to give clarity so you don’t have any subjectivity to these decisions that could be a little chaotic when you tell everybody that one year it’s one way, the next month (meant year) it should be…

Silber: The best way that I can answer your question Representative, is to state the following- The Dept. of Education this year has taken actions that are substantially different than the actions that they’ve taken for any number of years. The laws that are on the books for the past 14-17 years didn’t seem to have that same degree of challenge. Something triggered this year that all of a sudden those individuals that are currently at the Dept. of Education are now saying that something’s wrong. So if there is a question associated with that, again, what was the impetus behind making the change? Is there someone saying, “Okay, here’s a flaw, I’m going to take advantage of it?” Again, I come back to the initial statement. The district does not make these decisions. The district does not define, the State has to define process to prevent me from doing just that.

Part 2 will be up later tonight or tomorrow morning!  Stay tuned!