Special Education Stabilization Fund
Video Recording: Northampton Open Media: School Committee 6/13/24
Meeting Agenda: June 13, 2024
Video Time Stamp: 3:50:08
Mayor Gina-Louise Sciarra: This brings us down to H, which is the vote on the Special Education Stabilization Fund under Master General Law Chapter 40, Section 13E. And I will sort of introduce this. So, Increasing needs and costs associated with special education are, you know, something that we’ve certainly talked about, I think, for years, but have been a major concern that we’ve heard about a lot this year. And so, to create more recurring, stable revenue for special education and to help with unexpected and unbudgeted needs during the year, I’m recommending the creation of a Special Education Stabilization Fund, as I said, under Master General Law Chapter 40, Section 13E.
And additionally, this will hopefully relieve some pressure on the school choice fund so that it can start to build back up. So under this state provision, a majority vote of both the school committee and the city council is needed to create this Special Education Stabilization Fund. Once established, a majority vote of both bodies is needed to appropriate funds from it for annual, unbudgeted, or unanticipated out-of-district or extraordinary costs associated with special education. I’ve requested approval from the city council to seed the stabilization fund with $800,000 from the undesignated fund balance. This will allow the possibility of growth from interest in the fund in FY25 and for an annual appropriation into the fund beginning in FY26, up to the amount of the prior year’s Medicaid reimbursement, which has been around $200,000 for the last two years, plus any turn backs from NPS to the city.
This Special Education Fund will provide additional investment in special ed plus additional annual investment, plus the ability to assist with unexpected expenses, with oversight, instead of one-time infusions of funds that lead to larger deficits. So the first annual appropriation of $200,528 is built into the amended budget that is before the city council right now. So, pending the school committee’s vote to create this fund and appropriate those funds—the $200,528—and it’s also pending the city council creating it, seeding it, and appropriating those, the $200,528. So, that is the proposal . . . I think, there’s been some question about whether you can do an annual appropriation from it, and you can.
So, this fund allows expenditures for unanticipated or unbudgeted special education costs. For the annual appropriation use, we are using the unbudgeted portion of the expenditure allowance. If the fund is established, then the school committee may vote a budget which includes the amount to be taken from the stabilization fund up to the amount received in Medicaid reimbursement from the prior year. So, for this year, this amount is actually from FY23 because that is closed, and so next year it would be from FY24. So and that would be to cover special education costs that are not budgeted for. It would then be built into the city budget.
The second type of appropriation from the fund are the unanticipated things that may come up after the budget has been set. So, midyear unanticipated costs, which we heard tonight do happen, and these are . . . have not been in the budget as Member Stein noted. We do, you know, make transfers through things, but this would be an additional source of funding for those unanticipated and then an additional $200,000, around $200,000 per year for special ed, that would be . . . that had not previously been available. So . . . and we have double-checked this, we’ve confirmed this with our outside auditor, Scallan Associates, and this is an acceptable use to do the annual appropriation, it is in conformance with the law and also is similar to how other communities have used the special education fund, so for an annual appropriation and then a midyear unexpected cost to then do an additional appropriation. And I think I’ve covered everything; you’ll let me know if I haven’t.
Michael Stein: Thank you for the presentation.
(inaudible conversation among members about a Motion to discuss)
Well, since it’s just the topic and potential vote, right, so we can make the motion after.
So I just want to focus on a few things, right? So this is for unanticipated and unbudgeted costs. So we made a… we have a budget that’s going to be the budgeted cost. This isn’t for that. And I had a lovely conversation. This is the most amazing experience I’ve ever had with government, ever. Okay, so I called Jay Sullivan, who’s the Associate Commissioner for School Finance and District Support Center for DESE. And he wrote the advisory for DESE on how these funds are supposed to be used. And I called him to ask about this unbudgeted piece and unanticipated piece, and he was on vacation. So I got this bounce back.
Mayor Gina-Louise Sciarra: He’s on a cruise.
Michael Stein: And I, uh, so I wrote to whoever else, like, can you help me? And Jay calls me from the cruise, and we had a lovely conversation. It was unbelievable that he called me. So what he explained to me, um, was that . . . these are for costs that are unanticipated, unbudgeted, so not for annual appropriations. He did say that the DOR will not step in to stop you, but the purpose of the fund is to address things that you didn’t foresee, like these transfers or, the one time I’ve seen this in our district has been when we had a student whose parents lived out of state, their last known address was Northampton, they were in a different district but needed a private placement, and we got the bill for the private placement. That was the one time where I saw that, and I believe we handled it with an internal transfer.
