Delaware Auditor Report For Certain Eyes Only On School District Tax Rates For FY 2015 & 2016 Raises Questions

The Delaware Auditor of Accounts office released a report today on School District Tax Rates for the past two school years, Fiscal Years 2015 and 2016.  It shows many school districts receiving more in taxes than they were allowed based on the tax warrants.  While these were not huge amounts in many cases, a few districts raised red flags in my book.

But why is the tuition tax not included in this report?  Why is their no inspection by the Auditor’s office to make sure those funds are allocated where they are supposed to and not elsewhere?  This report is lacking in many details.  While it caught a few things, it is not enough.  Under Delaware state code, the Auditor’s office is failing in their fiduciary duty to perform what is required by the law.  You can blame that on funding and staffing issues for the Auditor of Accounts office but if Delaware State Code indicates a state office must perform a duty necessary to adhere to state law, the General Assembly MUST fund that office so they are able to carry out those duties.  Since they haven’t been, the General Assembly has been derelict in their duty.

What kills me is the end of the report:

This information is intended solely for the information and use of DOE and the management of the school districts.  It is not intended to be, and should not be, used by anyone other than these specified parties.  However, under 29 Del. C. 10002(1), this report is a public record and its distribution is not limited.  This report, as required by statute, was provided to the Office of the Governor, the Office of the Controller General, the Office of the Attorney General, and the Office of Management and Budget.

So how many reports are out there that the public has not seen?  I have a feeling it is quite a lot.  I smell a FOIA coming because I want to see ALL the reports that are considered public but are not listed on the Delaware Auditor of Accounts website…

Updated, 3:13pm: This is listed on the auditor’s website, but after State Rep. Earl Jaques admission that he has seen annual audits performed by the Auditor’s office for each district, I have to believe there are a ton of reports the public never sees.  Why all the secrecy?

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Homeowners Set To Get Screwed With Governor Carney’s “Shared Sacrifice”

Yesterday, the Delaware Economic Forecast Advisory Committee (DEFAC) projected Delaware’s budget deficit for Fiscal Year 2018 to be $395 million dollars.  This is up ten million from the last time the committee met.  Tonight, the Christina Board of Education will discuss the impact on taxpayers.  Governor Carney is suggesting school boards raise what is known as the match tax (the portion the state matches certain funding) by having the district school boards levy the tax without a referendum.

Christina’s Chief Financial Officer, Bob Silber, created an impact budget for how this increase would hit taxpayers.  In the below example, a home that just sold for $224,000 would see their property taxes raised $46.50 with the match tax scenario.  Keep in mind, this is based on the property assessment value of $63,700, which is almost a quarter of the home’s actual value based on the sale price.

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This is not the only sting homeowners, as well as all Delaware citizens, will feel starting July 1st.  State taxes, collected from paychecks, will go up for most.  State employees will see higher insurance rates.  Salary raises for state employees will most likely disappear.  Services will be cut.  It is all rather bleak.  Our General Assembly has utilized every single benefit to state funding, such as the proceeds from the tobacco lawsuit, without realizing those perks were eventually going to disappear.  State revenue does not match state expenses.  Companies, such as DuPont and soon Barclays, left Delaware for the most part, causing a severe lack of revenue and jobs.  Delaware has, and will continue to, spend more than it makes.

With the Wilmington Education Improvement Commission, there was a request to raise property assessment values.  While Delaware’s assessment values are still far lower than most states, it also created an influx of senior citizens moving to The First State because of that.  But the ability of school boards to raise property taxes, already through the special education tuition tax and soon the match tax, could have a negative impact on the desire of the elderly to move to Delaware or even stay here.

Meanwhile, there has been no action on the Governor’s part to institute the basic special education funding for students in Kindergarten to 3rd Grade.  State Rep. Kim Williams introduced two bills in the last two General Assemblies to take care of this but neither bill has moved forward due to the state funding issues.  Oblivious to all the future costs by not having this essential funding in place, our state continues to bumble through special education with this very real omission to the foundation of special education students who are just beginning to manifest their disabilities.  The projected amount to fund what should have always been there is a little bit less than $13 million a year.  By not providing that funding, the state relies on the school districts or charter schools to pay for these services.  Either way, it has a negative effect.  If the school does provide those services, it results in more of a drain on local funding.  If the school doesn’t, they are not only breaking special education law if the child qualifies for an Individualized Education Program, but they are also looking at higher costs for that student in the future by not providing that foundation.  So that $13 million a year mushrooms to much higher costs for these students down the road.

Just this morning, State Rep. Earl Jaques announced a new bill on Facebook creating a fund in the Delaware Dept. of Education budget for an Educational Support Professional of the Year award.  Delaware has 16 school districts, 3 vocational districts, and over 20 charter schools.  This bill would allow each district (20, which includes one award for all the charters) to give their winner an extra $1000.00.  The overall winner would get $1,500.00.  While $21,500 in the DOE budget doesn’t amount to much, it is symptomatic of the mindset of far too many of our legislators.  Instead of finding solutions, too many of them find ways to spend even more money.  If our state was swimming in money, I would be okay with this bill.  But not now.

Delaware’s legislature is going to have their hands full when they return from Spring Break next Tuesday.  This budget deficit is not the result of a national recession like what we faced in 2009.  This is Delaware created.  We spent our way out of the recession and now we are paying the piper.  Governor Carney looks like a deer running towards headlights with his reactions to this ever-increasing budget deficit.  I predict he will have a very tough time getting re-elected in 2020 if this trend continues.

17 Who Will Make An Impact In 2017: Kendall Massett

Kendall Massett, the Executive Director of the Delaware Charter Schools Network, will soon be standing at a crossroads.  As someone who preaches district and charter collaboration on one hand, the other hand is busy trying to find ways to get more district money to follow students at Delaware charters.  This dichotomy is going to define the future of charter schools in Delaware.

