The Transylvania Times -

School Board, County Spar Over Capital Spending

 

June 18, 2018



In her recommended budget for the 2019 fiscal year, County Manager Jaime Laughter said all future school system capital projects at $50,000 or more will require school officials to submit draft contracts or purchase orders and then the county would issue a check.

This change in the funding process for certain school capital projects has upset school board members, saying it undercuts their authority, while county officials deny this, saying it just provides a “paper trail” and more “transparency.”

In the public hearing during the Board of Commissioners’ June 12 meeting on the proposed $51.2 million county budget for the 2019 fiscal year, school board members aired their frustrations.

After the meeting, Laughter was contacted for clarification on the new process (see side bar on page 12A).

During the public hearing, school board member Alice Wellborn talked about the lack of input, she believes, she and other board members have on local school funding and the county’s proposed budget, in general.

She said that despite requesting it, school board members were denied the opportunity to see the proposed education funding in the 2019 budget before it was introduced.

“We have a situation in which the county commissioners plan to take control of the school board’s capital spending over $50,000 without any discussion or input from the school board, the superintendent or (the school system’s) finance director,” she said.

Wellborn said that in the two weeks between meetings on May 8 and May 21 the commissioners and Laughter developed a proposal that represents a “significant change in the way the school board and commissioners do business.”

She said there are many questions about the change, such as what are the long-term and unintended consequences and the ultimate goals.

Wellborn said she can’t “believe” these questions were “adequately and thoroughly explored.”

She said she was also concerned about how the capital restrictions would impact the proposed school bond projects.

She asked whether commissioners and the county manager plan to take “control” of those school bond projects.

In November, voters will decide whether to approve a $68 million bond for school improvements.

Wellborn asked commissioners to step back this year, so an “open, collaborative discussion” between the two boards can be had on the new $50,000 capital projects process.

Wellborn said the school board was elected to oversee the school system and would appreciate having its voice heard in the “decision process.”

School board member Ron Kiviniemi said he’s been involved in public education since 1974.

Since then, he said, he’s noticed a “disintegration in the relationships between county commissioners and local boards of education.”

He said a lot of it has been caused by things “beyond our control.”

He said the state has a “convoluted system,” giving school boards all the responsibility for the schools but no revenue-generating authority, which creates “tension.”

He said the failure of the N.C. General Assembly, historically, regardless of the administration, to adequately fund the operations of schools, which is the state lawmakers’ Constitutional duty, adds to the tension.

He said actions by commissioners to treat school boards as “just another county department” is also a significant issue.

The $50,000 capital project proposal, without any notification or any input from the school board, is an “example of this trend,” he said.

Kiviniemi sent an email on May 30 to all commissioners with concerns and received feedback from two commissioners.

In the email, Kiviniemi said he feared the new process “jeopardizes in the gains made in improving the relationship” between the boards.

Like Wellborn, he asked commissioners to drop the proposal for a year, so both boards could discuss it further.

He said he “feared” that the commissioners want to control projects once the bond is approved in November, since the proposal appeared only a few weeks after the school board declined Laughter’s suggestion that a contract with the architectural firm — chosen by the school board for advanced planning on the bond project — be between the firm and commissioners rather than the firm and school board.

That would give commissioners “almost total control” over bond projects, if such a contract were to be required for the building program, he said.

“I sincerely hope that is not your intent,” Kiviniemi said.

In her email response, Laughter also addressed Kiviniemi’s comments about the architectural firm contract.

She said that she did not request such action but was directed by commissioners during a public meeting to work with the school system to “negotiate the full architect’s fee for the school bond projects instead of approving funds for architect work in pieces, so that future services would not end up being an unreasonable sum.”

“This was all a part of meetings, where the commissioners had the Board of Education and staff presenting on capital needs in February of this year,” she said in the email. “I reported in a commissioner meeting that I was notified by school staff they did not want to engage the county in the architect’s contract or negotiate the full fee.”