So I guess in what Jay explained to me was essentially if you do use it for unbudgeted costs on a recurring basis, what you have to do is find warrants for that amount of money, each, and then the city, then the school committee has to vote for the warrants after the appropriation is made for that amount, then the city council has to vote for the appropriation. My point is if you’re gonna give us $200,000 for this, just put it in the budget. Save the paperwork and the time.
It’s reimbursements for services provided by the school, and it could just be added to the operating budget rather than having us all find $200,581 worth of warrants that we can then all individually pass as a school committee and then have the city council individually pass in order to expense. But it’s not really the point of the fund, right? So I’m worried about . . . I’m also worried about locking up that much money in it when we haven’t heard an accounting of how much we face in unanticipated costs a year.
Are we talking about $60,000 a year? Are we talking about $50,000?
Like, are we going to lock up $800,000 and then use $200,000 for operations when we might face a little bit that we’re then going to just transfer internally anyway rather than draw on that fund? So I’m just concerned about it, and it doesn’t make a lot of sense to me given the needs that we’ve been talking about, um, for use of that $800,000. I’m a huge proponent of setting up one of these funds. Josh Dixon had suggested this a few years ago. We talked about trying to seed it with tailings at that time and kind of got stalled out.
It’s a good idea; it just . . . I don’t understand where we’re trying to make it operational too. So yeah, I just, I don’t, I don’t quite understand the amount. Obviously, we don’t vote on the amount; we’re just voting on setting it up and then appropriating that amount if the city council gives it to us. But I don’t know why we’re going to put ourselves through this for recurring operating money. Even if the DOR is not going to step in and say we can’t. It’s really just for unanticipated, unbudgeted costs, not for giving an annual appropriation to the budget to help offset our special education costs.
The last thing I’ll say is that once you have, say, we have a student that moves into the district this summer, turns out they need additional services that we did not budget for, as our interviewee said, you know, sometimes we’re not going to have the grids align. We’re going to have to hire out. This all happens. That’s unbudgeted. Once you have it for one year, it’s no longer unbudgeted. You’re supposed to budget for it. The idea we’re going to just use recurring money for this stuff—it just doesn’t make any sense for a practice. I’ll leave it there.
Emily Serafy-Cox: Before the presentation even, actually I have written a few questions down. One was how much, in obviously in a range, might we expect in terms of extraordinary special education expenses a year? Obviously, you know, you could have a student move in and it’s $20,000, you could have three students move in and it’s $300,000. So it’s, you know, there’s a range there, but I’m just curious if there’s any sense of an average, if we can. So that’s probably a question one for Josh is my guess. And then a question for the Mayor is – I’m curious why a special education stabilization fund rather than an education stabilization fund, generally? Is that a thing that other communities do?
And then I also wrote down . . . I see that the expenditure can be no more than the expenditure for the annual appropriation, if it’s allowed, can be no more than the Medicaid reimbursement for the previous year. So yeah, why not just put the Medicaid reimbursement money into the school budget in the first place, is my question. So those last two questions of why SPED, why a special education stabilization fund instead of a more generalized stabilization fund for education, and then why not just put Medicaid reimbursement money into the school budget—those two are for the Mayor.
And then the first one, of the range of expenses, is probably for Josh.
Dr. Portia Bonner: Josh is available; he is online, and I’m going to defer to him about the range of projections. I mean, because you could have one student that’s $250,000. I mean, you really don’t know. So, Josh, if you could speak to that, please.
Josh Dickson: What I would say is that, so if we think about unexpected costs, really the most expensive costs are either students who have moved into the district, which may require additional staffing. So, for example, this Fall—and so my exact numbers may be a little bit fuzzy just because I wasn’t here this Fall, I was on medical leave—but I do know that we needed to add a number of professionals to the elementary schools, as well as either NHS or JFK, one of the two, to support students who had moved in from out of state. So what I recall from those discussions is that there was about three paraprofessionals, give or take, and so that would be roughly like $60,000. So, you know, that you may be able to squeeze out of the local appropriation if you shift things around. Sometimes we lose students also over the course of the summer who may move out of state, and then we may be able to repurpose that.
