THE PEOPLE’S BUSINESS – 9/17/13 OAK RIDGE CITY COUNCIL MEETING SUMMARY – MOE/High School Debt

The following represents an unofficial account of the single item discussed and voted upon during the September 17,  2013 City Council Special Called Meeting. The complete agenda packet as well as a video of the meeting can be viewed here. Draft meeting minutes will be posted at the city website, most likely, as part of the October 14th Regular Meeting Agenda packet.

II. RESOLUTIONS

A RESOLUTION AUTHORIZING A ONE-TIME TRANSFER NOT TO EXCEED $250,000 FROM THE CITY OF OAK RIDGE GENERAL FUND TO THE OAK RIDGE SCHOOLS. Passed 4-1-1 with Beehan, Hope, Miller and Hensley voting “Aye,” Baughn voting “Nay” and Garcia Garland abstaining. Mosby was absent.

NOTE: You can read more about the history of the high school debt debacle by clicking on the “ORS High School Debt” tag located at the bottom of this post.

My comments were as follows:

I was fully prepared to do whatever it took to avoid a shutdown of our schools. I am disappointed to find that the Board of Education’s claims are unfounded. The documentation they have provided this council does not support the claim that the state will permit our BOE to shut the schools down nor that they will withhold $1.87 M per month. The Oak Ridge Board of Education DOES NOT, NOR HAS IT EVER, had the authority to close our schools.

At over $12K per student, the notion that the most heavily-funded school system in our state is on the brink of collapse is preposterous.

This really is not about Maintenance of Effort. By all the evidence presented, this was a manufactured crisis. It began two years ago, when the BOE, citing a gentleman’s agreement, chose to renege on their high school mortgage obligation. It culminated this past summer, when, for the first time since the referendum, the schools chose to report the sales tax monies, meant for the high school debt, as revenues. The result artificially impacted the Maintenance of Effort formula.

The charter obligates council to fund our schools yet it leaves us powerless to ensure accountability of how those funds are budgeted and ultimately spent. Though this resolution states that it is a one-time transfer, there is nothing preventing the schools from reporting it to the state as revenues that impact Maintenance of Effort. So, we could in effect, be setting our taxpayers up for an even greater financial burden next year and every year thereafter.

My first obligation is to the taxpayers. The BOE’s first obligation is to its students. My child happens to be one of those students and therefore, that makes this decision very personal. This is not our money, this is not their money. This is YOUR money.

Good government doesn’t operate on handshakes and gentlemen’s agreements. Oak Ridgers deserve better from their government. They deserve accountability and transparency. I will not violate the expressed, specified, legally binding will of the people. They generously voted via referendum in 2004 to pay for the $66M high school via a sales tax increase. Therefore, I cannot in good conscience, approve the use of property tax revenue for that debt. (Note: The city finance director addressed my comments by stating that Roane County sales tax revenue was higher than expected and would be used to cover this transfer. Roane County sales tax was not apart of the 2004 referendum which specified that Anderson County sales tax would be exclusively used to pay this debt.)

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9 thoughts on “THE PEOPLE’S BUSINESS – 9/17/13 OAK RIDGE CITY COUNCIL MEETING SUMMARY – MOE/High School Debt

  1. Ms. Baughn,
    If only the rest of the Council Members would be as diligent and honest as you are in the assessment of our problems (like this one) our City’s situation would improve quickly. But, alas….
    RH

  2. This kind of thing is what turns people off about getting involved too much in our government. It’s like everything is fixed to suit a few. Thank you for being such a breath of fresh air in our local government. We could use a few more like yourself!

  3. I was approached by a Robertsville Middle School student selling over priced items from a catalog, yesterday. When I asked her what she was getting for selling it she explained that she would get things like pizza and coupons for others items. I asked what the money was to be used for and she said, “Oh we’re trying to keep them from closing our school. We need the money to keep the schools open!” Bless her heart! She was only repeating what her teachers had said. Another neighbor told her that the money had already been given to the schools. (I was at the Council Meeting I knew it.) The student then said, “We will use the money to keep it from happening again.”

    I have always maintained that having children sell items for their schools is counterproductve to their education. Children should not working for an education. She could have used the time to do school related activities. Parents, Teachers, School Board and City Council should be the ones to be concerned about the running of the schools. Not the children!!!

    This bright girl also told me that she thought the schools should turn off the lights when not in use tto save money. She said many classes leave the rooms empty and the lights are left on.

    1. Thank you for sharing your story. I’d heard the same rumor (that students were under the impression that they were fundraising to save the schools.) I’d hoped it was just that, a rumor. I’m saddened to learn otherwise.

  4. Oak Ridge is not the first city to struggle with MOE funding issues. Every recession lots of school districts get embroiled in this conundrum. It’s obvious the current city council has been placed in a jam by the past choices made by a number of parties. Through the plus-up of a quarter million dollars, the situation has been temporarily resolved. What would behoove us now is some kind follow up to see that it doesn’t happen again, and it’s not apparent that what transpired won’t happen every year in the future. This year, is the BOE going to expense or capitalize the 1% sales tax revenue? If they do the former, it will just raise the basis for the MOE next year too, and each subsequent year, we could see a ratcheting up of school budgets. I suspect several options exist to limit similar future crises.

    More fully segregate capital budgeted items from periodic expenditure budgets, especially in the revenue sources targeted to those two. Don’t depend on gentlemen’s agreements in the future. This might or might not require a referendum at plebiscite to modify the last 1% semi-targeted sales tax provision, and target debt amortization.

    I read in the Oak Ridger that the state is still using Budget-over-Budget comparisons as a MOE basis, not Budget-over-End-of-Last-Year-Financial Statement (Actual) comparisons, as required in state statute. This is probably some extenuation in the aftermath of the protracted non-recessionary recession we are still in. It suggests that there is way more latitude in the states assessment of MOE than the BOE admits. Perhaps, BOE could adjust out a small underage in various estimating factors in its current year budget, even though this would necessarily affect the following years MOE basis, until the state goes back to an actual accounting basis.

    One additional thing that could be done would be to do multiyear budgeting. Not that it is easy to project all costs or revenue, but it could give the funding agencies a heads-up on any likely impacts coming down the pike.

    1. Thank you, Mr. Kermicle. I hope you will share your suggestions with the BOE, as council is helpless to implement most, if not all, of them. Former council member Leonard Abbateillo fought tirelessly for the schools to work with a multi-year model but they refused.

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