As anyone breathing in Delaware is well aware, fifteen charter schools sued the Delaware Dept. of Education and the Christina School District over funds they felt should have been going to charter schools.  The defining moment in the lawsuit: when Secretary of Education Dr. Steven Godowsky reversed changes to the local funding formula for school choice payments after September 1st.  They could have been patient and allowed Godowsky or the next Delaware Secretary of Education and the General Assembly the opportunity to figure it out.  But instead, they took the legal route which was championed by Kendall Massett.  As a result, the law firm of Saul Ewing will get $300,000.  How many teachers could be hired with that kind of money?  How many students could have received a paraprofessional in a school room bursting with over 25 kids?

If the collaboration Massett truly desires took place, this lawsuit wouldn’t have happened in the first place.  If there is blame to be thrown around regarding who was at fault with the local funding formula, that blame lands solely at the feet of the Delaware Dept. of Education.  They should have been the ones answering the questions for the charters.  Christina performed their due diligence and submitted their exclusions to the Delaware DOE.  This originated last Winter, with Newark Charter School calling in the DOE who apparently “confessed” to the powers that be about the exclusions submitted by Christina.  The DOE had an opportunity right then and there to make good on this.  The charter schools could have gone public with this information and forced the DOE to do something about it.  And if that didn’t work, they could have brought in the General Assembly.  But instead, they kept this a secret for many months.  They had to know when the public found out about this they would be understandably upset.  These were huge funding changes with charter payments.  This was not a wise move for the charters involved.  By alleging that Christina was purposely withholding funds from these charters when the district did the same thing they had been doing for 12-13 years, which I might add was completely legal since the DOE approved them, the charters started a war.  It is not that difficult to see this was the original intent.  It boils down to Greg Meece having a hissy fit because his school wanted more money and if Christina wouldn’t willfully give it up, he was going to punish them and cast blame.

In an article on Delaware First Media, written by Meg Pauly on December 1st, Massett weighed in on the Christina Board of Education signing the settlement with the fifteen charters.  Massett, as the go-to spokeswoman for Delaware charter schools, seemed to have some very big misunderstandings about what this settlement really is.

She said the decision most likely won’t require a vote from each schools’ entire board of directors, which could make it easier to approve.

“Because there would not be any money going out – they’re not paying out a settlement, it would be money coming in – there’s not really a fiduciary responsibility that the board would have to approve,” Massett said.

There is certainly a fiduciary responsibility stemming from this settlement.  The charters, according to the settlement, would have to make sure the funds were allocated to certain functions similar to what those funds were used for in the Christina School District.  As well, the Pandora’s box called tuition tax funds were brought up in the settlement.  It states:

In the CSD settlement agreement, CSD has agreed to catalogue and describe, for DOE and CSD Charter Schools, those services provided by CSD to children with special needs (“Special Needs Services”) that are funded in whole, in whole or in part, with revenues generated by the levy of the so-called Tuition Tax by CSD.  The objective of this undertaking is to determine whether CSD shall be financially responsible under Section 509(f) for funding the same or similar Special Needs Services provided by CSD Charter Schools to their CSD resident students.  If requested, DOE will participate in the discussions and inquiry described in this subsection, and, where necessary, shall enforce this provision.

So what does Section 509(f) of Delaware State Code say?

For any student, who because of educational need requires services that are appropriately financed pursuant to the provisions of Chapter 6 of this title, either at the outset or subsequent to a decision to enroll in a charter school, the student’s district of residence shall remain financially responsible for such student and the charter school shall receive from such district a payment determined in accordance with the provisions of Chapter 6 of this title.

Which brings us back to Chapter 6 of Title 14:

§ 604 Special programs.

(a) If any pupil is counted in the preschool, intensive or complex unit and attends school in a program operated by a district other than that in which the pupil resides, by an agency of the Department of Education or is in an approved private placement pursuant to § 3124 of this title, the receiving district or the Department of Education shall collect a tuition charge for the nonresident pupil, provided approval for attendance has been granted by the sending district. Such tuition charge shall be paid by the school board of the reorganized school district in which the pupil is a resident from the proceeds of a local tax levied for this specific purpose, except that in the case of a district assigned by the Department with the approval of the State Board of Education to administer a school or program for children with disabilities, or special programs approved by the Department of Education for persons without disabilities such as programs for bilingual students or programs for pregnant students, the district so assigned shall be both the sending and receiving district in regard to that school or program and is authorized to collect tuition charges accordingly.

(b) In determining the tuition to be charged for a pupil counted in the preschool, intensive or complex units or for a person without disabilities attending approved special programs, such as bilingual programs or programs for pregnant students operated by a district other than that in which the student resides or by an agency of the State Department of Education, the receiving district or the State Department of Education shall compute the tuition by adding such receiving district’s share of educational related expenses as allowed by the Department of Education regulations. The sum so obtained shall be divided by the total number of pupils in the special program as of September 30 of the current school year. The resulting figure shall represent the amount of the “tuition charge” per pupil.

(c) In determining the tuition charged to the sending district in the case of private placement for children with disabilities, tuition will be defined as in § 3124 of this title and the sending district will be charged 30 percent of the total tuition cost. The remaining 70 percent will be covered through funding provided by the State Department of Education from the annual appropriation for this purpose.

The charter schools get IDEA Part B funding from the federal government.  They receive special education funding from the state for Basic Special Education for students in pre-school (if they have those programs) and students in 4th-12th grade.  They get intensive and complex funding for students in all grades.  Where the tuition tax gets very complex is how it is determined.  The local school board votes to set the current year’s tuition tax rate for taxpayers.  It is not something the district can change on a whim.  And state code is very specific about what those funds can be used for.  What makes Christina very unique is that they are the management district for several special needs programs.  Those are not funds the charter schools could touch based on this settlement unless they are providing comparable services.  Then we get into the definition of a comparable service.  Would Gateway Lab School be considered the same school as the special schools within Christina?

Where Kendall, as well as the entire settlement, performs a massive overreach is in this particular section.  It is tampering with state code in unbelievable ways.  State code does not legally have to honor a settlement stemming from a lawsuit between a school district and a group of charters.  As well, it can not, and should not, dictate what a state agency has to do.  That is what we have our General Assembly for, to create and amend laws.  We can certainly discuss the merit of some of those laws, but that is the very essence of the Constitution of Delaware.  A settlement should not create new contradictions that try to negate existing law.  Which is why Secretary Godowsky wanted the General Assembly to intervene in this entire funding process.  I am assuming the Delaware DOE signed their settlement agreement with the fifteen charters.  Which is even more concerning in my eyes.  The fact they would allow changes in Delaware law without approval of the legislative body charged with performing that task.  A settlement cannot create laws or regulations.