On the high end, the most expensive costs are really out-of-district costs. So, for example, if we had one student, on the low end of tuition plus transportation, you’re looking at $110,000. On the high end, one of our more expensive placements where we currently have students placed plus transportation is looking at $165,000 to closer to $200,000. And so that is not really something that you’re going to be able to squeeze out of the local appropriation. When you’re looking at also the fact that we’re really slim. So we talked about that a little bit last year also around, for example, I think in—or maybe it was—maybe it wasn’t; it must have been in July, July or August, where we transferred money and appointed a new teacher to the high school to support additional reading services for students. So we brought a student back and were able to do that.
But I think about sort of a situation where – what happens if we didn’t have that tuition money to transfer? And then you may be finding yourself with needing to repurpose either current staff to meet that need or hiring additional staff to meet that need. And so that feels a little dangerous. But I also have heard the commentary tonight, which I completely understand, around if there is available funding, why wouldn’t you use that funding in other ways? And so I can see both sides of the equation, and so I’m happy that I’m not the one that has to sort of make that decision, for sure.
But what I would say is that what I would hate to see—it’s easier to plan when you know what you have, than it is to sort of try to make a plan for what you don’t know. And so I think the benefit of a stabilization fund is that if we had a $200,000 cost—which could happen—then at least you’re not losing current staff with which to fund it, or repurposing current staff with which to cover. And that is where it feels like a safety net that is helpful. So that would be sort of my stance. I also know that the Mayor’s appropriation is rather large, but if you think about the fact that $200,000 only covers one student, it doesn’t really stretch quite as much as it seems like it would. And so that would be sort of my general feedback on the fund.
Mayor Gina-Louise Sciarra: So, to why not a general fund: this is—we researched what other communities have done, and this is a mechanism provided by the state or allowed by the state that other communities have used successfully. And that will allow a regular appropriation that will be sustainable for, you know, in perpetuity. And, you know, that was something that we’re trying to do is figure out how to get more recurring, stable revenue into the Northampton Public Schools. And if we just transferred the Medicaid reimbursement without seeding the stabilization fund, then you’d have roughly the same amount of money spent this year, but you wouldn’t be setting up the structure to provide additional stabilization for special education, and there wouldn’t be the added benefit of being able to draw funds mid-year for expenses that came up.
Video Time Stamp: 4:07:39
Emily Serafy-Cox: Thanks, Mayor. I . . .so that it sounds like certainly that it’s a fund that other communities have used, which makes sense. Are you then saying that there is no mechanism for an education stabilization fund that is not specific to special education?
Mayor Gina-Louise Sciarra: This is—this is something that the state has set up or allows this, so I think you could set up another stabilization fund; you could set up a more general one. But this is something that has been used successfully by communities to help particularly with special ed costs, which are, you know, the costs that have been rising the most, or one of the things that we’re most concerned about, and also, um, has the most . . . likelihood . . . of having unforeseen costs that happen after the budget has been set for the year.
Emily Serafy-Cox: I hear that. I also, in a funny way, it feels like then we’re a little bit setting up, like mini-fiscal cliffs each time. And not that I think it’s a bad idea, it’s just something to keep in mind as we’re thinking about how we utilize it. And, if there’s—yeah, I don’t know—at this point, I have more questions than answers, I guess is really where I’m coming from. I really appreciated hearing from Director Dixon, so thanks so much.
Mayor Gina-Louise Sciarra: Thanks. Looks like Member Foster-Cannon is next.
Karen Foster-Cannon: Great, thanks. It’s late, so I’m going to go for as brief as I can. This is something I definitely have heard people bringing up for a few years. And you and I – I think it may have been winter or early spring, that we talked about it as well. And Member Serafy-Cox, to your point, it was a while ago that I was looking into it and to see what other communities were doing. But I was seeing more examples of special education stabilization funds and I was not seeing general education stabilization. And I’m no—I’m not an expert on this—but that’s what I was coming up with, and it makes sense, as Director Dixon spoke about, you know, a one-time unanticipated special education expense can be quite extraordinary. And we do morally, ethically, educationally want to be able to cover those expenses without impacting currently providing services. So this isn’t something that would be, you know, kind of used on the regular. This would be really for unanticipated extraordinary expenses.
And I’m really glad to see it. I think that having an opportunity to, you know, be able to cover those expenses is really significant and really important. And I definitely will be supporting the establishment of the fund. I, also, you know, will take a moment to urge the city council to vote to seed the fund because otherwise, it’s jeopardizing some significant funding for the schools that could be in place for July 1.
