News: School Board Chairman Stevens Announces Public Hearings on Reconciliation of Budget

(Apr. 6, 2010) - Loudoun County School Board Budget Reconciliation Public Hearings will be held on Thursday, April 8 and Monday, April 12. Each meeting will begin at 6:30 p.m. and will be held at the School Administration Building, 21000 Education Court, Ashburn.

The Public Hearings will begin with one-on-one public discussions with School Board Members and will be followed by a formal Public Hearing. Reconciliation actions by the School Board are scheduled on the agenda for the Tuesday, April 13 School Board Meeting.

From the school board chair, John Stevens, on his blog: "Public hearings are notoriously frustrating experiences. They go on forever as each person speaks one at a time. Board members sit stone faced, unable to respond. Speakers repeat themselves ad nauseum because they can't know if we "get it." We cannot ask a follow-up question, express support for their point of view, or disabuse them of a poorly informed notion.

So on Thursday April 8th we will try something more interactive. For the first hour of the public hearing, from 6:30-7:30, we will come down from the dais and dialogue with the people who have come to talk us. Each board member can sit in a different corner of the conference room, or in different rooms on the first floor. Board members may sit in pairs but must not sit in groups of three or more.

This is an opportunity to hear from multiple speakers simultaneously, an opportunity for two-way communication, an opportunity for people who aren’t comfortable speaking on microphone to the whole room, an opportunity for questions and answers that public hearings don't typically allow. The public hearing at the podium will follow but I suspect that many people, having already been heard on a more individual level, will pass. I hope that this will lead to a shorter and more productive public hearing."

Why the cuts? We have been presenting views on both sides and even though that the supervisors have voted, here is a look at how four of the supervisors weighed in on the school budget from emails to constituents:


Scott K. York, Chairman, Board of Supervisors

In the last several weeks I have received over 3000 emails addressing the budget. They have come from every direction – those that support the cuts we made for schools and those that do not. I have always prided myself with the personal touch that I try and answer letters with, but this volume has been overwhelming, and I feel it is important to reach out to all of you prior to the Board of Supervisors casting their final vote on the budget, next Tuesday. So I ask for patience as I send out this mass e-mail to address the multitude of messages that have been sent to me in the form of questions, statements and accusations.

Many of you have written about your displeasure with the fact that your taxes are going to go up. I feel the BOS worked hard at trying to come up with a reasonable budget that provided the community with a quality school system and a strong public safety system. The rate will not be $1.40 as advertized. If things stand as a result of the budget work sessions the tax rate will be a $1.295.

In addition to those letters, there was a multitude of letters written in support of the schools that expressed concern for the cuts we made to the School Board’s proposed budget. Unfortunately there has been a lot said regarding the proposed school budget cuts that are simple not correct! The following 6 points are the key reasons as to why the Board of Supervisors took the action it did to reduce the local transfer to the Schools.

1. Funding from the State, which includes the increase due to the adjustment in the Local Composite Index (“LCI”), is sent by the State to the County Treasurer’s Office where it is recorded directly into School accounts for the Loudoun County Public Schools. LCPS will receive $21 million in increased State funding due to the LCI change. This funding will not pass through the County (side) finance systems.

2. In the FY 11 School Board Budget, the amount identified for payment to the Virginia Retirement System (”VRS”) by LCPS is $29 million higher than the actual bill that will be received by LCPS for FY 11. Therefore, it is reasonable for the Board to reduce the LCPS Local Tax Funded (“LTF”) Transfer by this amount since the bill from the State for VRS has been reduced by $29 million.

3. Throughout this process, LCPS has maintained that for operating purposes, the BOS may reduce the LTF Transfer by an amount equal to the increase in the LCI ($21 million) plus the amount equal to the decrease in spending for the VRS payment ($29 million) for a total reduction in LTF transfer of $50 million ($21 million + $29 million) without impacting classroom instruction beyond the Adopted FY 11 School Board Budget.

