Righting the school district financial ship
The collective community has been rightly shocked by the news released by the Birmingham Superintendent Dr. Embekka Roberson on March 1 that while working on budget amendments, it was determined that the district has a $14.3 million shortfall rather than the anticipated shortfall of $1.58 million for the 2021-2022 school year due to a variety of factors – including an over-levying of property taxes.
The millage overcharge to residents of the district were $2.2 million for the 2021-2022 school year, and $1.4 million for the 2020-2021 school year.
Turns out, during the previous two years, when there was an interim superintendent following former Superintendent Mark Dziatczak's illness and subsequent resignation, no one was minding the store. Including the board of education.
Roberson, who has been with the district as a teacher and administrator for years, only began her position as superintendent July 1, 2021. The board adopted a 2021-22 school year budget that estimated a $1.58 million shortfall in June, based on what turns out was inaccurate enrollment numbers, general fund expenditures, and large differences in projected salaries, retirements and benefits.
According to a district powerpoint, the original 2021-2022 school year budget had general fund revenue at $122,471,210, and expenditures at $122,602,805, for a $1.5 million imbalance, which Roberson indicated had been budgeted for. However, reviews of the budget revealed a much wider discrepancy, with revised general fund revenue at $119,716,575, and general fund expenditures at $134,027,703 – for a negative difference of $14,311,128. That's a really big difference.
In addition, there is a $11.4 million discrepancy in general fund expenditures between the original 2021-2022 budget, which was projected at $122,602,855, versus the amended 2021-2022 budget, at $134,027,703. Salary differential was $3.5 million; retirement, $3 million difference; health insurance and other benefits, over $1.2 million difference; and $1.7 million in other fees, along with a variety of other adjustments.
Enrollment in BPS has declined from 8,375 students in the 2012-2013 school year to 7,283 students in the 2021-2022 school year. However, the district received state funding for 7,297 students for this school year, an excess of 545 students.
Some, including a candidate for the state House, Anthony Paesano, are calling for Roberson's resignation, but that's killing the messenger. We actually are praising her for discovering the enormous errors and taking charge of the crisis, asking for the resignation of the assistant superintendent of business services and bringing on board Dr. Maria Gistinger, a CPA and retired assistant superintendent of finance, to perform a thorough review.
On March 15, Roberson and Gistinger said they were working to fix the budget imbalance, through one-time grants and with $3.49 million of the district's $20 million fund balance. As for the improperly calculated homestead property tax millage, they are deferring the money collected for next year as if it was already collected from residents, and they will be addressing a new homestead property tax millage going forward. The county assessor's office also has a lot to answer for in approving the inaccurate millage amount on tax bills.
There is a list of issues with which administrators and board members must contend, including declining enrollment, a long-term issue. On this one, the decision may involve closing some schools. The reality is there are too many school buildings in the district, and with them too much maintenance and security costs, for too few students.
But here is the biggest question we – and the community – need answered: when the budget was presented to the board, did they just rubber stamp it? The role of a board, whether it is a board of education, city commission, or township board of trustees, is to more than just show up to meetings and make a few comments.
We have decades of watching city commission, city council, board of trustee and board of education meetings, and we are accustomed to local leaders going line by line, digging into budgets to ascertain the details, asking questions of finance directors and department heads during budget meetings, even doing their own research if warranted – whatever they deem necessary to get the answers for residents they represent prior to voting their approvals to spend our money.
When elected, board members are supposed to stand for every resident in the community they serve. In Birmingham, that is part of six different communities – Birmingham, Bloomfield Township, West Bloomfield, Troy, Bingham Farms and Beverly Hills. They are the fiscal stop gap between administration, and potential errors or intrinsic administrative interests, and the residents.
If an explanation or education is needed to further understand the budget, or any other issue, bring in an expert – or several. We have seen the Birmingham City Commission do that over the years, as well at the Bloomfield Township Board of Trustees.
Ultimately, it's the board which is responsible for the job of catching financial errors. Or now repairing the substantial damage.