School Board Looks at New Budget Strategy to Deal with Deficit

BRADENTON -- From the start of their stint on the school board, both Julie Aranibar and Karen Carpenter have opposed implementing a three-year plan that was voted in before they assumed office. Robert Gause asked that the board discuss a different strategy at last night’s meeting. Most of the board agreed something else needs to be done. Public comments warned of repercussions for state non-compliance.

”You really need more information before you can make a decision on this,“ said Superintendent McGonegal. ”If I were you, I’d want to see what the legislature is going to do to us, what the superintendent is going to recommend to you, and what the office of regulation is going to say about our three-year plan.“

McGonegal suggested contributing $5.9 million from the federal jobs stimulus funds the district received. This option would decrease the deficit while providing a 60-day financial surplus as required by the state’s Office of Insurance Regulation. However, the one-time additional cost would come from the school’s General Fund and instead of $15 million dollar cut next year, it would be $21 million.

”There’s suggestion on the docket by McGonegal to take what seems like free money from stimulus money, what’s really happening is that you’re taking $6 million that could alternately go directly into the classroom,“ said Tom Garland, who serves on the budget committee.

”At the end of the day, 10 percent of the budget is healthcare and it is coming out of classroom,“ said board member Julie Aranibar. ”Looking at these numbers the first thing I see is the two words no one wants to hear – staff reduction. We can’t keep this up.“

On April 1, 2011 the school board filed with the Office of Insurance Regulation the required certification for the self-funded health plan. McGonegal stated that the Actuary noted that the three year plan adopted by the School Board in September, 2010 is actuarially sound, and that a second actuary confirmed the calculations of the original report.

”There are things that I believed that I knew and there are things in the documents that I don’t believe I knew,“ said board member Harry Kinnan of McGonegal’s report. ”I won’t take money from the children even to move up in one year.“

Peggy Martin, a member of a group of concerned citizens that meets with the budget committee on a regular basis, said that the actuary of Wakely Consulting in Clearwater stated that they did not find the plan to be ”actuarially sound“.

”Didn’t the four in-house district auditors ever tell you that this district had a major financial problem in this district starting in 2007?“ she asked. ”We need to have an outside auditor to go over all our budgets!“

Ernest Sandy Marshall, a second-year member of the superintendent’s budget recommendation group warned of implications for not providing an annual report to the state's Department of Insurance showing self health insurance compliance for the last three years. 

”This issue is very serious because it leaves you open to be removed as board members, not only yourselves but also the superintendent,“ Marshall said. ”It is clear that you can be held accountable for 'malfeasance of office,' according to Florida Statute.“

”I think you guys are way behind, I think you are at grave risk, I think you have not only a judiciary responsibility but a moral obligation to get this issue resolved,“ said Garland. ”You need outside help to make sure you are not held accountable under state law.“

Julie Aranibar pointed out that on every heath care committee, insurance consultants sit on the committee and advise the groups who influence the superintendent. She feels that Manatee County does not have a defined-benefit plan. She also pointed out that the voters voted no on the additional millage rate for the school board at the last election, which she said is because they knew something was wrong with the budget.

”Not once in any of these meetings did anyone look at alternative plan,“ said Aranibar, ”It astounds me that you could have been in the red and never explore this further. I don’t think you ever got past the consultants to hear from an independent person. Every one of these reports was ordered by the superintendent and the reports contain all his documentation. We’re limited in our perimeters.“

On September 27, 2010 Manatee County School Board approved a plan to bring the health insurance out of debt and in compliance with the requirements of the Office of Insurance Regulation by having a 60 day cash reserve. This plan would still not fully comply with the requirements until the third year of the program, 2013. The district’s two unions, the Manatee Education Association, which represents teachers, and the American Federation of State, County and Municipal Employees, which represents custodial, bus drivers, maintenance and food service workers, have declared an impasse.

Employee-paid premiums are substantially below the market rate and substantially below the rates paid in neighboring school districts and by other government employers. For example, our current rate for PPO family coverage is $236 per month. The midpoint of rates for surrounding school districts and governments for PPO family coverage is $609 per month. The plan approved by the School Board on September 27, 2010 increases premiums over the three years to reduce this subsidy of dependent premiums. 

The School Board has cut $46 million from the operating budget over the last three years. Estimates are that the Board will need to cut an additional $10 to $15 million from 2011-12 fiscal year budget, depending on the results of the legislative session.