What this section does is change the duty of charter schools in regards to their adherence of special education law which they should already be doing to the best of their ability.  This settlement is much more than a “fiduciary responsibility” in nature, as Massett put it.  Something that magnanimous in scope should be approved by a charter school board, not a Head of School or even an interim principal in one case.  It is fiduciary in a sense that the charters would receive more money from a tuition tax, but it would require an oversight of the special education services within each of those charter schools to make sure they are performing at a comparable level to Christina.  That could involve extra resources and staff those charters may not have.  Could a charter hire that staff and pay for those resources and then submit for those tuition tax funds?  Or would those services and staff have to already be in place to be eligible for those funds?  The settlement does not define that.

If, for some odd reason, legislation is created out of this part of the settlement, it would require districts to collect even more tuition tax from taxpaying citizens within their district.  They would have to because more would be required to go out to charter schools for those students.  They should not be tasked with divvying up the existing tuition tax they receive for the students within their own district with those needs or funds they are already sending to special education schools outside of their district.  That would take away from those students.  But here is the major problem with this: the local boards have to determine the tuition tax rate in the summer before the school year starts.  They base this on projections within their own district.  How can they determine the needs of special education students who reside in their district but attend charter schools before the school year even starts?  For some they can, but special education can be very fluid, evolving from year to year.  It is hard enough for the districts to do this for their own students.

If Kendall Massett wants more collaboration between districts and charters going forward, she needs to stop drawing this line in the sand when it comes to money.  She is going to continue to piss off the districts and they will not want to collaborate with the charters who keep demanding more and more from them.  Districts can’t always get performance funds or donations from foundations.  They can’t always have silent auctions like many charter schools do.  All Delaware public schools have the capability of applying for grants from the state or the federal government, including charters.  Districts don’t get to keep their excess transportation spending if they set their budget higher than what they actually spend.  And charters are free to use this money as they please.  So please, tell me Kendall, if the charters are getting what you view as their “fair share“, will you promote removing those extra perks for the charters that districts don’t get?  When it comes to education funding, there is a crystal-clear difference between what a charter school needs and what an entire district needs.  In some ways, it is like comparing apples to oranges.  You can’t complain about charters not receiving capital funding.  That was the way the law for charters was set up.  It was the price of admission into Delaware public education.  So by default, on paper, it would appear charters get less than districts for that very reason.

Some could argue that this latest misstep by the charters is just more of an ongoing agenda to privatize public education.  Just one more chunk taken from school districts and flowing into the hands of charter schools which are actually non-profit corporations.  By state law, those corporations are required to file IRS tax returns.  But because of loopholes in IRS guidance, the one charter school who actually started this whole charter payment mess is the one school that does not file those tax returns.  The guiding force behind the lawsuit was Greg Meece and Newark Charter School.  They created the very conditions that led to the lawsuit.  The settlement promises severe disruption to all Delaware schools involving special education and funding.  But Newark Charter School is not transparent with their own finances the same way the rest of Delaware charters are.  I have grave issues with that.  And I have no doubt in my mind Kendall is aware of this.

In a News Journal article from December 5th discussing the settlement details, written by Adam Duvernay, Kendall states the following:

“I’m glad everyone will have a seat at the table, and that the process will be transparent, so we don’t find ourselves in this situation again where charter schools go for years without answers and feel like they need to resort to legal action to make their voices heard,” Massett said.

What about the questions many Delawareans have been asking the charter schools for years without any real answers?  Like how certain Delaware charter schools can cherry-pick students in defiance of state and federal law?  When does Newark Charter School, which created this whole mess, finally implement their plan to balance their demographics at their school?  When does Newark Charter School become fully transparent with their own money the way every other Delaware charter school is required by law to do?  Massett cherry-picks her statements.  She wants districts to answer any questions charters have, but when those answers are needed by others, she either deflects or states it just isn’t true.  And when people do take legal actions surrounding charter demographics?  Like when the Office of Civil Rights asked for all charter school applications a couple of years ago going back the two years before that request?  The Delaware Charter Schools Network became the organization tasked with collecting that information.  And what happened?  Massett informed the Office of Civil Rights the charters did not know they needed to keep that information.  And then there is the matter of the now two-year-old complaint from the Delaware ACLU against the State of Delaware and Red Clay regarding practices of segregation and discrimination from some Delaware charter schools.  Kendall called that “a myth.”  Two years later and that complaint has gone nowhere.  Forcing someone to sit at the table with a menu where there are two choices, our way or no way, is not collaboration.  It is not legal action.  It is manipulation that doesn’t belong in education.  With education, every decision eventually affects students in a good way or a bad way.  For far too long, those decisions have existed for the benefit of charter school students.

Getting real here, Kendall’s job is to promote charter schools and to serve as a buffer between them and the state in certain areas.  At heart, Kendall is a lobbyist, seeking to influence the General Assembly and the Delaware DOE in ways that will benefit charter schools in the state.  Charter schools pay dues to the Delaware Charter Schools Network.  In a sense, they are very similar to some of the roles the Delaware State Education Association plays in education politics.  But the difference is that DSEA represents the teachers in district schools.  They promote or oppose legislation that will benefit the teachers within their organization.  I have no doubt DSEA would love to have charter school teachers unionize.  But the Delaware Charter School Network exists for a niche within public education that almost serves as a parasite on the districts they feed from.  It takes from the host body and sucks the energy out of it.  That is the price of school choice that Kendall cannot seem to fathom.

In 2017, education will once again be front and center in Delaware.  The corporate education reform movement, led by the Rodel Foundation in Delaware, will become more pronounced with the implementation of the Every Student Succeeds Act.  But in some ways, it almost seems like the charter movement in Delaware and those who advocate for them, seem to have become more emboldened with the election of Donald Trump as President of the USA.  He promised billions of dollars to charter schools.  To add salt to that wound, he appointed Betsy DeVos as the next U.S. Secretary of Education.  A charter school lover if there ever was one.  I have no doubt charter advocates across the country are feeling almost empowered by these events.  Supporters of public education are very worried about what will happen to further erode an education system that has been in place long before the very idea of a charter school was introduced.

