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Did the Howard school board violate its own policy with last week’s budget adoption? One member thinks so.

The Howard County Board of Education last week ended a monthslong budget process by adopting its fiscal 2022 spending plan.

Like most years, the questions over how to spend the large sum of money — this year’s operating budget is $942 million — were plentiful.

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To partially fund its proposed initiatives, the school system and county government recommended the Board of Education approve the use of $12 million from the district’s unassigned fund balance, which is unused money from previous fiscal years.

The use of money from the fund balance isn’t atypical — the board has done it now for at least five straight years — but one school board member believes the way it’s been used violates the Board of Education’s own policy.

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Board member Christina Delmont-Small caused a back-and-forth discussion before the vote on May 27 about the fund balance, saying that using the money for recurring costs, such as staff salaries, and not having a “plan” for how to maintain those expenditures in next year’s budget is against board policy.

“The fact is that the board has a policy to direct us to utilize fund balance, one-time money, for only one-time costs, and if we should do it for recurring, that we have a plan,” Delmont-Small said. “I’m very concerned that this board did not vote to have a plan for what we will do if we are unable to sustain the funding because of the use of the fund balance.”

Policy 4070, the board’s directive regarding the fund balance, states that money from the fund is “available to be designated for one-time expenditures in subsequent years,” such as equipment purchases or new program startup costs, according to the Howard County Public School System’s website. The policy also states that money from the fund balance “may be applied to ongoing expenditures only when a viable plan designated to sustain the expenditures is simultaneously adopted.”

“Next year we are going to be in the proverbial hole for [$12] million,” Delmont-Small said. “What the policy is saying is: ‘OK, you spent [$12] million you didn’t have. How are you going to make sure that you are going to continue to fund those expenditures next year?’ ”

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Howard County school board member Christina Delmont-Small during a meeting in November 2019.
Howard County school board member Christina Delmont-Small during a meeting in November 2019. (Amy Davis)

School system officials and most of the board members disagreed with Delmont-Small and her motion to direct schools Superintendent Michael Martirano to develop a plan before the board voted to approve the budget. The motion failed 2-4 — with Delmont-Small and Yun Lu as the only members voting in favor — and the budget moved forward as planned.

As a result, Delmont-Small voted against every single budget motion.

“I think every board member hears you and our staff hears you as well,” school board Chair Chao Wu said in response to Delmont-Small. “This is definitely a tough decision as a board. No one wants to use the fund balance to fund our recurring costs. The problem for us is: what are our other options?”

The $942.6 million spending plan includes $640.8 million from the county — $20.5 million more than last year, but $10 million of which is for a one-time payment toward the district’s health and dental fund deficit — as well as $282.5 million from the state, $410,000 in federal funding and $18.9 million from other sources, which includes the $12 million from its $13.1 million fund balance.

The fiscal 2022 budget is $24 million more than the 2021 spending plan, allowing for an increase in special education staff, student support personnel and a new Digital Education Center.

While the school system doesn’t have a plan to “sustain the expenditures,” as the policy states, Martirano and Jahantab Siddiqui, the district’s chief administrative officer, both stated during the May 27 meeting that it does have a plan to fund the ongoing costs in the fiscal 2023 budget.

That plan is to ask the county for more money and, if that doesn’t work, use fund balance money again.

“Technically speaking, we should never use our savings account to cover recurring costs. That’s budgeting 101,” Martirano said during a May 26 work session. “But in light of the situation we are in with the communication with our county executive and the County Council, the decision was made to use fund balance to cover those recurring costs.”

Siddiqui said he is “confident” the fund balance will be “replenished.” The school system typically learns of how much savings it has from the previous fiscal year at the end of the third fiscal quarter. The fund balance money used in the fiscal 2022 budget is from cost-savings from the fiscal 2020 spending plan. Any fund balance money used in the fiscal 2023 spending plan would come from the fiscal 2021 budget in addition to the $1.1 million that wasn’t used last week.

“Based on our budget monitoring and our estimates, we believe that this use of fund balance is sustainable, from current-year savings we will be able to build that fund balance back up,” Siddiqui said. “This is consistent with similar recommendations to use fund balance in prior budget years, and we presented it that way [then].”

While Delmont-Small disagrees that Siddiqui and Martirano’s solution satisfies the requirements in the policy, Mark Blom, the school system’s general counsel, said the board’s use of fund balance in the fiscal 2022 budget is “consistent with the policy” given the fact that the board has used the fund balance this way for the past few years.

The difference this year is that Delmont-Small is aware of and speaking out about Policy 4070. For example, Delmont-Small, who was first elected in 2016 and was reelected in District 1 in 2020, voted to approve the fiscal 2021 budget, which included using all $8 million from the fund balance — $5 million of which went to recurring expenditures.

“The fact that this wasn’t done before this point I would have to ask the superintendent,” Delmont-Small said. “The fact that we are having a discussion about finding a way, it almost sounds like, to not provide the board and the community with a plan of what we will be doing next budget cycle if we don’t have the funds in order to make up the $12 million is very, very sad.”

The use of the fund balance wasn’t just recommended by the school system.

Howard County Executive Calvin Ball suggested in a letter to the school board on May 17 that it use the money to fund part of its proposed spending plan. Throughout the process, Ball and the County Council increased the amount of funding they would give to the school system — approximately $8 million more than originally proposed by Ball in April — but the overall budget is still $18 million less than what the school board requested in February.

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“School systems across the region are utilizing a significant amount of fund balance in their proposed school budgets,” Ball wrote. “We are asking that you consider taking similar action and use your fund balance to support our educators and children in the currently proposed budget as has been done in previous budgets.”

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“The county executive and the County Council basically told us that we should use this one-time [money] to fund parts of the gaps in the budget,” school board member Jolene Mosley said. “They kind of appointed it to be a one-time fund balance instead of it being used as recurring.”

Martirano made it clear throughout the meeting that not using the fund balance would lead to cuts to the school system’s budget. With 86% of the spending plan going toward staff salaries and benefits, not using the money from the fund balance would have led to increased class sizes and removing the additional staff in the budget, Martirano said.

Delmont-Small’s argument on May 27, however, wasn’t about whether or not to use money from the fund balance. She lost that fight in the days leading up to the budget.

Her dissent was specifically about Policy 4070 and how she believes the board is not acting in accordance with it.

“It is a slippery slope when we start to decide that we just aren’t going to follow our own policies,” she said.

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