School Audits Demand Immediate Attention & Action

This week, the Boston Globe ran an article in the NORTH section about how $1.6 million in the Hamilton-Wenham Regional School District (HWRSD) financial accounts was "found" by a newly hired financial accounting firm.

The findings came as little or no surprise to many town officials, taxpayers, parents and especially to Enough Is Enough (EiE), the fiscal watchdog group that was formed three years ago in Hamilton and Wenham to stave off the school district's process of "budgeting by overrides" which resulted in burdening residents of Hamilton and Wenham with two of the highest property tax rates on the North Shore.

According to the article this was the third time in the past year that the HWRSD was found to have significantly more money that had been indicated.

One of the other two cases involved funding that the HWRSD allegedly needed in order to pay for a new boiler for the Cutler School.  Faced with the urgency and need as expressed by the School Committee (SC) that no funds were available, voters, along with support from EiE, overwhelming approved bonding at both Town Meetings to help pay for the project.  Now we are told that the funding was unnecessary and that the district paid $794,000 for the heating system out of existing funds.  The question now is whether the SC will continue to seek the bond approved by the voters FOR THE BOILER and attempt to divert those funds to other projects…such as work on the High School auditorium…a project that was previously rejected by the voters.

According to the Globe article, SC chairman Alexa McGloughan praised the work of the new financial accounting firm, stating "I think we have finally cracked the code on how to demystify school accounting" and that she felt that new accounting practices would lead to better efficiency.

Enough Is Enough has responded by saying it wishes that Ms. McGloughan felt the same way about the thorough and lengthy (400 pages) and complete OPERATIONAL AUDIT REPORT that was completed last year after having been overwhelmingly approved by voters in both towns.  That report clearly supported a previous report (The Blue Ribbon Report) that found that the HWRSD costs nearly $2 million more per year than comparable school districts.

The difference with the OPERATIONAL AUDIT is that it clearly paved the way for correction of the school cost discrepancies with specific recommendations.  Unfortunately, the SC and district have failed to implement the audit's numerous COST-SAVING recommendations and initiatives, choosing instead to implement the few COST ENHANCING initiatives from the report.

This failure to improve the efficiency of our school district, after being handed a $90k Operational Audit roadmap, is unacceptable.  Combine that unwillingness to act on the Operational Audit with the recent financial audit which uncovered $1.6 million, and according to EiE, "that suggests better efficiency is not, as suggested within the article, a primary concern of the School Committee".

"You're going to create a better budget going forward if you know where you're coming from," McGloughan stated.

I believe that should be a naturally true statement and hope that the SC will not continue to ignore the cost reducing recommendations of the Operational Audit when preparing their budget.  It's been more than a year since the Operational Audit was unveiled.  It's time to implement many of the recommendations that until now have been ignored... ignored similarly to the financial accounting that  recently uncovered the $1.6 million.

QUESTION: Does anyone else wonder much we paid to have the new accounting firm straighten out the books and in so doing find the $1.6 million?  Talk around town is that the firm spent more than 200 hours on the project.

This Is the Truth...These Are The Facts.

To borrow a quote from my friend Barbara Anderson...

"There are two kinds of people, from various perspectives, reading this column: 1. People who want to know the truth; and 2. People who would rather not know until it's too late."

This week's blog article explores the belief that the Hamilton-Wenham Regional School Committee is a liability to our towns, our residents AND our schools. Their budgeting ineptitude, autonomy and arrogance for at least the last 10 years has resulted in a property tax rate that is one of the highest on the North Shore and a school district reputation that is in steep decline.

Follow along for a minute to see how the School Committee's many poor decisions have resulted in the unfortunate position we now find ourselves in.  Here are the facts:

School override after school override (aka: "overandoverrides"). Since 2001 the school district has demanded nine Proposition 2.5 overrides. Eight have been granted. The cumulative cost to the taxpayers for those eight overrides = $43,970,000.  "Budgeting by Override" never was a sound accounting process and was most certainly unsustainable.

