CIP funding reveals difficulty in elected official dynamics

By Christina Dimeo, editor

A detailed discussion over a seemingly mundane issue – whether technology money should go into the school budget or the capital improvements plan (CIP) – revealed issues between the Fluvanna County Board of Supervisors and School Board.

The respectful conversation between the boards Wednesday afternoon (Feb. 20) plainly demonstrated the unavoidable struggle when one elected board holds the purse strings of another.

The schools are asking the Board of Supervisors to up their funding by almost $1 million, for a total of $18.4 million. With the uptick of one penny on the real estate tax rate bringing in about $309,000, this request represents a 3.2-cent tax increase for Fluvanna residents before any other budget considerations come into play.

In Fluvanna, the Board of Supervisors doesn’t have control over how the School Board spends its money. Supervisors allocate dollars, and then the School Board takes over.

Supervisors may hear a heartfelt plea for better technology in the schools and decide to raise their citizens’ tax rate to supply that need – only to discover that once the money was in School Board hands, it went elsewhere.

On the other hand, the schools rarely, if ever, receive all the money they ask for, and must make needed adjustments when budget realities force them to choose between, for example, technology and a pay raise for teachers.

This dynamic can lead to frustration between the boards.

On Wednesday afternoon, these feelings spilled into a conversation over how money should be allocated.

Capital improvements plan

There is an exception to the rule that the Board of Supervisors can’t earmark school money for particular purposes. It’s called the CIP.

When money comes to the schools through the CIP, the schools must spend the dollars accordingly.

The very name of the capital improvements plan indicates that the projects belonging to it should be substantial, one-time investments. The CIP contains line items like new ambulances and buses, or roof replacements and building renovations. It also contains improvements such as community pools and spray parks, though these are perpetually pushed into later years and never, as of yet, enacted.

School technology money sits in the CIP as well, and on Wednesday, both boards zeroed in on that line item with laser focus.

Some school technology items are big-ticket one-time investments that meet the requirements for inclusion in the CIP. Supervisor Tony O’Brien referred to a potential $250,000 server upgrade as such an expense. But Eric Dahl, county finance director, pointed out that recurring costs don’t qualify.

“We want to see bonafide big-rock technology,” he said. “We don’t want to see you buying keyboards and things coming through the CIP.”

Supervisor Trish Eager said the Planning Commission has been concerned with expenses tucked into the CIP that don’t actually qualify for such placement.

Does it actually matter – to anyone except the accountants, that is – whether these dollars go into the CIP or the regular budget?

Per-pupil expenditure

Per-pupil expenditure is roughly calculated by dividing the school budget by the number of students in the district. Fluvanna’s per-pupil expenditure in fiscal year 2017 (FY17) was $10,557. That puts it fourth-lowest in the area, ahead of Culpeper, Orange and Greene. Buckingham, Louisa, Goochland, Madison, Albemarle, Nelson, Charlottesville, and the state average come in higher.

Any money allocated to the schools in the CIP does not factor into per-pupil expenditure, which measures dollars spent on day-to-day education and not, for example, the cost of the buses that drive children to school.

Both boards acknowledged this reality Wednesday, but neither voiced opinions on whether CIP technology money should be moved into the regular budget for the purpose of boosting Fluvanna’s per-pupil expenditure.

School Board member Andrew Pullen said per-pupil expenditure isn’t a good way to judge school performance. “It’s not the big picture,” he said.

Brenda Gilliam, the schools’ executive director for instruction and finance, said that a lower per-pupil expenditure amount shows sacrifices are being made. “I’m not saying that we’re not providing a quality basic education to every kid,” she said. “But there are things that you give up as a community when you have a lower per-pupil expenditure. That’s just the facts.”

Baseline funding

Once the county gives money to the school system, the assumption is that the following year the schools will receive at least the same amount of money. One year’s funding level becomes the next year’s “baseline funding,” and the schools typically ask for more on top of that.

This is why school funding requests are usually spoken about in terms of additional dollars sought. While the schools’ FY20 request is for $18.4 million, both boards will mostly focus on the almost $1 million figure, as that is the amount of new money sought.

If school technology dollars are allocated in the regular budget, they become part of the baseline funding for the following year.

Money allocated in the budget for a Chromebook replacement cycle would therefore reappear the following year, said O’Brien. The schools would not then need to request additional money for the expense. But whether this actually happens is confusing, he said.

“That’s the problem… Here’s where this issue is about… Is it earmarked? Is it going to be used for that? Does it actually happen?” O’Brien said. “That’s an example of where we [supervisors] struggle with these numbers.”

A bigger expense, such as the $250,000 server upgrade, should be dealt with through the CIP, both because it is a one-time significant expense and so that it does not inflate the baseline, O’Brien said.

“It makes sense, then, to revisit what the rules are and what the expectations are, because I can tell you in my short time in this role, that’s been a little confusing,” said Gilliam.

Saving $50,000 per year for five years within the regular budget would not work, both boards agreed, because the schools don’t have a savings account. Unused money is returned to the county at the end of the year.

“That’s why it needs to be in the CIP,” said County Administrator Steve Nichols.

Differing perspectives

Issues of control between the two boards understandably exist. Neither is trying to dictate to the other, but their missions – to best serve their respective constituents – can conflict at budget time.

