Commissioners Question School Board, Approve Budget (MD)

July 1, 2010

The Frederick County Board of Education got the budget it wanted Tuesday, but not before engaging in an often heated exchange with the Frederick County Commissioners. The commissioners demanded answers about the board’s apparent secretiveness in how a surplus in the health insurance fund will be spent.

The commissioners voted 3-2, with John L. Thompson Jr. and Blaine Young opposed, to approve the school board’s bud get, despite not getting a definite answer on the fate of the fund. Commissioners Jan Gardner, David Gray and Kai Hagen voted for the budget.

The commissioners rejected another motion in a 2-3 vote supported by Thompson and Young that would have required $5 million be placed in a trust fund for future health costs for retirees.

The commissioners must formally adopt the Board of Education budget every year, a move typically considered a formality because the school board has the authority to determine how money will be spent. Additionally, the county usually faces state requirements dictating the commissioners allocate a certain amount of money to the school board.

But the debate got contentious this year after the commissioners learned the school board had a surplus of $12.5 million to $14 million in its employee health insurance fund.

The surplus, created with contributions by the Board of Education of about 80 percent and employee contributions of about 20 percent, is up for discussion to be given to school employees, either in whole or in part.

Commissioners said they were concerned that employees could end up with the 80 percent contributed by the board, which they consider taxpayer dollars.

"What is the purpose and intent of the excess funds that remain of that surplus or windfall, whatever you want to call it?" Young asked.

School board members said they could not discuss it until after they have concluded negotiations with the Frederick County Teachers Association.

"At the time that decision’s made, which will be this summer, you will know exactly what the intent will be," board member Michael Schaden said. "Again, that is not part of what we’re asking you to vote on today."

Reached by e-mail after the meeting, teachers union president Gary Brennan echoed that union officials and board members have agreed to not discuss the details until negotiations are concluded.

The commissioners will not need to be consulted again if the school board decides to give the entire surplus to employees, based on what school officials said Tuesday. The school system could offer premium holidays where employees pay less for health insurance, rather than being given a direct check.

If the school system gives teachers payments, it would need to come back before the commissioners as a fund transfer.

Thompson said choosing to conduct negotiations out of the public eye is not the same thing as a gag order on individual board members.

"The First Amendment protects your right to speak, especially about important matters concerning the public," Thompson said. "And I can’t think of anything more important than how the public money is spent. You have a right to speak your views. If you choose not to, you have the right to do so as well."

Commissioners had varying opinions about how the money should be spent, and were not shy in sharing them with the school board.

Thompson told board members the surplus should be applied to a trust fund to address long-term costs of retiree health benefits, since there is a projected deficit in that fund.

"We’re all talking about how wonderful this $15 million surplus is, but nobody wants to talk about the half-billion unfunded lia bility that’s lurking over the horizon," Thompson said.

Gardner said that the money should be kept for next year, when the school board could face even tighter fiscal issues in the operating budget. She predicted the state could shift half the cost of teacher pensions into that budget, a substantial cost.

School board members declined to reveal specific plans, however.

Bonnie Borsa said discussing the negotiations with the union could be considered an unfair labor practice.

"What goes on is confidential within our meetings, and I think we are dangerously close to breaching that confidentiality," she said.