Loss of property values. The overrides have resulted in Hamilton and Wenham having two of the highest property tax rates on the North Shore. This means that many home buyers are circumventing Hamilton and Wenham in favor or surrounding communities, many with equally good schools. The end result is a significant loss of value in your home and your equity.

Highest per pupil cost.  Two independent reports have concluded that residents in Hamilton and Wenham pay about $2,000 more per pupil in our school district than in peer school districts.

Blue Ribbon Report on school district costs. The Blue Ribbon report, and a subsequent update to the report, indicated that our school district costs residents $2 - $4 million more per year than comparable school districts in Massachusetts.

School Superintendent departure. In a move some have called "fleeing from a sinking ship", former School Superintendent Marinel McGrath resigned and took a position in Andover, MA. Her assistant superintendent and business manager, Paul Sysmanski, also departed... moving first to Billerica and then over to Andover to join with McGrath again.

New School Superintendent. In a rush to replace McGrath, despite calls to slow down and seek an interim superintendent, the School Committee unanimously approved the hiring of Dr. Raleigh Buchanan and granted him a three-year contract at a significantly higher salary than that of his previous position as Superintendent in Haverhill.  Residents were told that we needed to offer a high salary in order to attract the best candidates.

School Operational Audit. Hamilton and Wenham voters overwhelmingly supported funding an Operational Audit of the School District to determine what was wrong and where efficiencies could be found. The audit report suggests that savings of up to $15 million over 5 years are possible and offers 125 financial recommendations. The School Committee has all but ignored the cost-saving recommendations and has focused solely on implementing the cost-enhancing recommendations. The School Committee has resolutely claimed the audit is "flawed"...EXCEPT when it supports their agenda of additional spending.

2012 School Budget Season. The School committee's WORKING FINANCE GROUP, after determination that the 2011 district budget was OVER-FUNDED by more than $1 million, recommended a so-called "give back" to the towns of $350k.

The School Committee refusal. The School Committee ignored their own WORKING FINANCE COMMITTEE'S recommendation and voted to give nothing back to the towns... Nothing.  Zip.  How's that for "compromise"?

The School Committee violates the Open Meeting Law. The School Committee was forced to admit they violated the State's Open Meeting Law on numerous occasions during the budget season, despite, as their attorney stated, all members having been trained in procedures and processes of the law.

Towns boards seek return of unspent funds. Town officials (ALL members of both Boards of Selectmen and Finance and Advisory Committees of BOTH towns) requested the School District return $500k in unspent taxpayer funds (half).  They cited additional approved state funding of $120k and a Latin teacher salary ($77k) with no Latin teacher. Recognizing that the district was OVER-FUNDED by more than $1 million in 2011, the Selectmen and FinCom members felt that requesting only the return of $500k represented an extremely fair compromise proposal.

The School Committee's refuses. Again...No willingness whatsoever to compromise.

School budget rejected by voters. Voters at the Hamilton Annual Town Meeting approved the motion to give back $500k to the taxpayers and rejected the School Committee's budget, requiring the School Committee to certify a new budget and resubmit it for consideration.

School Superintendent reviews delayed. For various reasons, the yearly reviews of the Superintendent of Schools were delayed repeatedly until AFTER both Town Meetings were over.  Once they were released, it became abundantly clear that the School Committee had been on a collision course with Dr. Buchanan.

Another School Superintendent departs. Less than one year into his three year contract Dr. Buchanan abruptly resigned claiming "irreconcilable differences" with the School Committee, the result of scathing reviews by most members of that committee...the same committee that unanimously and emotionally approved his hiring one year ago. (Cost to the district to buy out his contract: $115,000.00)

Middle/High School Principal moves on. Matt Fox accepts a job as Middle School Principal in Marblehead.

Another School Principal looks to move on.  Winthrop School principal Carrie Vaich sought a new position and was named a finalist in Newburyport and at the Rollinsford Grade School in NH.  After Newburyport chose the other candidate, she chose to remain in Hamilton.