4. The current FY 10 LTF transfer is $502 million. In the Adopted FY 11 School Board Budget, the requested LTF Transfer is $527 million. This request included $5.5 million for a 1% pay increase and was made prior to any changes by the State in funding or required payments. LCPS stated that the BOS should feel comfortable in reducing the LTF Transfer by amounts equivalent to any increases in State funding or decreases in State required payments. LCPS further stated that the LTF Transfer could be reduced by the $5.5 million for the proposed pay increase and by $657,000 for the Triennial Census ( this requirement was waived by the State this year) without affecting classroom instruction.

5. This means that the adjusted LTF Transfer requested by LCPS for FY 11, once the State changes are made, is $476 million ($527 million - $21 million - $29 million - $657,000 = $476 million). If further reduced by $5.5 million, the LTF Transfer would be $471 million. According to LCPS, at a LTF Transfer of $471 million, the schools are fully funded, with the exception of the proposed pay increase for FY 11. This leaves roughly $19 million that is in discussion.

6. The Board of Supervisors has directed staff to prepare an Appropriations Resolution that provides a LTF Transfer of $452 million, which includes approximately $5.1 million of the requested $25 million increase for the Loudoun Public Schools. In effect, in terms of dollars only, the Board has increased the LCPS LTF Transfer by 1% instead of the requested 5% year to year.

In simple terms, the LCI money never comes to us – it is deposited directly with the schools. John Stevens, President of the School Board, told us in a presentation to the Board on February 17th, that a re-indexing by the State “would more than cover our request for local tax transfer this year.” Speaking on behalf of the School Board, Chairman Stevens then made the following promise: “We have committed that if the State funding numbers rise, we will not request a greater increase in school funding from those funds. We would ask that you take those and use them to fund the other County needs and to reduce the burden on the Loudoun County taxpayers.” These are the facts that we have based our decisions on.

FROM: Sally Kurtz, Catoctin District, Board of Supervisors

Colleagues,

I would like to acknowledge that there was an initial misunderstanding on my part about the Loudoun County Public Schools (LCPS) carryover fund. Dr. Hatrick has explained to my satisfaction that the $20 million dollars had been programmed into the proposed FY11 LCPS budget as part of the LCPS FY11 base budget.

I read with dismay in the local newspapers that the School Board has considered reconciling the $25.4 million FY11 allocation reduction proposed by our Board of Supervisors by using the program and personnel Option 1 reductions in the Superintendent’s proposed budget.

In the spirit of clarity I offer the following reasons for my support for the FY11 $25.4 reduction to the LCPS proposed budget:

In June 2008, MGT of America Inc., conducted an Efficiency Review of Loudoun County Public Schools. Included in the report, was a review of LCPS’s Transportation Services, where Prince William County Schools and Chesterfield County Schools were identified as peer divisions. Each of these school districts run their transportation services budget at approximately 5% of their total Operating Expenditures, while over the last few years LCPS has run its costs at between 7.1 and 7.3%. The difference between 5% and 7.1% for LCPS is savings for FY11 of $16.3 million dollars.

I also think savings can be realized by forgoing the IT schedule of upgrades and replacements described on page 75 of the Superintendent’s budget proposal for FY11. This will result in a savings of $2.5 million dollars. Also, delaying the new hires in the IT Business Office would save $273,000. Further a reduction of just 40% in the proposed Department of Support Services increase from FY10 to FY11 of $7.144 million and 86 new hires (for 2 new high schools and 1 elementary school, considering they are not opening at full capacity) would yield a $2.8 million savings.

The subtotal of my suggested reductions above is approximately $21.87 million, along with the $5.5 million suggested COLA reduction and $658,000 reduction for the triennial census, amounts to a total of $28 million. It is my opinion that these reductions are achievable without touching student programs, existing classroom personnel or closing any schools. In fact the Board of Supervisor’s FY11 reduction was $25.4 million, $2.6 million less than my suggested reductions.

In summary I know that you all, as School Board members, have knowledge of your budget more intimately than I do and are committed to maintaining Loudoun’s excellent public school system through these fiscally challenging years. I think the Loudoun County Board of Supervisors share that commitment with you and it is in that context that I offer my ideas.

Andrea McGimsey, Potomac District Supervisor, Board of Supervisors

Thank you for writing to me and sharing your views on the school budget.