And then a question I have, actually—and maybe this is just more of a thought; I don’t know that we need to answer this this red-hot minute—but something I’ve been thinking about is a vote for an expenditure from a special education stabilization fund would be coming from two bodies. It would be coming from school committee as well as city council. And it’s actually, for me, more about protecting privacy if we are voting to use funding from the stabilization fund, it’s—we’re potentially looking at two public meetings. So I’m curious if, you know, yet, or maybe this is the conversation we have before we use the fund, how we have that discussion in a way that we’re not, you know, I don’t know if that’s executive session or what our mechanisms may be to be able to have these conversations without, um, exposing somebody’s, you know, disability or need and as well as what that costs the district, because that’s—that’s really not healthy for anyone.
Mayor Gina-Louise Sciarra: First, I was remiss. I think I noted this at city council and I didn’t note this today, but I want to thank you, Member Foster-Cannon, when you were city councilor – someone who brought this idea forward. I’m so sorry that I didn’t credit you for that. I know you weren’t fishing, but, thank you for reminding me of that. I’m curious if Josh has any insight on how to protect, um, that information. But it’s something that I remember having a discussion about, how we would do it and whether we would just speak in very, very general terms. And then if further information was needed, then we’d have to see if it would qualify for executive session or we would provide information, again without divulging any identities, to counselors or school committee members who had questions.
Josh Dickson: So what I would say is that, typically—this is true for budget transfers as well— that typically I speak in very general terms and I always sort of give the disclaimer around that I can’t provide a lot of information. So it would be something along the lines of, that our projected tuition costs have been increased by this amount of money, and currently we’re only able to cover this amount with the current appropriation. And so we’re seeking, you know, a one-time, etc., etc., of however much we anticipate, and that would be sort of the extent of what we would provide. So that way it would protect the individual students’ privacy. And, of course, the superintendent and business manager would have more information, but in terms of sort of a public forum, that would be about the extent.
And I guess the other thing that I would say, which I think I’ve talked about before, originally when I did the presentation on the stabilization fund, but I do think it’s important, just to sort of highlight again that it would be a cost that we would budget the following fiscal year. And so the only benefit of the stabilization fund is it doesn’t impact this current year. And so, for example, if we had a student move in, we’d have to sort of forward-think for FY26 around how we would fund that on a regular basis. But it would prevent any shifts in current staffing for FY25. And so that is, I think, the safety net aspect of that can be helpful, but it certainly wouldn’t be something, where we would want to be pulling the same amount of money on an ongoing basis because then we would end up in a really similar to what Member Serafy-Cox said that a sort of mini fiscal cliff that we’d be creating for ourselves. And that would not be the right direction to move in.
Kerry LaBounty: We’ve heard two Student Services Directors say that this is something valuable. It’s an important thing to add some safety to the district. So it seems to make a lot of sense to me. And I know we’re not, we’re not voting on the idea of the establishment, but I did just have a question about the amount of the seeding. Was that particular number chosen because the money will then bear interest, or was there another reason? I was just wondering about why those particular dollars.
Video Time Stamp: 4:16:21
Mayor Gina-Louise Sciarra: Sure, yes, so that—let me find where the wording is, hold on. Here it is. Under the statute, the balance in the fund cannot exceed 2% of annual actual net school spending of the district. So this amount is, would be enough to seed it to a pretty— not to the ceiling, but enough so that it could grow interest over that year and not lose that interest, which would then have to go into the general fund. And it would be able to have . . . to do the appropriation for the next year and be able to have gain and any tailings and have the appropriation for FY26 of the Medicaid reimbursement from FY24 go into it.
Gwen Agna: Yeah, I’d just like to speak from two perspectives. One is as a former building principal, and I relate to what Josh said, that the cause—the disruption that’s caused and the shifting and the reallocating and moving staff around and basically the high anxiety that buildings experience when a student requires, uh, that kind of out-of-district or a large amount. And I think for me as a former building principal, it was ethically really difficult because we were in a position of not wanting students to move in and sort of hedging whether students would move in and what we were going to do if they did. And I think this will really relieve a lot of the stress on the buildings as far as how they can allocate staff and support students and—or think about cost centers and how much money they might have to spend in supporting students who need some extra stuff.
And the other thing was, I did check with Member Ghazy, who is away, and she is a grandmother and also a mother of children who have had special needs. She is also the liaison to the SPED PAC, and I said, “What is your thinking?” She right away said that she would recommend that we have a fund like this. And also, I did check in with a couple of members of the SPED PAC as well, and I think for them it meant that they wouldn’t have that sort of stigma on them in that the system is valuing their children and not seeing them as a burden on the system. And so they were very much in favor of it. One of the people said that she understood how challenging that might be for those of us who worry about money and were in a situation about that. But I think the concept for that person was absolutely we need to have something like this. So I felt really, affirmed by those conversations as well as my own thinking about what this could do for the building principals working with the SPED director and how to support students and not decimate cost centers but also provide really a good opportunity or option for those students who have these great needs. So I’m definitely in support of this.