School Committee incumbents are voted out of office. All three open positions on the School Committee are won by new candidates...sending a clear message, one would think.

A School District in trouble.  We now have no Middle School principal, no High School principal and no full time Superintendent (Peter Gray, thankfully, is serving as acting superintendent...for the time being.)

School Budget "re-certification". As a result of the Hamilton Town Meeting vote, the School Committee certified a new budget, this time with only a $300k "give back" instead of the $500k approved by the voters and recommended by town officials.  The SC has referred to this amount as a "compromise proposal"...suggesting that the STARTING POINT was $500k, instead of $1 million, which is the ACTUAL OVER-FUNDED AMOUNT.  This means Hamilton will have to hold a Special Town Meeting later this month and incur the additional COSTS, INCONVENIENCE and ANGER of the residents.

This last decision was perhaps the most unfortunate and misguided act yet by the HWRSD School Committee. A significant opportunity was lost by the blindness of all but two committee members (newly elected members, I would point out).  Had they not been so blind, they surely would have understood that most of the divisiveness, the mistrust, and the angst of the residents of Hamilton and Wenham could have been eliminated had they simply agreed to what the majority of COMBINED VOTERS OF BOTH TOWNS expressed at the two May Town Meetings: Give us back just HALF of our unspent tax funds.  Half...that's all we're asking for.

The truth... there it is.  The facts...there they are.

As Barbara's quote at the beginning of this article stated, it may be too late for those of you who do not want to know the truth.

But I sincerely hope it's not.

Please plan to attend the Special Town Meeting on June 27th at the Winthrop School at 7:00 PM and let your voices, and your votes, be heard again. 

Vote NO to the proposed school budget at the Special Town Meeting.

Thank you.

4 Reasons Why The School Committee's "Compromise Solution" is NOT

I thought about titling this blog: "Hello?...Wake Up!"  I may still.  Or perhaps I'll just insert the wake up notices wherever I feel they are appropriate.

But I digress...the main issue of this blog concerns the results of the Hamilton-Wenham Regional School Committee's (SC) meeting of June 9.  It was at that meeting that the SC voted to "re-certify" the school district budget as a result of voter opposition to their original budget at the Hamilton Annual Town Meeting in May.

You may recall that the 2011 school district budget was OVER-FUNDED by more than $1 million and as a result, by unanimous consent of both Hamilton and Wenham's Boards of Selectmen and Finance Committees, the 2012 school budget approved at the Hamilton Town Meeting required a "give back" (or reduction from the towns) of $500k from the district, or just half of the unspent funds.  Sounds like a fair and reasonable compromise, right?

Unfortunately, the School Committee has now (once again) chosen to defy our town officials and the taxpayers by choosing to certify a new budget with only a $300k give back.

They are calling it a "compromise solution".  Here are just 4 things to consider regarding the SC's so-called "compromise solution":

1.  This spring, the SC's Working Finance Group voted to give back $350k to the taxpayers for OVER-FUNDING the 2011 school budget.  The lone dissenting vote on that committee came from SC member Richard Boroff who was subsequently trounced at the polls in a re-election bid.  (Hello?...Wake up!)  The Finance Working Group's recommendation was ignored by the full School Committee who chose instead to keep the $350k...without any kind of compromise.

2.  Both Hamilton and Wenham's Boards of Selectmen and Finance Committees originally voted to accept the $350k figure recommended by the Finance Working Group until it was discovered that the state would be providing an additional $120,000 in funding AND it was discovered that the 2012 school budget included, among other things, a salary for a non-existent Latin teacher (approximately $77,000).  At that point, all the same town officials then voted to increase the amount of the give back to $500k, again unanimously.  (Hello?...Wake Up!)

3.  The School Committee had the opportunity to end this entire issue had they agreed to give back half of the taxpayers' unspent funds.  If they had agreed to the $500k, we would be done.  It would be over.  No more Special Town Meetings.  No more arguments and fighting over what rightfully BELONGS to the taxpayers.  But instead, the SC has once again arrogantly chosen to go to battle and burden the residents of our towns with more expense, inconvenience and angst.  (Hello?...Wake Up!)