During the budget hearing, school board member Betty Scruggs McGaha chimed in that she was “disappointed” in the capital requirement being proposed.

She said she understood previous commissioner comments about why a project is listed one year and then listed the next. McGaha remembers when she was a school principal having projects funded one year and then delayed because “some-thing of greater need came up.”

She also was troubled that no school board or school official was asked to meet with county officials prior to the new capital policy.

She said commissioners often say they want to hear from citizens.

She said when commissioners discuss budget issues with school board members they are “sitting down with thousands of Transylvania County citizens.”

She asked commissioners to reconsider or delay this “historical procedural change.”

She said implementing this change could appear to county citizens and voters as the county’s “disregard” in “their confidence in us as the Board of Education.”

“It could appear to the community as a lack of respect or trust for the Board of Education, not only presently but into the future,” McGaha said.

Resident Lee McMinn noted the school board requested $5.2 million in the 2019 budget from the county for capital spending.

Laughter’s budget recommended approving $1.85 million, a 2.78 percent increase over the current year.

McMinn said that the capital funding approved over the years has been “significantly below the level where it needs to be.”

He said this “underfunding” led to the findings of a 2015 study of the school system’s facilities that said $118 million in renovations and rebuilding was needed.

He said he “looked forward” to the commissioners’ full support of the school bond.

He said the $68 million bond and the other “$50 million in deficiencies” would bring the county up to “parity.”

Commissioner Comments

After the public hearing at the end of the June 12 meeting, Commissioner Jason Chappell said he’d like to discuss the $50,000 capital limit at the next meeting on June 25.

Commission Chairman Larry Chapman said the capital projects, which would meet the $50,000 threshold, are already “approved.”

“The only thing we are doing is we are ensuring that the work gets done,” he said. “We are not telling them that we are not going to approve it once they are getting ready to move down the road.”

There is a “misconception that we are micro-managing the school board,” Chapman said.

“This came about because there’s been a number of items over the years that keep showing up as priorities year after year,” he said. “And we understand the priorities will change, and that is fine. We just need to know about why that work did or did not get done. It’s a very small percentage of the budget. We are not micro-managing, but I will make the statement that, according to North Carolina general statutes, if we wanted to micro-manage a $500 expenditure, we (can) legally do that because (the Board of Commissioners) is legally responsible for all the capital expenditures in Transylvania County Schools.”

In an email, Laughter said state statutes allow commissioners to “allocate by project, so that they know what they are funding and can be accountable. If commissioners provide funding but do not have clarity on what the funds are doing, then they cannot say for sure whether or not funding is adequate.”

Statutes require school systems to submit budget requests by May 15 and for county managers to submit their budgets to commissioners no later than June 1.

Commissioners are required to notify the school board about the level of approved funding by June 30.

There is no reference in statutes about school boards receiving a county manager’s recommended budget prior to commissioners and the public.

In an email, Laughter said that she communicated “numerous times with questions and requests for clarification with school staff regarding their request in order to formulate (her) recommended budget while also weighing other factors like revenue growth and other county re-sponsibilities. There was no lack of communication throughout the budget process.”

Commissioner Page Lemel said commissioners have asked the school board to meet every other month to discuss capital needs and the bond referendum through March of next year to get ready for the 2020 budget.

The proposed joint meetings would be open to the public and be held in July, September, November, January and March.

Commissioners Mike Hawkins said he agreed with Chapman. Hawkins said a better word to describe the new capital process is “notification” rather than “approval.” He said it is “intended” for both boards’ benefit to “tie” projects to specific funding streams.

The school board, he said, pointed out correctly “things happen and circumstances change.”

The difficulty, Hawkins said, has been when the county has asked questions about funding projects, where they were completed or not, and where did the funding go.

Another public hearing on the budget will be held during commissioners’ next regular meeting on June 25, when commissioners are also expected to approve the budget.

 
 

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