Loudoun County Public Schools ended last year with 38 million dollars in unspent funds. This year’s unspent school funds will total at least 20 million.

We began this year's budget process with a 191 million dollar hole -- a 14% gap -- in Loudoun’s overall budget due to declining property values.

At the advertised $1.40 tax rate, homeowners in the Potomac District would see their tax bills go up as much as $1000 in one year, an 18% increase. Even with the reductions voted on by the Board of Supervisors, Potomac homeowners will see a tax increase of up to 10%.

Given this set of facts, I supported a 2.56% reduction in the school budget, which totals 19.3 million dollars. I also supported a salary freeze for all government employees, and reductions in other local services. I know that firefighters, sheriff deputies, librarians, social workers, and teachers work hard and deserve a raise; I look forward to better economic times and a stabilized real estate market, when we are not facing such massive budget shortfalls.

Many local services such as the library system will see an overall reduction under this budget, and we are reducing the county workforce by over 100 positions. The school system will see an overall effective increase in county funding under the budget decisions by the Board of Supervisors. If there are specific school programs that you would like to see funded, it is important that you send your message to the School Board to help them with their deliberations. The Board of Supervisors only decides the overall amount of local tax dollars transferred to the school (all state funds go directly to the school system) with no control over how the school budget is spent.

Many residents are facing difficult financial situations, due to job loss or working at reduced salaries. I believe the Board of Supervisors has come to a reasonable balance between our ability to provide local services and how much more we are asking residents to pay in local taxes.

Some of you have mentioned that Loudoun has been named the wealthiest county in the country, and I would like to give you some perspective on that fact with regard to our ability to fund local services.

Forbes Magazine recently reported that median household income in Loudoun is the highest in the country. However, the county is not allowed to tax income by state law. Our tax base comes from real property tax (commercial and residential), business property (e.g., a business' computers), and some smaller sources such as license fees. We tried to get a meals tax through to support education, which would have brought in funds from a large percentage of diners who do not live here (tourists, lunches during the day of employees who live elsewhere), as well as those who can afford to eat out. But the meals tax was soundly defeated at the polls.

So for Loudoun citizens who own a home and have lost their jobs or are working at a reduced salary in this difficult economy, we have no way to give them a break. Added to that problem, many mortgages are under water -- they owe more than the house is worth, in some cases hundreds of thousands of dollars -- so selling the house and moving elsewhere or to a smaller place becomes very challenging. We may be the richest county in median household income, but unfortunately it does not help with the local tax situation for those who are hurting this year.

Although we are thankfully off the peak of foreclosures, which occurred in 2008 in Loudoun, there were 1627 foreclosures in 2009. We do not know the number of homeowners who are behind on their mortgages; however, the county assessor gave us the following information earlier this year with regard to 2010:

"Finally, as reported by Forbes, the Washington Post and other sectors of the media, delinquencies, foreclosures, short sales, and REOs (a property that goes back to the mortgage company after an unsuccessful foreclosure auction – bank owned) are likely to put a damper on a recovery in 2010. First American CoreLogic tracks mortgages that are at least 90 days delinquent (includes mortgages in foreclosure or converted to REO.) One in fourteen mortgages meets this standard nationally. The 2009 ratio was one in twenty-two mortgages. Forbes Magazine reported that there are 3.5 million mortgages at least 90 days delinquent and 2 million mortgages are at least 180 days delinquent presently. Unfortunately the increase in delinquent mortgages has not decreased as unemployment levels improved. To compound matters, First American Corelogic reported that there are approximately 11 million borrowers that own homes where their mortgage amount is greater than the property value. Lenders are carrying borrowers through difficult economic times in order to preserve the lender’s portfolio status. The Washington Post recently reported that there are approximately 67,000 properties in the Washington area that could go into foreclosure this year. CitiMortgage is forecasting that there could be a glut of foreclosures in the next 16 to 18 months."

I support and value our local services. We have made decisions this year that I never would have considered in better economic times. I hope this email has helped you understand what I have considered in making these difficult decisions.

Thank you again for writing to me and also for allowing me to explain my thinking on the budget.