4.  Lastly, $300k is simply NOT a "compromise solution".  The SC may like the sound of that, but it's a misnomer.  You see, when it was shown that the school district had been OVER-FUNDED by $1 million in fiscal year 2011 and the Towns asked for just half of that amount to be returned...THAT was a compromise solution.

The $300k figure agreed to by the SC this week "compromises" the actual compromise solution, which is simply to give back half of what was overcharged to the taxpayers.  (Hello?...Wake Up!)

$500k is the compromise solution.  Even a third grade math student could figure that one out.

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UPDATE: 6/14/11: The following is an excerpt from a white paper provided by the Hamilton Board of Selectmen and the Finance Committee days before Hamilton's Annual Town Meeting in May.  It seems appropriate to revisit the statement as we head into another Town Meeting, faced with the same issue:

"At the risk of oversimplifying, the entire question of which approach to support could be boiled down to one question: do voters/taxpayers want to put money into the District's E&D fund for either potential problems in FY12 or for expenses in FY13, or do voters/taxpayers want to keep the money in their own pockets and fund the District as needed based on the merits of those needs as they arise?  The FinComs and BoS of both towns believe that voters/taxpayers would prefer the latter."

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I want to personally offer thanks and kudos to SC vice-chairman Roger Kubel and new SC member Bill Dery for eloquently expressing what I have attempted to communicate above and for trying to make the other members of the SC understand what the real, and fair, compromise solution is.  It appears however that the remaining incumbent members learned little from the Hamilton Town Meeting's voter's wishes regarding the original budget OR the election results on their own board.  (Hello?...Wake Up!)

When Is An Override NOT An Override?

Several readers of this blog have asked me to print the statement which I had the honor to deliver on behalf of Enough Is Enough at the Hamilton Town Meeting, in support of an amendment to the School Committee's proposed budget.  Here it is:

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Good Morning fellow residents…I come before you today to speak on behalf of Enough Is Enough.

We support the proposed amendment before you.

QUESTION:...When is an override NOT an override? We suggest it’s when a budget includes funds that are not needed. This year the School committee is demanding $500k MORE than our Finance Committee and our Board of Selectmen and our Town Manager unanimously agree the school’s need.

If you think about it, bloating the school budget by $½ million is quite clever. You see, the last time the School Committee asked for an override, it was denied by the voters. And despite claims to the contrary, the sky did not fall in. That last attempt at an unneeded override was for $1.2 million. I say “unneeded” because the schools got along just fine without it. In fact… even without that $1.2 million, services remained in place, teachers were not laid off…AND this past year the district ended up with a SURPLUS of over $1 million. A SURPLUS!

Today, rather than risk being denied another override by already overburdened taxpayers, the School Committee has simply added unneeded funding into their budget. Don’t be fooled by this ploy. It’s tantamount to an override… but disguised as a budget. At least a real override is for a specific purpose. This unneeded $500k is for things that “may” or “could” or “might” happen…....possibly.

All we have heard over the past few weeks from the School Committee and their budget supporters has been non-specific rhetoric, such as:

QUOTE: “We can’t rule out POSSIBLE service cuts and teacher cuts.”

QUOTE: “It’s POSSIBLE that the E&D account may not be large enough to cover UNEXPECTED expenses.”

(B/T/W…one veteran member of the SC has stated that the E & D balance would be one of the highest amounts he has seen in 19 years on the committee.)

QUOTE: “Anytime you take money away you put things AT RISK.”

QUOTE: “We COULD be faced with revenue shortfalls”

QUOTE: And this is my personal favorite: “It’s difficult to IMAGINE what services might be cut.” YES, it is. It surely is.