Margaret Miller: I have sort of a question for Director Dickson, but also a question about whether this stabilization fund would also assist with things that occur late in a school year. So if it’s for the following year, what if something happens late in the year? So my question for Director Dickson is: Could you tell all of us what’s one of the most expensive out-of-district placements you’ve had to deal with?
Josh Dickson: So, locally, the most expensive out-of-district placement we currently have students placed in is the May Center in West Springfield.
Margaret Miller: Okay, and the total of that is?
Josh Dickson: About $126,000, somewhere in the $126,000 to $130,000 range, not including transportation.
Margaret Miller: So, as again, as an out-of-district therapist and psychologist, I’m fully aware of out-of-district placements that, uh, were at quite a distance from Northampton that would require not only transportation but tuition or whatever you call it for the cost of those out-of-district placements. And I could see this happening late in the school year or something unexpected. It’s—that’s very expensive. That costs quite a lot of money, and I think that also to protect the reputation of the district. I have heard of out-of-district people hearing things like “Northampton doesn’t fund all of their special needs costs, and some of it is out-of-district placement.” So, I just think it’s really important to have a fund like this to take care of those kids that need something very costly that we can’t provide.
Mayor Gina-Louise Sciarra: Anyone who hasn’t spoken?
Michael Stein: Thanks. Just a couple of points. So if my math’s correct, 2% of our net school spending this past year would be $893,912…760, so we are talking about initially seeding this with almost the max, and to go from nothing to the max in a year when we are actually losing special education and intervention services seems like a nice-to-have that we can’t afford.
I’m a big fan of this type of fund. I think it makes a lot of sense. I just don’t see how we can justify tying up this much cash when we could address other special education needs with it in the short term for students that we have right now. And to me, that’s what it really comes down to.
The other issue I have with this is really this recurring part. So I’m not actually sure what happens with this $200,000. Are we able to budget an additional $200,000 of personnel to keep a . . . an interventionist or a para or whatever? Or do we have to wait until we get the money, and then what happens? So, like, part of my question is how do we— we’re using it for unbudgeted costs, but if we know we’re getting it, why aren’t we budgeting it to keep staff? And if we are budgeting it to keep staff, then it’s not unbudgeted costs because we’re quite literally budgeting for it.
So it’s this, like, bizarre cycle here. And then just practically speaking, it’s a lot of work to just get money we could just have in the operating budget. It’s a lot of meeting time and a lot of creation of warrants and privacy concerns and everything else that seems unnecessary. Um, because it’s not recurring going into the fund; it’s just being passed through the fund as operating money.
So if you’re going to give us $200,000 a year towards our special education expenses—not towards unbudgeted – actually unbudgeted or unexpected—then why are we doing it this way? Because you’ll just have a $600,000 balance, and then anytime you draw it down, there’s less money and less money and less money. It doesn’t grow except for some small interest. So to me, I don’t understand the structure. Like, I could see if it was “we’re going to seed it with some percentage of what we on average have for unexpected costs” and then say “we’re going to put a quarter of the Medicaid spending into that account every year and grow the balance” or some other mechanism. But, like, to use it as a pass-through for operating, I just don’t— I don’t get it because nothing is going to grow in that fund without additional appropriations to it. Right?
Mayor Gina-Louise Sciarra: So every year, the previous year’s Medicaid reimbursement will be added to the fund, and then that’s what would come out. So it will also grow by interest.
Michael Stein: Right but what you’re saying is you’re just going to get that money—not you’re going to only get it if you have unbudgeted and unanticipated costs that you’re going to bill for.
Mayor Gina-Louise Sciarra: It would be built into the budget. So the school committee—
Michael Stein: It’s budgeted, the budget—it’s budgeted. It’s not unbudgeted, so you’re going to spend it all. Right? Like, I can’t be the only one that sees it.
Mayor Gina-Louise Sciarra: We’ve been told that we can add this as an annual appropriation for unbudgeted costs that the school district will have for special education costs. And then additional appropriations can happen during the year
Michael Stein: And then you’ll give it to us for budgeted costs?
Mayor Gina-Louise Sciarra: It will be the school committee that will vote on it, and then it will be voted on by the city council.