Supervisors want to know that when they raise taxes specifically to meet a need within the school system, the money will be spent for that purpose, and the need will not reappear the following year as a pressing, unaddressed issue requiring more spending.

But when the School Board receives less money than needed to fulfill its budget plan, members must modify that plan to prioritize the greatest needs, and resist what can be seen as a reach into their autonomy to spend the money as they think best.

If the schools don’t allocate budget money to technology, O’Brien said he would rather see the dollars in the CIP.

“There was a fear a few years ago that – excuse me for characterizing it this way – ‘Oh, woe is me, we’ve got no money to spend on technology,’” Nichols said. “The Board [of Supervisors] wanted to guarantee that there was money spent on technology, and you guys [the School Board] wanted to spend money on technology, so there was a wedge put in the CIP because it was guaranteed. You had to spend it on that because you can’t spend it on anything else.”

Nichols said the issue is complicated. “I don’t know how to solve that,” he said. “It’s just a trust issue between the two boards.”

“When’s the last time this Board [of Supervisors]…feels that we got an actual increase in our budget – our baseline budget – that was specifically an increase aimed at technology?” asked Superintendent Chuck Winkler.

Supervisor Chair Mike Sheridan and Nichols denied that supervisors ever gave a marked increase for anything. “We give you an amount of money and you spend it as you deem appropriate,” said Sheridan, who is also a Fluvanna schoolteacher.

Winkler rephrased. “When’s the last time this board gave us whatever increase it was that you thought any portion of that increase was going directly toward technology?”

“Every single year,” said Nichols. At the same moment Sheridan said, “Last year.”

Winkler was clearly surprised.

Sheridan said that he has seen new technology in the schools.

“We got it through CIP,” said Winkler.

Nichols disagreed. Out of last year’s budget, he said, “you spent…some of that…on technology… Therefore there is a sunk base.”

Conversation shifted before the disagreement was resolved.

Trust affirmed

“This discussion that’s going on every year, about where these things should be, needs to be figured out,” said Nichols.

School Board Chair Perrie Johnson, who along with Pullen were the two School Board members in attendance, spoke passionately on behalf of her board.

“We don’t just ask for add, add, add. We do go back and look at how our priorities have changed and how we can change with them,” she said. “This is the first time I remember that we took a long list of potential cuts [and] reallocations, put them up on the wall and went through them, with people sitting right there that it affected. It was uncomfortable but important, and we did it and we did it again, and we costed it out, we narrowed it down, and this [budget request] is the result of that.”

“I wish, rather than feeling penalized for the transparency of looking at costs and what we can change, you will, rather than penalize us, trust us that we want the same thing you want,” she said.

Supervisors appeared concerned. “How do you feel penalized?” O’Brien asked.

“Just that when we put something up there, we’re letting you know what we’re considering living without,” Johnson said. “That’s how it could be a potential penalty.”

Winkler said that “naysayers” see those potential cuts and seize on them as unnecessary expenses.

Supervisors and county staff seemed sobered, and assured the school personnel that recent transparency has been welcome.

“The budget before was mystery and mumbo jumbo,” Nichols said to Winkler. “Quite frankly, your predecessor [former Superintendent Gena Keller] and your board are laying it out to the community because it’s the community’s taxpayer dollars. I think it’s fantastic.”

“It’s a really good dialogue,” he continued. “It doesn’t mean you’re going to get every penny you ask for this year…because [supervisors] are going to have to make lots of decisions that might be hard, but it’s not because they’re penalizing [you], it’s just because…we have to sometimes make hard decisions, and sometimes that means…we just can’t do this one this year.”

Sheridan said that supervisors have increased the school budget by over $4 million in recent years. “We’ve had a lot of faith in the school system in the last five years,” he said. “We’re trying to work with y’all and do everything we can.”


Schools request almost $1 million more in FY20

The schools have requested $991,319 in additional dollars from the county for FY20, for a total of $18.4 million.

Staff raises – a minimum of 3 percent – and step increases account for $890,000 of the request.

There are staffing concerns at the high school, said Superintendent Chuck Winkler. High school enrollment is projected to increase to 1,510 next year – an increase of 41 students from this year, which itself saw an increase of 38 students from last year.

Positions needed include a high school English teacher, a high school physical education and health teacher, a high school elective teacher, a high school special education teacher, a school counselor, and a middle school career and technical education teacher. The schools have requested $370,000 for these positions.

Technology needs, such as Chromebooks, teacher laptops, and a copier lease renewal, account for $600,000 of the request. “All of our servers in the tech building will be…antiquated in March of next year,” Winkler said. “We need to plan on that, and we won’t have the support from the company” due to the age of the servers.

Other needs make up $60,000 of the request. The schools want to increase substitute pay, add field hockey, and hire a new homebound teacher.

“We haven’t increased sub pay since I’ve been here, in eight years,” said Winkler. Substitute teachers with a college degree currently earn $75.50 per day, he said. Substitutes without a college degree earn less. He wants to raise their pay by $5.

Starting a field hockey team would require a one-time $20,000 investment. “Just about every VHSL school around here has field hockey for girls,” he said.

These budget requests do not add up to the nearly $1 million total in requested new money due to several factors, the most significant of which is expected additional state funding.

Supervisors are scheduled to finalize the budget and tax rates April 17. Public hearings take place April 10.

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