That’s a whole lot of innuendo… a lot of “could’s” and “might’s” and “maybe’s” and “possibly’s”. On the other hand, here are some FACTS we would like you to consider:

FACT: The Blue Ribbon Committee (remember them?) came to the conclusion that our school district outspends comparable school districts by between $2 and $4 million a year. As did the Department of Education.

FACT: An expert and detailed independent Operational Audit came to the same conclusion in a four hundred page report.

FACT: The district administration’s original budget, supported by a majority of the members of the School Committee's Working Finance Sub-Committee, was for $350,000 LESS than what the School Committee is demanding from you today.

FACT: Since that time we now know that an additional $120,000 in state funds will be available to the schools.

FACT: The School Committee’s budget ALSO includes salary compensation ($77,000) for a Latin teacher…but there is NO Latin teacher.

I could go on, but in the interest of time and in conclusion, we ask you to consider the following 3 things as you prepare to vote on this important issue:

1. Since 2001, our towns have funded 8 school overrides that have cost the taxpayers $43,947,000 over that 10 year period.

2. With over $1 million in EXCESS funding left over from LAST year, it is fair and appropriate to ask the school district to return a portion of those unspent funds to the taxpayers. This year the Town of Hamilton mistakenly over-charged the taxpayers $275,000. The Selectmen, with the support of the Fincom, did the right thing and immediately voted to return it to you, not keep it in a reserve fund as the schools are demanding. The school district owes you the same courtesy and respect your Selectmen provided you when they “gave back” your money. And although the chairman of the School Committee has publicly referred to the $500,000 as (quote) “our money”, it is NOT their money…it’s yours.

If UNEXPECTED costs are incurred, we suggest the district use the other $500,000 in unspent fiscal year 2011 funds… and if need be, include the $77,000 salary of the non-existent LATIN TEACHER.

3. Lastly, it’s no secret that Hamilton’s property tax rate is one of the highest in Massachusetts, the direct result of unchecked and spiraling school spending. As a Realtor, I can assure you that such a high property tax rate diminishes your home’s market value and your equity…as well as your ability to sell should you need to. If you want to reverse this trend, you need to vote to approve the amendment before you.

Please join me and EiE’s members and supporters… along with ALL the Selectmen and Finance Committee members and our Town Manager… and cast your vote to APPROVE this amendment.

It is right… and it is fair… and it DOES NOT and WILL not result in diminished educational services for our children.

Don’t approve another unnecessary override… cleverly hidden inside the School Committee’s proposed budget.

Please vote YES... in favor of this amendment.

Thank you.

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The motion passed 181 to 128.  Congratulations to those who supported the Town budget, as amended.

UPDATE: Posted 5/22/2011: By now you have likely heard that the School Committee has abruptly TERMINATED the employment of Superintendent Dr. Raleigh Buchanan.  It makes you wonder about the "unexpected" expenses they touted at Town Meetings earlier this month in support of keeping the over-funded $500k of unspent taxpayer's money.  Also, does anyone else sense that they deliberately waited until AFTER Town Meetings were over to announce their reveiw of Dr. Buchanan...which in turn led to this unfortunate event?

There's A New Group In Hamilton & Wenham

You've all heard of the citizen taxpayer watchdog group known as Enough Is Enough (EiE) right?

They're the ones that successfully ended the previous addiction to school overrides in Hamilton and Wenham and also drew overwhelming support from voters in both towns for an Operational Audit of the school district that is still being debated and considered by the School Committee (SC) and the towns.

Well, it appears there is a new group in town, known as Enough Is NEVER Enough (EiNE).

Who are these people?  You know them as the Hamilton-Wenham School Committee and their actions this past week and at last night's school budget vote is nothing less than appalling.

To his credit, school committee member Don Gallant, one of the three members on the Finance Working Group, had this to say at the opening of the discussion on whether or not to vote for a level funded school budget, less $350,000:

Gallant: "The Finance Working Group had another meeting on Monday...this past Monday night...in which 8 of the 9 school committee members were there. (*See note below) By a 2 to 1 vote...Ann (Minois) and myself in favor, and Richard (Boroff) not in favor...we passed this budget as our recommended budget to the full school committee.  This budget includes the (so-called) $350,000 give back to the towns.  For a variety of reasons we did tax too much for this current year."