Jim Burton, Supervisor, Blue Ridge District

Dear LCPS Parents, Friends, and Employees,

Thank you all for your emails. I have read each and every one. Normally, I would attempt to answer each of you individually, however, given the volume of emails I am receiving on various aspects of the budget and the decreasing amount of time before Tuesday’s Board meeting, I am trying to take advantage of technology to at least provide some acknowledge and response to your emails and comments.

As the husband of a Loudoun County graduate (who attended school with Dr. Hatrick) and the grandfather of a Loudoun Valley graduate with two granddaughters still in school, I am very mindful of the importance of Loudoun County’s public school system. I am also mindful that I can recall the Board of Supervisors fully funding the Superintendent’s funding request exactly once in the last 15 years. Yet, the school system has become, and remains, one of the best in the State. Here are some examples from the Executive Summary in Dr. Hatrick’s budget and the FY 2010 Washington Area Boards of Education Guide:

· In 2009, 93.6% of LCPS high school seniors graduated on time, one of the highest rates in Virginia and 10.4% above the State average.

· Of the seniors who graduated in 2009, 93% plan to pursue further education, the second highest in the Metro DC region(only the City of Falls Church has a higher rate of graduates going on to post-secondary education).

· Less than 1% of Loudoun students drop out of school. In the Metro DC region only the City of Falls Church has a lower drop-out rate. Every other neighboring jurisdiction counted in the WABE Guide has a drop-out rate greater than 1%. A few have rates approaching 3%, despite the larger amounts of money they spend per pupil.

· The SAT Spring 2009 average reading score for LCPS students taking the test was 22 points above the State average and 32 points above the national average;

· The SAT Spring 2009 average math score was 23 points above the State average and 20 points above the national average.

· SAT Spring 2009 average writing score was 27 points above the State average and 32 points above the national average.

Clearly, the school system’s success is not dependent on a fully funded budget – just an appropriately funded budget. In the past few years, the Board has typically presented the school system with 85-95% of its requested local transfer. This year will be much the same. Based on the Board’s straw votes, the Board is presently planning to appropriate somewhere between 95-97% of the School Board’s request. That is awfully close to full funding and comparable to past years’ actions.

While I have personal reasons for ensuring the system’s continued success, I also recognize that there are other positive aspects to a fine school system, including corporate recruitment, residential property values, quality of life, and ensuring the personal and professional success of the next generation. I recognize that a fine system is more than just academics, but include the entire experience of extracurricular activities, counseling services, special needs assistance, etc. Thus, I fully recognize that the cuts listed on Dr. Hatrick’s Option #1 Reduction List clearly justify the outpouring of emails I have received from parents, students, and teachers. They are, in some cases, draconian and would significantly alter the Loudoun County school system.

However, a March 19th memo from the School’s Assistant Superintendent of Business and Finance to the School Board, states that all school divisions will end a year with 1-2% in unspent funds as it is impossible to budget to the exact dollar. In the case of LCPS over the last few years, years in which the BOS did not provide full funding of the School Board’s requested transfer, this has translated into end-of-year fund balances from $3.5 million in FY’05 to $27.5 million in FY’09. As Ms. Burden writes in her memo, “The LCPS fund balance has increased during the past few years…due to management actions taken during the year; an acknowledgement of dire economic times.” I applaud and appreciate the School Board, Dr. Hatrick, and his staff for that acknowledgement and those actions and their ability to create such balances without resorting to the type of cuts proposed in the Option #1 Reduction List. Certainly, a close reading of their detailed budget proposal indicates that they should be able to replicate those actions this year. In fact, Supervisor Kurtz has succeeded in finding two independent approaches to reconciling the proposed BOS appropriation with the School Board’s request, neither of which involves the laying off of classroom educators or counselors, cancellation of sports and summer school programs, furloughs, school closures, etc. My own study of the document supports her conclusion. Supervisor Kurtz has shared her ideas with both Dr. Hatrick and the members of the School Board. It is my hope that a majority of the School Board will follow the lead of Supervisor Kurtz and reject the Option #1 list, finding efficiencies, cost reductions, and consolidations that do not impact students’ educational experiences and future success.

I hope this information is helpful.