WHY MINUTEMAN MEMBER TOWN ASSESSMENTS ARE TOO COSTLY

WHY MINUTEMAN MEMBER TOWN ASSESSMENTS ARE TOO COSTLY

June 10, 2014

ABSTRACT

Simply, Minuteman’s annual Per Pupil Expenditure (PPE) is significantly higher than nearby vocational high schools with larger and smaller enrollments.  As a result, the underfunded tuition revenue “gap” or disparity between Minuteman’s Operational Per Pupil Expenditures, and the revenue Minuteman receives for each tuition student is 3 to 4 times greater than those for nearby vocational high schools. 

Member towns who have pledged their full faith and credit to support Minuteman’s annual budget are the payers of last resort.  All annual multi-million dollar tuition payment “gaps” or underfunded OPERATIONAL costs are paid for by all member towns through concealed and camouflaged over assessments.   These “gaps” are in fact hidden taxes used to subsidize an unnecessarily large tuition student enrollment.

At the same time, task force reports, administration analyses, and Regional Agreement changes either by omission or commission have been composed or proposed to support any new school with an enrollment greater than 500 students without school and school committee officials knowing which member towns would remain in the district, or which underfunded Non-Member towns have committed in writing to become district members without substantially increased subsidies.  All of these “studies” with predetermined conclusions collapse when tested against publicly reported enrollments and financial data.

The conclusions are that the Minuteman administration and school committee are constantly defending and justifying tuition subsidies and an inflated tuition student enrollment by referring to inaccurate, fallacious, and disingenuous Task Force and administration reports to justify an 800 student new school.  All the juggling and manipulating of stale budget numbers and arbitrary exclusion of millions of dollars in costs that benefit all students transparently are disingenuous diversions at best.

We can and must do better.  We cannot allow the superintendent and assistant superintendent for finance to ignore and brush aside uncomforting financial facts verified with public data as “misstatements” without their being required to present verifiable facts and data to support their claims.  $2.5 million to $2.7 million in annual subsidies for Non-Member towns sending tuition students to Minuteman is an unsustainable financial model that is setting the stage for skyrocketing assessments or the school’s subsequent inability to perform its primary mission.

DETAILS

DEPARTMENT OF ELEMENTARY AND SECONDARY EDUCATION (DESE) PER PUPIL EXPENDITURE REPORTS DISPARITIES

Minuteman has the highest vocational Per Pupil Expenditures in the Commonwealth of $26,245 in FY2013.  By virtue of Minuteman annual budget increases of ~$1.1 million for the last two years; the FY2015 PPE will conservatively grow to $28,500. This is based on LEVEL SERVICE budgets of $1.1 million in FY2014 plus $1.3 million in FY15 divided by 815 students equals an average PPE increase of $2,944.78 conservatively rounded down to $2,500.

In FY2015, Minuteman will receive on average $ 20,625 in tuition and fees for each tuition students.  $18,375 and $2,250 in FY2015 DESE mandated tuition and average Special Education fees, respectively.  In FY2017, the DESE tuition rate per Non-Member student will decrease to $15,000 in today’s dollars per current DESE written policy.

The "gap" between Minuteman’s FY2015 projected PPE of $28,500 and $20,625 in non-member town payments is a growing and worrisome unfunded problem of -$7,875 per Non-Member student based on Minuteman and DESE data and reports.  Neither the MSBA nor the DESE require Non-Member towns to share in any CAPITAL contributions.  Member towns as final payers subsidize Non-Member towns on an operational and capital basis for their 400 Non-Member tuition student accepted by the superintendent.  This is because there is no school committee policy on tuition enrollment numbers other than to point to the DESE Chapter 74 laws which point right back to a broken Minuteman school committee enrollment policy.

This per Non-Member tuition student “gap” will increase to $11,240 for each tuition student by FY2017 as decreased tuition rates reduce payments by an additional $3,365 to $15,000.  These numbers are real and have not, and cannot be disputed by the Minuteman administration and school committee officers (past and present) although they have made misleading and fallacious statements misrepresentations to the contrary without providing requested verified documentation or data to support their claims.  Since administration and school committee officer arguments have been proven to be fallacious, they have been floating a new tact.  They state that tuition payments reduce fixed costs in order to justify a 400 non-member tuition student enrollment that would require an 800 student school and $3 million in annual Non-Member subsidies. 

FIXED costs are not FOREVER costs and OPERATING costs are not meant to unjustifiably creep up.  Once Non-Member tuition enrollment is right-sized to reflect the revenue collected, all fixed and variable OPERATIONAL costs along with CAPITAL costs will be lowered and sustainable.   If you believe the administration and take their word that there is there is at least a $4,000 per tuition student “gap” (that supports the obvious -$7,875 “gap” as quantified above) which was memorialized in a letter to the DESE Commissioner based on stale and manipulated FY2012 budget data, then you need to read on.

WHY OTHER VOCATIONAL SCHOOLS DO NOT HAVE A SUBSIDY “GAP”

In contrast to Minuteman, nearby Assabet Valley and Nashoba Valley vocational high schools have significantly lower FY2013 PPE’s of $18,252 and $15,104, respectively (versus Minuteman’s $26,245 FY2013 PPE) while those schools sustain vibrant and meaningful vocational and special programs. 

The FY2013 Assabet Valley and Nashoba Valley tuition revenue collected from each of their Non-Member towns are $16,080 and $13,524, respectively, per tuition student (versus Minuteman’s rate of $18,375). 

By adding a conservative $2,000 average per Non-Member student Special Education services fee to tuition fees, Assabet Valley’s and Nashoba Valley’s total operating Non-Member revenues per tuition student are $18,080 and $15,524, respectively.