In Delaware, Kendall Massett will continue to have great relationships with the Dept. of Education and the State Board of Education.  She will exert her influence on the General Assembly.  If any bill is introduced that will negatively impact charter schools, she will wield her power and influence to put a stop to it.  She is backed by some very powerful forces in Delaware that will not be trifled with in any way.  But none of these forces see what their choices and decisions make to education as a whole.  If charters and districts were funded the same way as the vo-tech schools in Delaware, I don’t think the issues with charter schools in the state would be as big.  But this parasitic relationship between districts and charters is paralyzing to education in Delaware.  There are other things that perform the same damaging results,  but we can control how this particular relationship evolves.  Districts and charters aren’t going anywhere.  If charters want to co-exist with districts and have true and meaningful collaboration, they have to stop these games.  And Kendall Massett, as the spokeswoman for the charters, will have to take on a different mantra.  It isn’t a question of choice at this point, it is an answer that demands immediate implementation.  Fair goes both ways.

If I were Kendall Massett, I would actually recommend the Christina Board of Education rescinds their vote on the settlement.  Funding is important, but shaking down a district like this which will only tick off the other districts in the state, is not something to be proud of.  It is not a victory when students continue to pay the price.

The Christina Settlement Memes You May Not Have Seen

Last night, I posted a series of memes on Facebook.  I also put them on Twitter.  I do recognize that some folks don’t participate in social media, so for those 21st Century hold-outs, here they are.

 

The Christina-Charter School Lawsuit Is Now Public!

That didn’t take long.  Three days ago, the Christina board agreed to the settlement.  Last night it went public.  Delaware Liberal has the whole thing in all its glory.  From what I’ve read, the district is off the hook for any back exclusions.  There will be a one-time payout for this year of $150,000 plus the per student allocation from a 2003 referendum that amounts to 10 cents for every $100 worth of assessed property value.  Christina will pay out the charter school payment part of the $5.5 million they received from the last fiscal year.   But going forward…

DOE will have to determine the exclusions and let the charters review them before the annual determination is made.  Tuition tax will now be a part of the local district payments to charter schools if the charter has comparable special education services to Christina.  Which explains why Newark Charter School took in a special needs child over the summer.  As the parent wrote in comments on this blog, this student was 17th on the wait list at NCS.  One day the parent got a call from the school and her child was in.  That would mean a student left and sixteen parents said no or left the school.  The parent did reach out to me to let me know NCS does not have a football team and that with students who may have moved played a factor.  As well, the parent states the school was not aware her daughter had special needs and had to scramble a week before school to make sure she got a one-on-one para.  They also said there are quite a few students at NCS with either Downs Syndrome or autism that have one-on-one paras.

The settlement also allows for both parties to claim or not claim exclusions from the Match tax.  Which means more headaches in the future.  I have to wonder how all the other school districts feel about part of their tuition tax now going to charter schools if the charters meet that “need”.  Is this why Appoquinimink hiked up their tuition tax last summer?  Did they know what the charters were planning back then?

This settlement releases the charter schools claims against Christina and their CFO, Robert Silber.  But they also filed against the Delaware Dept. of Education.  I don’t see language releasing the DOE.  Is their suit against the DOE still alive?

I would attach the Scribd document from Delaware Liberal, but the ink isn’t dry on the settlement yet.  Thirteen charters, the Christina board President, and Silber all signed.  That leaves two more charters.  Not a (legal) done deal yet.  But why aren’t all the signatures by the President of each charter board?   Some are.  Some are signed by the Head of School or a title similar to that.  But the board is the legal entity behind a charter school, not the Head of School.  I suppose it would depend on the ability of a Head of School to legally bind the corporation to this settlement.  I don’t have time right now to look through the bylaws of fifteen charter schools.  I would think an interim principal, like the one at Great Oaks, does not have that kind of authority.

Out of everything I’ve written about this whole Christina/charter school funding war, beginning at the end of August, as well as the countless other articles in Delaware media, one question still hasn’t been answered.  What made Greg Meece, Steve Dressel, and Joanne Schlossberg from NCS request a meeting with the Delaware DOE and Christina to discuss the local funding formula?  In other words, for 13 years, this 2003 referendum and the 10 cent thing was in play.  DOE signed off in it each year.  But Greg Meece found out about this earlier this year which prompted this whole thing.  Who told Meece about it?  Meece would have gone after this a long time ago had he known about it.  So who betrayed Christina?  It had to be someone with inside knowledge of the district’s finances.  Someone who knew a 13 year history of the finances.  Someone with a deep understanding of school finances.  Someone who had the motive and means and willingness to go after Christina.  Someone who didn’t care that this would affect tens of thousands of kids across the state.  Someone who didn’t care that telling Meece this would instantly cause him to bite the apple and unleash a lot of crap on the Delaware education world.  That is cold and unfeeling.  I am about 99.9% sure of who you are.  I’ve known for a long time.  I know how you like to play the long con.  I also know how you play people.  I know who your allies are and who your enemies are.  One day, your actions will come out.  And your justification for this does nothing.  Not when your sins will cause thousands of students who already had less to lose out even more.  You sold out the kids you claim to stand for.  It doesn’t balance any scales and it doesn’t even begin to absolve you.  You aren’t that crafty.  I saw you coming a mile away.

This is a shakedown no matter how you slice it.  The Delaware DOE, who approved the exclusions for all these years, gets the stiff penalty of having to do some more paperwork, something they thrive at already.  In the settlement, Secretary Godowsky escapes any blame by simply stating he wasn’t aware of the exclusions.  Which could very well be true since he wasn’t confirmed by the Delaware Senate until October, 2015.  But all the former Secretaries of Education would have known: Mark Murphy, Lillian Lowery, and Valarie Woodruff.  Why weren’t they named in the lawsuit if the charter schools had allegations going back to 2003?