Michael Stein: Right so it will be for budgeted costs. So the question still is: Can we use $200,000 to keep more staff, or is the plan to already use that $200,000 to keep more staff? What is happening with the $200,000 that we’re being asked to say we want to appropriate?
Mayor Gina-Louise Sciarra: It’s been built into—yes . . .
Michael Stein: So it’s budgeted.
Dr. Portia Bonner: We — at the presentation that was on Monday – we built that into the 8% budget to help bring back staff.
Michael Stein: So how is it unbudgeted?
Gwen Agna: We have to vote to extend—sorry to interrupt, but that’s our rules, right? I make a motion that we extend our meeting until—there’s a lot left. Midnight.
Michael Stein: Second.
Mayor Gina-Louise Sciarra: Motion made by Member Agna, seconded by Member Stein. Any discussion on the suspension of rules? I assume none of these hands are for suspension of rules.
(roll call to extend meeting time)
Michael Stein: The point I’m at with the question is: If we’re budgeting this money and then we’re saying it’s unbudgeted, I don’t understand how we reconcile those two things. And then the other point is, if you’re always going to budget the money that’s going into this, it will never grow, especially if you take anything out. So it—maybe it gets, I don’t know, if we’re lucky, and it keeps getting 5% interest or something. You take out $50,000 once, and you’re evaporating all that. Like, I don’t understand how we’re going to use it and then what’s going to distinguish when we do a transfer internally versus when we go to this fund. I’m just having a real hard part with this $200,000 pass-through, and it seems like a complete pain versus just adding that to the budget . . . we’re already budgeting with the money in mind, so why make us have two special meetings or add it to meetings where we’re going to—are we going to get warrants that say we’re going to pay for these three positions that we’ve budgeted with this money, and we pass them and then the city council passes them? Like, I don’t understand procedurally how that works.
Mayor Gina-Louise Sciarra: Bobby, are you— is your hand raised too? — can you make Bobby— um, I got it, got it.
Bobby Jones: Yeah, I just— to that point, Member Stein, I just want to say that it’s much like the circuit breaker money that the Medicaid money comes in each year . . . and so we would know what we could have to use. So it’s not like you’re — I’m not even sure if I’m going to make much sense here – but you’re using Medicaid money. Many schools don’t realize the benefit of that, even though the schools do the work for it. The cities and towns get to take it as part of the revenue stream. So this is a revenue stream that the city, I believe, is affording us to be used much like the circuit breaker so that we have an annual reliable cost that we can use.
Michael Stein: Right, so I hear what you’re saying, but to push your analogy further, we don’t create a fund to pass the circuit breaker through. We just build it into our budget based on what we know we’re getting as a reimbursement from the previous year. So if we’re going to treat it the same way, we would just say now we’re going to dedicate that money to your budget, and you just build it in and bill against it. You wouldn’t pass it through a fund. So,
Bobbie Jones: right, But I think the difference is that—well, and I suppose the circuit breaker is the same thing. It’s dedicated to special education.
Michael Stein: Right, it’s the same thing. So, and I still don’t understand why the city could say we give you $30 million a year or whatever, $200,000 of that’s Medicaid. It’s not as – if it’s a pot of money right in the general fund that you get the reimbursement from. It’s just like we’re picking it out to say this is how it’s going to go. The circuit breaker, we get it—it’s tied to the district so it comes in in a specific way. But like to me, it’s like why are we going to put ourselves through this administrative hassle? Like you’ve just given us the perfect example. Just add it to the operating budget, treat it like the circuit breaker, and just budget for it every year. And that’s on top of whatever the appropriation is You know,
Bobbie Jones: except for the only thing—in my past experience is that the towns or cities or whomever, regional districts—you do not have to give that money. That is for the city to realize the revenue.
Mayor Gina-Louise Sciarra: This is revenue that now would be directed towards the schools, and it has the additional benefit that you’d be able to draw funds mid-year at any time during the year for other expenses.
Michael Stein: But the seeding money is not coming from Medicaid. The money you’d be drawing mid-year would be just from free cash.
Mayor Gina-Louise Sciarra: Right, and then it would grow by interest and also tailings, whatever tailings are getting turned back to the city, which are, they vary. Most of the schools keep most of their tailings, but there’s some amount of tailings.
Michael Stein: But you could do all that without passing through the budgeted money from the Medicaid reimbursement.
Mayor Gina-Louise Sciarra: We wouldn’t be able to do a mid-year appropriation.
Michael Stein: From the free cash you can, because you’re getting the money right away in July. That you’re saying . . .
