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DOCUMENTS


The Tentacle


July 2, 2009

Non-Answers and Squirrelly Financing

Farrell Keough

The Frederick County Board of Education had a televised meeting on June 10, 2009. During that meeting, many things were discussed including re-districting and the budget. It is the latter for which we will focus our discussion today.

 

School board member Donna Crook was very impressive when she queried Hal Keller, executive director of Fiscal Services on the $2 million transfer and the lease payments for the new central office building –referred to as the Taj Mahal. You may be saying to yourself, what $2 million transfer?

 

For those who were not aware, during this year of extremely tight budgets, our Board of Education admitted they were financing the Taj Mahal with “operating” money – not capital funds. In other words, money that is supposed to go to teaching our children is being used to build this grandiose office.1 Since that time, the school board has voted to transfer $2 million into a special account, (overseen by the leasing agency) to pay forward toward this building. This transfer pretty well ensures this project will happen.

 

But, think for a moment what took place. When virtually every other state and local agency had to make cuts, our school board not only continued with their existing increases, but actually transferred a huge sum of money into a special account – unavailable to any use for our children, but rather only to ensure their Taj Mahal will be built.

 

Now enter the conversation with Ms. Crook. She asked Mr. Keller multiple times if this transfer would be displayed in future years. Each time she asked, Mr. Keller repeated that the transfer itself would be portrayed in the 2009-2010 budgets and not in future years. Ms. Crook wanted to ensure that transparency of the budget process was taking place and that this huge sum of money could be tracked from year to year – obviously, it cannot.

 

After Mr. Keller answered Ms. Crook’s question numerous times, Linda Burgee, superintendent Frederick County Public Schools (FCPS) interjected that the money would be shown in the 2010-2011, 2011-2012, etc., budgets. In short, she completely contradicted Mr. Keller’s answers. This was a stunning occurrence.

 

Wanting to make sure what was seen was what actually occurred, an email was sent to verify. That email, in turn, was forwarded to Ms. Burgee for a response. In short, Ms. Burgee stated “you may have misunderstood how the lease reserve funds would work.” She noted that lease payments would be made in the years 2011, 2012, 2013, and 2014. She attached a worksheet as follows.

 

 

Annual Operating                          FY                                                                                            4 Year

Budget Line Items                       2010          FY 2001      FY 2012      FY 2013      FY 2014         Totals

---------------------------------------------------------------------------------------------------------------------------------------

      Revenues

Budgeted Fund

Balance by Reducing

Lease Payment Reserve              $ 0        $ 500,000    $ 500,000    $ 500,000    $ 500,000    $ 2,000,000

---------------------------------------------------------------------------------------------------------

  Appropriations 

Required Lease

Payments                                     $ 0    $ 1,178,478   $ 1,178,482   $ 1,178,492   $ 1,178,502  $ 4,713,956

---------------------------------------------------------------------------------------------------------

  Appropriations 

Net Lease Payment Amount

That Needs To Be Funded          $ 0       $ 678,478      $ 678,482     $ 678,492     $ 678,504    $ 2,713,956

---------------------------------------------------------------------------------------------------------

Budgeted Lease Payment**        $ 0       $ 678,478  

---------------------------------------------------------------------------------------------------------

Cost Savings With 1 Building      $ 0       ( $ 178,478)  

---------------------------------------------------------------------------------------------------------

New Funds That Need

To Be Budgeted                          $ 0        $ 500,000  

 

Two rather interesting things should be noted:

 

 

As is the common practice with this group, it feigns ignorance on the part of the questioner and provides a non-answer under the guise of educating. It is common for business to transfer a payment amount into a separate account and pay down a debt, showing those payments in each successive year. But, our school system is not a private business, nor is the question of tracking this money included in this non-answer.

 

The constant refrain of accountability and transparency is yet again stifled when a desire, not a need, requires expurgation. After this year’s budget, the transfer of an astounding $2 million by the school board to ensure their Taj Mahal gets built will no longer be transparent, but rather, hidden in the non-line item budget this group is able to present, year after year.

 

Simplistic spreadsheets, while easy to put together, do not replace honest dialogue. Our money and our children are under the purview of these bodies. We should expect no less than a complete picture of expenditures and the ability to track costs. Platitudes and the assumption of an ignorant public will no longer be an acceptable practice. We have seen through the school system’s questionable acts and now they must be held accountable.

 

fkeough@hotmail.com

 

1 This information was revealed after a set of Letters to the Editor in the Frederick News Post garnered a response from Board of Education President and Vice President Ms. Smith and Ms. Borsa.

Transparency needed on new BoE building — Part 1

Transparency needed on new BoE building — Part II

Part 1: Clarification of BoE central office project

Part 2: Financing the BoE central office

 



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