I see this as just one more nail in the coffin of public education.  Now this opens the door for charter schools to get more funds from a referendum.  Funds earmarked for a district are now questionable.  Unless some shady deal went down at some point between 2003 and 2015, Christina is not to blame.  So why on earth would they settle?  I highly doubt their attorney fees would have climbed higher than the results of this settlement.  There is no possible way ninety minutes was enough time for their board to digest this settlement.  I read it last night and I still have many doubts.

The whole part about Christina paying $150,000 as a “one-time payment”?  That reeks of the amount Saul Ewing will charge the charter schools for their legal fees.  Wasn’t the Longwood Foundation going to pay for them?

This will be seen as a victory by many charter school parents, especially the ones at Newark Charter School.  They will point fingers at Christina and say “See, you settled, it was your fault.”  This is not a win for kids.

Will Delaware Republicans Try To Paint The Wall Red In 10th Senate District Special Election?

The upcoming special election for the 10th Senate District just got very interesting.  As we all know, Bethany Hall-Long will vacate her Senate seat when she is appointed Lieutenant Governor of Delaware.  In February or March, a special election will take place for her seat.  I put up some possible contenders for the seat in an article last Friday.  I assumed the Delaware GOP party would pick John Marino as the Republican frontrunner for Hall-Long’s seat.  But from what I’m hearing today, a new name is being given serious thought on the Republican side…

Did Appo Shoot Itself In The Foot Tuesday Night?

Lastly, to the charge that money was transferred out of the tuition fund, Longfellow said that was true, but said that happens nearly every year and is a legal maneuver.

Additionally, Forsten explained that the money went to funds that help settle costs that aren’t part of the tuition tax budget itself.

Mr. Forsten, could you please tell me what the legal maneuver is that allows Appoquinimink School District to transfer funds out of the tuition fund and how it is legal?

I saw an item on Appoquinimink’s board agenda for last night that said “Tuition Tax Clarification”.  Assuming this was in response to my articles about their tuition tax warrant last month, I figured I would wait until their board audio recording to address this.  But as luck would have it, I didn’t have to wait very long because Kilroy just wrote an article based off WDEL’s article on the subject at their board meeting Tuesday night.  The above quote, taken from the WDEL article, clearly shows that Appoquinimink Superintendent Matt Burrows, Chief Financial Officer Dr. Charles Longfellow, and the Appo Board President Richard Forsten aren’t too familiar with Delaware accounting procedures and policies.

You can’t just take money from revenue collected through a tuition tax warrant and apply it anywhere you want.  That isn’t how it goes.  The law in Delaware is VERY clear about this:

§ 604 Special programs.

(a) If any pupil is counted in the preschool, intensive or complex unit and attends school in a program operated by a district other than that in which the pupil resides, by an agency of the Department of Education or is in an approved private placement pursuant to § 3124 of this title, the receiving district or the Department of Education shall collect a tuition charge for the nonresident pupil, provided approval for attendance has been granted by the sending district. Such tuition charge shall be paid by the school board of the reorganized school district in which the pupil is a resident from the proceeds of a local tax levied for this specific purpose, except that in the case of a district assigned by the Department with the approval of the State Board of Education to administer a school or program for children with disabilities, or special programs approved by the Department of Education for persons without disabilities such as programs for bilingual students or programs for pregnant students, the district so assigned shall be both the sending and receiving district in regard to that school or program and is authorized to collect tuition charges accordingly.

(b) In determining the tuition to be charged for a pupil counted in the preschool, intensive or complex units or for a person without disabilities attending approved special programs, such as bilingual programs or programs for pregnant students operated by a district other than that in which the student resides or by an agency of the State Department of Education, the receiving district or the State Department of Education shall compute the tuition by adding such receiving district’s share of educational related expenses as allowed by the Department of Education regulations. The sum so obtained shall be divided by the total number of pupils in the special program as of September 30 of the current school year. The resulting figure shall represent the amount of the “tuition charge” per pupil.

(c) In determining the tuition charged to the sending district in the case of private placement for children with disabilities, tuition will be defined as in § 3124 of this title and the sending district will be charged 30 percent of the total tuition cost. The remaining 70 percent will be covered through funding provided by the State Department of Education from the annual appropriation for this purpose.

(d) Section 602(c)-(e) of this title shall apply to this section.

And let’s see what Section 602(c)-(e) states:

(c) The bill for tuition charges shall be verified by the Secretary of Education within 20 days after receipt of such bill. No bill for tuition charges shall be paid until such time as it has been certified by the Secretary of Education as being true and correct.

(d) For each pupil attending a public school of another district as of September 30, the receiving district shall bill the sending district and the sending district shall pay the tuition charges per pupil on or before January 1 of the fiscal year in which the bill is submitted to the sending district for payment. In the case of pupils attending the public schools of the receiving district for less than a full term, the tuition charge shall be prorated by reference to the period of time during which such pupils actually attended the receiving district’s schools, provided that attendance for part of any month shall be counted as a full month of attendance.

(e) Any reorganized school district sending pupils to the schools of another district shall levy and collect a tax to pay any tuition charges to the receiving district, and such tuition shall be collected by local taxation within the sending district according to the provisions of taxation as set forth in Chapter 19 of this title, except that no referendum shall be required. The sending district shall estimate the amount of, determine the rate for and levy the tax upon the estimate at the time that regular tax levies are announced to the appropriate taxing authorities, and the levy shall be adjusted annually to correct errors in the estimate as provided for in subsection (b) of this section.

So the tuition tax that caused the Appo board to issue a tax warrant last month is based on Section 604, and only Section 604.  There are additional areas where these funds can be used though, as per House Bill 1 from the Delaware 146th General Assembly:

House Bill 1, 146th General Assembly:

b. The following provisions shall apply to the Preschool unit:

v. Districts may use tuition to pay for the local share and excess costs of special education and related services.

b. The following provisions shall apply to the Pre-K – 12 Intensive Special Education (“Intensive”) unit:

ix. Districts may use tuition to pay for the local share and excess costs of the program.

b. The following provisions shall apply for the Pre-K-12 Complex Special Education (“Complex”) unit:

ix. Districts may use tuition to pay for the local share and excess costs of the program.

So districts can use tuition tax to pay  for their local share of special education and excess costs for each specific program.  But not for Basic Special Education students, just Preschool Special Education students, Pre-K-12th grade Intensive Special Education students and Pre-K-12th grade Complex Special Education students.