While Minuteman has a revenue gap of -$7,875 for each Non-Member student, Assabet Valley, has a relatively insignificant tuition “gap” of -$172 or a near non-existent tuition underfunding problem.

In the case of Nashoba Valley, they have a positive “gap” of +$420 for each Non-Member tuition student.  But Nashoba has a large Non-Member enrollment made up of CHOICE students sent to Nashoba by its MEMBER TOWNS where the revenue “gap” is wider than Minuteman’s.  Nashoba’ district member towns are fully aware of up-front and total subsidy costs ahead of time and make an informed decision to fund this enrollment because they take ownership and approve the costs. 

Assabet Valley with over 300 non-member tuition students, is not forcing their member towns to subsidize non-member towns (nor is Assabet forcing members to withdraw from the district if a member town votes to not participate in increased CAPITAL and OPERATIONAL Non-Member subsidies) as the Minuteman administration demands through proposed changes to the current Regional Agreement.

To go directly to the DESE Finance spreadsheet PPE information for Minuteman, Assabet Valley, and Nashoba Valley, click on the link below for supporting DESE data. http://www.doe.mass.edu/finance/statistics/ppx13.html

This is all to substantiate that a vocational or any secondary high school can sustain a realistic non-member tuition enrollment if the superintendent and school committee officers are financially responsible, reduce overall costs, keep PPE and tuition revenue at or below the break-even point; and the administration has a transparent and detailed dialogue with their member towns about underfunded non-member enrollments.

FAILING A MAJOR FINANCIAL TEST

The Marginal Cost Task Force fallacious claim that tuition payments reduce Minuteman member town assessments and reduce fixed costs.  These claims fails one simple test (as well as another listed below:

If a large tuition enrollment is really an extraordinary and cost reducing financial "investment" with payoffs that reduce assessments and fixed costs, then why not charge all MEMBER TOWNS as well as Non-Member towns in FY2015 the DESE $18,345 TUITION RATE and an average $2,400 SPED rate for a total of ~$20,800 times 833 students that yields maximum of $17,326,400 in budget revenue.

With a 47% Non-Member enrollment, Non-Member town contribution should total $8,143,408, but the FY2015 budget only has Non-Member towns contributing a total of $6,300,000 or an evident underfunding of $1,843,408 that questions the entire FY2015 Minuteman LEVEL SERVICE budget process which is again evidenced below. 

Then, with a 53% enrollment, the member town share would contribute the remainder or revenue of only $9,182,992 in FY2015.  But in FY2015, member town assessments totaled $10,380,925.  IN our test, this is a Member Town contribution loss of -$1,197,933.  Who but member towns are responsible for making up revenue losses other than through over assessment to “balance the books” in order to subsidize Non-Member towns sending tuition students to Minuteman.  This test just like the original FY2015 budget is not LEVEL SERVICE budgeting in any sense when tuition student enrollment has grown by 44% while member town student enrollment and teacher staffing have been flat over the last 5 years.

MARGINAL RESULTS AT BEST

The Marginal Cost Task Force's claims that tuition payments reduce assessments and fixed costs immediately collapses when compared to verifiable and complete facts and data.  It is impossible to justify cost reductions based on unvetted and arbitrary reductions in fixed costs or variable costs when member towns have to make up and pay for the -$1.8 million in underfunded tuitions payments obvious in the above test.

The “gap” is further verified when you review the original FY2015 $19.0 million budget.  The Fy2015 budget of $19.6 million is reduced by $600,000 to eliminate transportation revenue for bus services that only benefit member towns and to arrive at an apples-to-apples comparison.  Non-Member towns sending tuition student to Minuteman only contribute $6.3 million to the $19.0 million budget when they should be contribution their fair share of 47% or $8.9 million.  This is an underfunded tuition student revenue gap of $2.6 million that is in fact made up for and paid by member towns through the administrations’ use of  concealed and camouflaged over assessments.  No rational person can say tuition payments reduce assessments and fixed costs and then attempt to ignore $2.6 million in subsidies for Non-Member towns sending tuition students to Minuteman when they have already announced and memorialized there is a $4,000 per tuition student or a total $1.1 million tuition revenue loss in writing to the DESE Commissioner.

An 800 student school will provide a privileged few with the fulfillment of career objectives and personal agendas.  But member towns will have to pay for and live with their misstatements and fiscal recklessness.

These facts are undisputed by anyone other than those few that continually point to the fallacious Task Force tuition cost analysis and administration studies.  If someone adamantly and repeatedly says something is true and continues to repeat the fallacy even in the light of facts to the contrary is suspect at best.  But no one has received or reviewed the Marginal Task Force’s final tuition benefits report simply because a final report has never been distributed.  If the report had been distributed, it would have already been found to be fallacious as have the preliminary drafts and could not be rationally defended or justified in light of all the public facts and data to the contrary.

CONCLUSIONS

The administration and school committee officers are constantly defending and justifying tuition subsidies and an inflated tuition student enrollment by referring to an inaccurate, fallacious, and disingenuous Task Force and administration reports to justify an 800 student new school.  All the juggling and manipulating of stale budget numbers and arbitrary exclusion of millions of dollars in costs that benefit all students transparently are disingenuous misstatements at best.

We can and must do better.  $2.5 million to $2.7 million in annual subsidies for Non-Member towns sending tuition students to Minuteman must be stopped.  We must demand a sustainable financial model based on a known and verifiable district membership that can and will reduce costs and therefore assessments, or accept the school’s subsequent inability to perform its primary mission of educating our vocational students.

Sincerely

Dave Manjarrez

Sudbury