He went on to say: "In my 19 years (on the SC) this is one of the highest amounts of money left in the Excess & Deficiency account."

The lone NO vote on the the Finance Working Group, Richard Boroff, had this to say:

Boroff: "I don't see any reason to give it back.  If it's a give back, it would be a give back for a political reason only and it does not make sound educational sense to me.  I've been around long enough to see the district get screwed when it tried to help out the towns do something and I'm not willing to put that foot forward."

How about putting that same foot in your mouth, Mr. Boroff?  Can you believe this guy?  He must be vying to serve as president of the new Enough Is NEVER Enough group.  But wait, there's more:

Boroff: "In all those 8 years (that I have been on the SC), the school district has taken a hit.  Every single one, except for one year.  On the other hand, the towns have funded or increased their funding and refused funding to us at times.  And one time it was a minuscule override...it was about $250k or $260k override which failed on the first go round, and we refused to accept that and went for the same thing.  It was an insult.  A very big insult."

A very big insult?  Really?  Then consider this...

It's insulting to suggest that any override is "minuscule".  In the case of the override Mr. Boroff refers to, the year was 2006 and the amount was $203,000...that year.  In 2007 it was another $203,000.  And again in 2008, 2009, 2010... and again this year...and again without end, because overrides are added to the tax levy and go on FOREVER.  So that's $1,218,000 since the override was approved in 2006.  I don't think anyone but Mr. Boroff would call that a "minuscule" amount.

Now let's go back to the first Boroff quote above where he says, ever so politely:

Boroff: "I've been around long enough to see the district get screwed..."

Is that what you call eight Proposition 2.5 overrides for the district since 2001?  Overrides whose cumulative total, over the past 10 years, adds up to $43,947,000.00.  Overrides that cost the taxpayers nearly $7 million every year going forward?  And that's NOT including the 2.5% tacked on each year to that amount by the towns.  I think it's the taxpayers that got, in Mr. Boroff's words...."screwed".

But I digress.  Let's get back to the Enough Is NEVER Enough group.

At one point in the meeting John McWane, chairman of the Hamilton Finance Committee, got up and asked a few enlightening questions:

McWane: "It is my understanding that initially you had proposed a Latin teacher.  Is that still in the budget?"

Alexa McCloughan (SC chairman): "The funding for the Latin teacher is still in the budget.  It is doubtful that we will have Latin."

McWane: "So you don't have the teacher in, but you do have the money?"

Alexa: "Correct.  We have the money in."

McWane: "Which is a little odd to me.  It seems to me that if you take something out of the budget...if you take a position out..."

Alexa (interrupting): "It's in our instructional line."

McWane: "Right.  I'm just saying that typically when you take a position out, you also take the money out.  But I guess that's not your practice."

Alexa (nodding): "That's not the case."

And finally...perhaps the most obvious exchange of the night indicating the birth of Enough is NEVER Enough:

McWane: "We should be clear that your budget, in terms of what you spend for the schools would not change under either scenario (with or without the give back).  Is that correct?"

Alexa: "Correct."

McWane: "And it's up a million dollars over last year...over the current year"

Alexa: "Uh huh."

WcWane: "Okay.  So what we're really discussing is the $350k and the question is: Should it go to your E&D...or should it go to the taxpayers' pockets.  Is that correct?"

Alexa: "Yes."

WcWane: "Okay.  I just want to make that clear."

So there you have it folks.  Please join me in welcoming the new group: Enough Is NEVER Enough.

...but remind them at Town Meeting and the polls that in Hamilton and Wenham, Enough IS Enough.

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*Question: If 8 out of 9 school committee members were present at this meeting, shouldn't it have been posted as something other that a Finance Working Group meeting?  Smells a little like a violation of the Open Meeting Laws.  Anyone care to comment?

Update 5/6/2011: click here to read what happened.