In Appo’s FY2017 preliminary budget, they state exactly what the Tuition Tax increase of $818,000 will be going towards:

I submitted a Freedom of Information Act request to the Appoquinimink School District last month which I promptly received.  I had not gone through it extensively until now.

View this document on Scribd

I can see the out-of-district placements for students with disabilities going to Special Schools or day or residential treatment centers going up by $100,000.  For FY2016, they spent $2,441,295 for these students.  In FY2017, they are projecting it will go up to $2,570,633.  That seems like a modest projection based on the history with these payments.  I have no qualms with those figures whatsoever.  What I do take issue with though is the appropriation section #99970020/99999999 Needs-Based going up from $7,148,711 to $7,863,582 without any justification for that increase.  As well, we can see their projected amounts for FY2018 which will generate another tax warrant next year but maybe 10% less than this year’s based on their projected numbers.  But Appo did supply two other documents in my FOIA request…

View this document on Scribd

In this document, we see a seven year history with students in the category of Pre-K, Intensive, and Complex.  Also included are the teacher units generated from these increases.  Note the Pre-K units are going down each year.  On the flip side, Intensive and Complex special education students are going up which generates more teaching units as well as services related to those students, such as occupational therapists, speech therapists, and so on.

View this document on Scribd

Now the district was kind enough to give a breakdown of how much went to each category for FY2016.  I do appreciate that.  It does give quite a bit of insight into where they think the funds should go.  Now keep in mind Appo dated this document 7/20/16.

In their projections for FY2017, they based the FY2016 final figure at $9,590,006.  But in this document, it is $9,424,524.26.  That is a difference of $165,481.54.  So they are already way off on their FY2017 budget by having this amount wrong.  This is what they based their tax warrant on, the figure of $9,590,006 for FY2016, and they are basing their FY2017 budgeted projection off that number.  They are already off.  Even in their board meeting Tuesday night, they gave an amount spent as of 6/30/16 on Local Tuition Tax of $9,508,447.03.  This was the part of their board meeting where they approved the monthly budget as of 6/30/16 based on their Citizen Budget Oversight Committee recommendation.  Even they weren’t given the correct amount.  Do I go by a FOIA request, which has to be legal, or their preliminary budget, or the amount their CBOC provided to the board which comes from their CFO?  I’m sticking with the FOIA figure because that has the latest figures, as of 7/20/16.

Now look at the document and where it says “Indirect Cost” for an amount of $276,709.36.  These are funds they transferred out of their tuition tax revenue bucket into another bucket with no explanation of where it went or why.  So adding what they were already off and the “Indirect Cost”, we are up to $442,190.90, which is over half of their tuition tax increase of $818,000 going towards mathematical errors or shifting the money out of the revenue bucket it was supposed to stay in.  You can’t just transfer funds out and call that a legitimate expense.

Which brings us to legal costs.  In FY2017, Appoquinimink spent a total of $171,783.75 in legal costs for the entire district.  But we are expected to believe they spent $124,279.20 out of that figure just for special education legal costs?  Furthermore, should funds spent on legal costs in a special education dispute where a parent is suing the district be counted as legitimate funds to come out of a tax warrant?  Because I can see at least $28,500 going towards that purpose right off the bat.  That means the parents feel the school did not provide a Free Appropriate Public Education for their disabled child.  And if the school is paying those attorneys, that means at the very least there was some type of settlement involved whereby the district paid the opposing attorney as well as their own attorney costs.  As well, we see a payment made to another school covered under legal fees.  This could be a case where a parent sued the district and the district agreed to pay the tuition costs for another school.  That was for $25,575.  So with these VERY questionable legal items Appo feels they can cover under funds generated from a tax warrant, we are looking at another $54,075 in questionable charges in their FY2016 tuition tax expenditures, which brings us up to $496,265.90.    We are now up to over 60% of their $818,000 tax warrant increase.  I won’t even get into the fact they are paying a school nurse under legal fees.  Shall I keep going?

There are legitimate expenses they put on this document.  Teacher salaries and their benefits are okay to have in there.  Related services, which means “Specialists”, according to House Bill 1, does have some caveats:

“(12) Specialists. All related services units are earned at the district or charter school level. Preschool, Basic, Intensive and Complex related services units earned shall be used to support related services needs of students in those units. Districts may use earned units to hire any related services staff necessary or alternatively choose to provide all or part of those services through a contractual arrangement with a public or private agency. When providing services by contract, the dollar value of the contract shall not exceed the authorized salary for a teacher at the Master’s level plus 10 years and employed for a period of 12 months per year as provided for in 14 Del. C. § 1305 of this title, divided by the number of months in the terms of the contract. Partial unit funding is provided based on the dollar value of the unit. Any school district wishing to use funds under the contractual option set forth in this section shall make application to the Department of Education for that use, provided that the State Board may review any objection to the Department decision;”

So, as an example to this, Appo currently has two contracts with Therapy Services of Delaware for three occupational therapists and two physical therapists.  This contract is for FY2017, and I could not find one for FY2016.  But given that they keep projecting up with students who would need these services, it would stand to reason the contract for FY2016 was either similar or less.  But I will operate on the assumption it is similar.  That means, based on the above law, the district can’t pay out more than $60,558.00 for a full-time “specialist” based on the Appo Salary Schedule for a Teacher at the Master’s level plus 10 years.  In the case of Therapy Services, the contracts call for three full-time occupational therapists and two full-time physical therapists.  So they can’t pay more than $302,790.  In FY2016, according to Delaware Online Checkbook, Appo paid Therapy Services $302,442.63.  So it appears they are acutely aware of the laws surrounding these special education services given how very close to the maximum number they could go up to in the contracts.

The reason I brought up a situation where they are doing everything by the book was to illustrate they do know what they are doing.  But for some reason, maybe because of how they are audited by the DOE for certain special education costs, they are able to curtail other things that have a dramatic effect on what they are including in the tuition tax part of their budget.