Mayor Gina-Louise Sciarra: Free cash is frozen from July 1st until November.
Michael Stein: But we’re going to get our appropriation; we can carry that cost until November and then ask for the reimbursement. You know, we have enough money to cover $100,000 or whatever for four or five months. It’s not like it’s a problem. You have enough working capital to do that at the school side. I just—I have a really hard time understanding why we’re going the Medicare route with this and not treat it like – the city could just say “we’re going to give you this Medicaid money; we’ve decided we’re not going to hold on to it and keep it; you can have it, and you can budget for it in exactly the same way you budget your reimbursement for circuit breaker,” and then we just add it to the budget. And then you can put whatever you want into the stabilization fund and you can draw it down as appropriate because we can’t access that money for six months in either case because you’ve already budgeted the $200,000.
Mayor Gina-Louise Sciarra: So, the stabilization fund will be seeded with that money, and it’ll be available. It’ll no longer be free cash; it will be appropriated to the stabilization fund. You can access it at any time.
Michael Stein: Okay, so that—yeah, so what I’m saying is even if you don’t do the Medicaid piece, that’s still possible.
Mayor Gina-Louise Sciarra: Not if it’s free cash.
Michael Stein: Right but if we seed the fund with that money, then it can be used for unexpected and unbudgeted expenses. You just take the whole Medicaid situation out of it because it’s unrelated. It’s just budgeted costs.
Mayor Gina-Louise Sciarra: So, free cash changes every year. It’s not a stable recurring amount of money. This is something that we actually learned here last year when we tried to budget $600,000 of it, and it came back as like $200,000. So, that is an ever-changing cost. So, this would create a fund that would provide a stable amount that would be in there, that would, you could take out the same amount that goes in and would provide that sort of stability for the schools.
Michael Stein: I’ll try one more time. If you set up a fund that’s supposed to be for unbudgeted, unexpected costs and then seed it with recurring money, that is just budgeted money, you don’t have access to additional funds on top of what the free cash appropriation was, and interest and tailings to use for any other purpose. So it’s not an ongoing—it would be different if you said we’re going to seed this with Medicaid reimbursement up until the point of 2% net school spending, and we’re going to top it up every year. Yes, that would be a recurring model to have a topped-up special education stabilization fund.
But if you’re just going to use that Medicare reimbursement for budgeted operational costs, that’s not money you actually have to pay for unanticipated, unbudgeted expenses. All you have is the initial free cash that was put into the account, any residual interest, and any tailings that are added, and you have that regardless if you pass the Medicaid money through it.
So it’s easier if you just give the Medicaid money to the operation budget that it’s already going to be budgeted for, then have the whole thing run through a fund that’s supposed to be for other purposes. There’s nothing that’s popping it up every year because you’re just budgeting that $200,000.
Mayor Gina-Louise Sciarra: So the tailings and the interest will be added every year,
Michael Stein: Right, and you can draw from that, but you don’t have to put the Medicaid through it. because what does that do for the fund?
Mayor Gina-Louise Sciarra: That’s your—thank you for sharing your opinion on this.
Michael Stein: You’re welcome.
Karen Foster- Cannon: Yeah, that got fairly obfuscated in the conversation, but what I’m seeing here is a creative approach to balancing both our present needs and the long-term fiscal stability that we need in order to sustain the schools. And so, yeah, it would be great if we had access to all of that money right now because we are facing a very painful situation, but if we use it all right now, we’re going to be facing the same painful and actually even more painful situation next year. So it’s a creative solution, a creative budgeting solution, and we’ve been talking in this body about the need to do something, because we have to do something so that our schools have some long-term fiscal stability. So that’s what we’re talking about, and we’re talking about a special education stability fund that can help to provide one small piece of this puzzle, and I applaud the creative solution to it. And actually, I raised my hand a while ago because I wanted to go ahead and move approval.
Mayor Gina-Louise Sciarra: Motion’s been made by Member Foster Canon.
Gwen Agna: Second.
Mayor Gina-Louise Sciarra: Any discussion?
Emily Serafy-Cox: Yeah . . . I support the establishment of this fund. I had, I think . . . three, four years ago, emailed Josh Dixon about it—maybe it wasn’t three or four years ago, but I saw it and I immediately thought of us. So I absolutely support the fund. I think that the piece about annual — taking money out of the fund annually for the budget — is too confusing for me right now, so I’m wondering if we can take that part out of the motion and, and have it be just the . . . the unanticipated funds and not have the expectation of taking money out of it for the budget every year because that . . . that piece is, it’s just . . . I don’t see any information in the documents we were given about how, what, guidelines there are about what that money can be used for on an annual basis, that sort of thing. So, I just need a lot more information about that piece of it. Establishing the fund itself I’m good with, but I’m wondering if — was it Member Agna that had made the motion — if she would consider a friendly amendment to consider the annual appropriation piece later.