I could go through more of these, but I believe you get my point.  Appo’s $818,000 tuition tax increase is based on very faulty math, bad accounting procedures, and violations of Delaware state code from their previous fiscal year.  The expenses they are covering under tuition tax don’t hold water with my tests in some areas but in others they do.  Yes, I do own the fact that when I originally wrote about this issues, I seriously questioned where $5 million disappeared to.  But I quickly corrected that a few days later when I found the missing $5 million in related services.  I just didn’t account for the related services amounts in my initial article.  But when I’ve already killed over 60% of your increase of $818,000, and I have barely scratched the surface of your entire tuition tax expenditures for FY2016, I have no doubt that percentage would increase.  So you are NOT justified Appoquinimink School Board of Education, to approve a tuition tax increase costing the Appoquinimink property owners an additional $7.76 per $100 of assessed property values based on this.  As a board, and some have done this in Delaware so they don’t raise the ire of local taxpayers, they can forego or decrease a tuition tax increase based on the projected increase.  But what you can’t do is charge more than what should be the budgeted amount.  Something Longfellow seems to think is the opposite case according to WDEL:

He said, not only is the district justified to increase the tuition tax based on enrollment, Appoquinimink isn’t even increasing the tax to the fullest extent permitted.

Would I expect the Appoquinimink School Board to know these facts?  Not really.  Unless you really do some digging like I have, you won’t just find these things on a piece of paper looking at it.  But should Longfellow and Burrows know these things?  Absolutely.  Let’s not forget, their board approved their FY2017 Preliminary Budget and the tax warrant before they approved a $500 increase for administrators in the district at their July board meeting.  I called that a sleight of hand on Longfellow’s part.  I believe he knew exactly what he was doing.  But the board just skimmed right past that part.

“It was just a case of someone not understanding everything,” Board President Richard Forsten said to WDEL after the meeting.

I will give Forsten that.  I knew something was wrong and I made some incorrect assumptions.  But my gut instinct still told me something was wrong even after I found my error.  And then I found Appoquinimink’s errors.  To be fair, I received the FOIA request two days after I requested it.  But did I get everything I asked for in the FOIA request?

For the most part, I did.  But what the FOIA did not cover, and no one has been able to answer, is the breakdown of funds allocated in the categories of related services for intense and basic, as well as allocations for occupational therapists, physical therapists, speech therapists and so on.  By lumping so much of their special education costs into very broad categories of “consultants”, “other professional service” or “medical services” would not give any member of the public the ability to see exactly what is going towards tuition costs.

Furthermore, neither Burrows or Longfellow ever replied to my email requests to discuss these matters after my original article on July 14th.  Not one single email, phone call, or response.  Until their board meeting last night.

Part of the blame for this lies with the state.  We have a Division of Accounting within the Department of Finance.  We have a State Auditor.  We have an Office of Management and Budget.  We have a General Assembly.  They should all be keeping track of these things and providing oversight into not only what our schools are spending money on, but how they are spending money.  When I hear a Board President state transferring over a quarter of a million dollars out of an account earmarked for only certain things related to special education as a “legal maneuver”, that concerns me.

“All the numbers are there and they’re all justified, its just that you have to know what you’re looking for,” said Forsten.

Are they Mr. Forsten?  I beg to differ…

But the biggest concern I have is the extreme lack of oversight from the Delaware Department of Education in these matters.  When it comes to special education funding, especially tuition tax expenditures, they should be looking into these matters.  It isn’t a question of “may”, it is a question of “shall” according to Section 352 of HS1 for House Bill 225, the budget bill for FY2016.  While this mostly concerns out-of-district placements, the last line says it all…

I’m fairly certain that special education lawsuits should NOT be covered in tuition tax payments.  Nor should Indirect Costs going out of this fund.  And tax warrants should be based on a specific amount based on the prior year spending, not the highest of three amounts (and most likely the most inaccurate amount).  I look forward to their response to this article.  Will I get an email, a phone call, or another special section of their board meeting?  Or none of the above?

Appoquinimink & The Sleight Of Hand Board Meeting Shows No Transparency Or Explanations

Appoquinimink finally released the documents from their board meeting on July 12th yesterday… six days later.  This morning they also put up the board audio recording from the same board meeting.  We got a bit of insight into their “special education costs” tax warrant “increase”.  And they clearly spell out how much of the money is going towards out-of-district placements and what is staying in-district.  We also find out something the money is going towards for those in-district costs.  Once again, the district is as quiet as a church mouse in a response to me.  I guess they don’t feel answering questions in the state where “sunshine is the best policy” is important.

Now we know the Middletown/Odessa area is growing.  I don’t think anyone is questioning that.  But they aren’t using this tax warrant increase of 7.76 cents per resident for increased special education costs.  They are using it to increase salaries as part of the FY2017 Delaware budget.  Which is provided by the state and local funds.  As well, they are also using it to increase benefits and pensions.  Keep in mind that in FY2016, their amount for needs-based instruction was $6,500,000.  Now we are expected to believe it has jumped to $7,860,000?  Without a final student enrollment count which won’t come until after September 30th?  I know, budgeting is predictive in nature.  But in my mind, they still haven’t justified the original $6,500,000 number.  They can say what it is for, but until I see a breakdown of exactly what these collected tax dollars in the form of tuition tax is going towards, I’m not satisfied.  Of particular interest is the fact that their out-of-district placement costs actually went down between FY2016 and FY2017, even though this was a major thorn in the side for the Appo board just five months ago.  I have to wonder who is calling the shots here and who knows about what.  I want to believe the board isn’t aware of what is going on.  Which is an issue in itself.  But clearly Dr. Charles Longfellow would have some insight into this but thus far has not provided ANY information.  Nothing.  I suppose we are just supposed to take this at face value without any logical explanation whatsoever.  How much does Superintendent Matt Burrows know about this?

The entire operating budget is going up over $11 million dollars.  That is a lot of coin.  That is also a 10% increase over last year.  Did the district receive an additional 10% amount of students?  They had 10, 378 in FY2016, 9,877 in FY2015, and 9,750 in FY2014 based on their September 30th enrollment counts for the past three years.  But we are expected to believe this is about the students…

Now things like a carryover budget don’t really concern me.  It is normal to have that.  If everything wound up exact I would be very alarmed.  That is to be expected.