Video Time Stamp: 4:40:20
Michael Stein – I don’t know if that is possible.
Gwen Agna – I don’t. I think that complicates it as far as going to city council as well. So, I’m feeling a little stuck on whether that’s something I can accept right now because I think it might make it more difficult to put this forward. And I agree with Member Foster Canon that this is something that we’ve been hoping to do to really provide some stable, um, funding for our schools So I guess I have to say No.
Michael Stein: Sorry, just a point of information. The motion is just for H, right? So H and I are separate?
Mayor Gina-Louise Sciarra: There would be—there should be two motions. There should be one to establish the fund and then one to vote to appropriate the $200,000.
Michael Stein: I just—I didn’t know if that answered Member Serafy-Cox’s objection or not.
Emily Serafy-Cox: Well, it’s my understanding that we cannot move to appropriate because there’s no money in the fund to begin with. So, the second—so it’s only one motion – because the second motion is impossible.
Gwen Agna: So the one motion is still valid. It is to establish
Mayor Gina-Louise Sciarra: So you’re—you’ve moved to—hold on, there’s language for—let’s see. The language . . . I had it here, just a second . . . to accept the — Chapter 40, Section 13, Mass General Laws, and then, hereby authorizes the creation of a special purpose stabilization fund called the Northampton Public Schools Special Education Stabilization Fund.
Video Time Stamp: 4:41:54
Gwen Agna: It is in my packet. It’s on my phone too, and I was just trying to find it. Yes, okay . . . I don’t know that I said the whole thing. So, the motion is to accept Chapter 40. I move that the school committee accept Chapter 40, Section 13, of the Mass General Laws and, pursuant to the statute, vote to establish the creation of a special purpose stabilization fund called the Northampton Public Schools Special Education Stabilization Fund, with funding and spending appropriations to be made per the following guidelines laid out here. Do I need to read all of those, . . . or can we just — they were in the packet.
Okay, policy guidelines: Annual transfers into the NPS special education stabilization fund will be funded by the amount of the prior year’s Medicaid reimbursement received by the city and any turnbacks from the NPS to the city through an order to the Northampton City Council filed by the Mayor. Annual expenditures will be no more than the prior year’s Medicaid reimbursement amount. Any additional expenditure must be unanticipated and extraordinary and in an amount that, added to the annual appropriation, will not exceed $350,000 in one fiscal year. Expenditures must be voted by the School Committee, Northampton School Committee, and Northampton City Council as recommended by the mayor. If the balance in the NPS special education stabilization fund breaches the statutory cap of 2% of NSS, the Medicaid reimbursement or turnbacks from NPS above the maximum will remain in the general fund. per the statute all interest earned on the balance in the stabilization fund remains with the stabilization fund.
Mayor Gina-Louise Sciarra: Did you say, um, this also has to be . . . pursuant . . . okay, sorry.
Gwen Agna: That’s one motion. That was my motion.
Aline Davis: Can I say one really short thing?
Mayor Gina-Louise Sciarra: Sure.
Aline Davis: I’m particularly moved by, I guess, three things. One is we’re doing something, and it’s creative, and it seems smart to me. And, in addition, if the SEPAC families and Director Dickson — these are people that I see as experts on stuff — see it as something helpful and important, then that’s compelling to me. So, I certainly support.
Mayor Gina-Louise Sciarra: Okay, last comments.
Michael Stein. I just want to point out that the conversation, at least on the SEPAC list serve, has been pretty diverse, and a lot of the members are expressing the desire for the money that would be seeded into this to be used to serve current students and current needs.
Gwen Agna: Yep, there are some. I said it’s not everybody.
Michael Stein: So, there’s a diversity of opinion on it.
Gwen Agna: Right, and they didn’t take a vote to endorse it or anything. It was just people I spoke to.
Mayor Gina-Louise Sciarra: Okay, any further discussion? Roll call, please.
Member Serafy-Cox —No.
Member Stein—No.
Member Miller—Yes.
Member LaBounty—Yes.
Member Agna—Yes.
Member Davis—Yes.
Mayor Sciarra—Yes.
Member Foster-Cannon—Yes.