To see the full presentation, budget, and the budget amendment to increase the FY2016 budget (done based on May 2016 numbers in the budget…very troubling in my opinion), see the below documents.  Of particular concern to me is the budget amendment request.  This is where it all gets very shady.  On the original pdf, if you do the right-click thing for this document and go to properties, it shows the document was created on 6/29/16.  But if the Appo Board of Education didn’t approve it until 7/12/16 how can their CFO write a letter like this before the board even voted on it?

After you read those, come back to see what the district wants to get in one of their schools.  Keep in mind, they seem to want this more than adding programs to take care of the complex special needs students that live in the district but have to go out-of-district to get the special education services they are rightfully and legally entitled to.

FY2017 Preliminary Budget Presentation

View this document on Scribd

Actual FY2017 Preliminary Budget

View this document on Scribd

FY2016 Budget Amendment Request

View this document on Scribd

While all this is going on, the district really wants a pool.  Not just any pool, but a “shark tank”.  An actual, indoor pool.  While I don’t have an issue with any school having an indoor pool, I would think it wouldn’t be a priority until ALL students living in the district get what they need to succeed.  Especially the very students the district doesn’t serve: complex special education students.  Granted, this is just in the, pardon the pun, ground stages.  But how about an RFP for something similar to the Delaware Autism Program or something like that?  Nope, they really want a pool!

RFP for Nanotorium

View this document on Scribd

In listening to the board audio recording from the July 12th board meeting, we once again hear there was not a quorum of their Financial Advisory Committee present at their last meeting, but the board once again approves their monthly financial report.  Who is on this committee?  Even more concerning is this comment from CFO Dr. Charles Longfellow:

I never budget for assessment growth.

So if we know the entire region of Delaware is growing rapidly, and their CFO doesn’t take this into account in any way, and the board is approving tax warrants based on this, what happens when the district experiences a surplus every year based on this growing population?  If the CFO is going to set firm guidelines with his budget like that, why does he overestimate on charter school payouts?  (This is the amount the district has to send to charter schools when a local student choices out to a charter school).  We did find out that in this district, for every $1.00 they spend in salaries, spends an addition 31 cents to cover Other Employment Costs which covers benefits and pensions.  The trailers the school is putting at select schools due to running out of room are all coming out of local funds.  This was correctly referred to as “portable classrooms” by a board member and Longfellow.  I found it very interesting that Longfellow stated the board couldn’t approve the budget if they didn’t approve the tax warrant for the tuition costs.  He did state that was later on in the board agenda, but the two went together.  The board is going out for a referendum in December.  There was obvious concern from one board member about pushing these tax warrants now prior to a referendum.  When asked what each revenue base goes towards, Longfellow said Tuition Tax pays for out-of-district placements and programs for students with disabilities.  When asked by a board member if it was accurate to say the increase in tuition tax was based on the district receiving more students with intensive and complex special needs, Longfellow said that was accurate.  Giving kudos where they are due, one board member did explain that assessed value and real value of homes are two different animals.  He explained the assessed value formula hasn’t changed since 1983.  Longfellow explained that the state gives local boards the “right” to increase tuition taxes to make sure students get what they need but it isn’t a “fun right to have”.  At no point did the board ask for a breakdown of how this amount increased at such a dramatic rate.  There was absolutely nothing put forth in the preliminary budget or the tax warrant request to the board.  Just numbers without any justification whatsoever.  The board voted unanimously on the tax warrant first and then the preliminary budget.

Later on in the meeting, the board approved an increase for all administrators and specialists of an additional $500 above the state increase of 1.5% or $750, whichever is greater.  So at a minimum, specialists will be getting a $1,250 raise for the year.  Note the board approved this increase after the preliminary budget was approved, not before.  A very careful sleight of hand on Longfellow’s part…

Once again, I implore the New Castle County Council to ask for a full breakdown of these costs before deciding on the tax warrant.  If the district fails to give that requested information, I would highly recommend not approving their tax warrant.

In adhering to the district’s policy on Fair Use:

Fair Use

Unless otherwise noted, users who wish to download and/or reproduce text and image files from this website for non-commercial educational purposes may do so without the Appoquinimink School District’s express permission, provided that they comply with the following conditions:

1. The content may only be used for noncommercial educational purposes;
2. Users must cite the district, school, author and source of the content as they would material from any printed work;
3. The citation must include all copyright information and other information associated with the content and the URL for the ASD website;
4. None of the content may be altered or modified; and
5. Users must comply with all other terms or restrictions which may be applicable to the individual file, image, or text.

All graphics, links, and pdfs in this article, as well as the ones about the Appoquinimink School District I posted on 7/14/16 and 7/17/16 are used for noncommercial educational purposes.  I hereby cite the district for ownership of all applicable material in all three articles.  No document was modified or altered.  The district did not notify me of anything associated with this but I felt it was prudent to inform my readers of this. All material can be found at http://apposchooldistrict.com/

This district and board can keep ignoring me but I will not cease publishing my findings and their extreme lack of transparency in regards to this and any other issues I find with them.  As such, I submitted a Freedom of Information Act request to Superintendent Matt Burrows and his office to obtain a full breakdown for each dollar spent on their tuition costs and where and to whom those costs are associated.  I also included, in the request, any documents presented to the Appoquinimink Board of Education for their July 12th board meeting in regards to the tuition tax increase of $815,000 and their approval of a tax warrant.

Updated: Red Clay’s Tax Rate Jumps Up 2 Cents Without A Referendum!

Man, taxpayers are getting it this year.  Like Appoquinimink, Red Clay citizens are going to get another hit this year as their tax rate leaps up 2 cents to $2.174 per $100 of assessed value.  But if you look at the below pictures, it shows a bigger increase.  That is because their last referendum had different amounts that would change in the tax rate for the next couple years.  But unlike Appo, there tuition tax leapt up .02 cents as opposed to .06 cents.  Red Clay has a ton more students with disabilities, and yet their needs-based special education funding only went up $250,000 as opposed to Appo’s needed $815,000 for “increased special education cost”.  So Appo still  has some explaining to do (I am working on a follow-up article to explain this anomaly).

Click on the blue to see Red Clay’s current tax rate presentation and FY2017 Preliminary Budget.