Tuesday, November 12, 2013

Richmond Public Schools Budget: You Figure It Out


The maven is throwing in the towel! I have spent far too much time on this, both last spring and this fall, and it just doesn’t get any better. This whole problem was caused by the Virginia General Assembly. Why should I be the one who has to bail them out?

So I am going to put all my research out there and any of you readers is welcome to come up with a reasonable solution. For any of you who can do it, I will be glad to award my virtual “You’re Obviously a Better Lawyer than Me” medal, which you can wear or frame and hang over your desk.

What is this all about? It’s about what rules should the school board, the mayor and the city council follow in formulating the annual budget for Richmond Public Schools.

For those of you who are old-time maven fans you know that since 2008 I have been criticizing the Richmond School Board for preparing budgets each year that were not based on the needs of the school system but rather on the wishes of Richmond’s mayor and city council. I pointed out that all three players in the school budget game were either unaware of, or were choosing to ignore, the requirement of state law that school budgets be based on an “estimate of the amount of money deemed to be needed during the next fiscal year for the support of the public schools of the school division.” (Virginia Code section 22.1-92, my emphasis). I have pointed out that the way the school budget has been handled in Richmond over recent years has resulted in the City of Richmond providing a constantly lower percentage of its operating budget for schools each year, a percentage that is lower than that of other jurisdictions in Virginia.

But last spring, when I started looking at the controlling statutes again, I discovered that the school board, the mayor and the city council were looking at totally different provisions of law than the maven was. I was looking at Title 22.1 of the Virginia Code entitled “Education.” The board, mayor and council were looking at Chapter 6 of the Richmond City Charter, entitled Budget. Trust me, reader; these sets of law are significantly different.

State Law:

All of Title 22.1 of the Virginia Code, including Chapter 8 on Public School Funds, was enacted in furtherance of the General Assembly’s responsibility under Article VIII, Section 1, of the Virginia Constitution, which reads:
The General Assembly shall provide for a system of free public elementary and secondary schools for all children of school age throughout the Commonwealth, and shall seek to ensure that an educational program of high quality is established and continually maintained.


The General Assembly created school districts and school boards as entities of the state, rather than agencies of local governmental units. The provisions controlling school boards are contained in Title 22.1, chapter 5 of the Virginia Code. The General Assembly intended that school budgets and school funds be treated separately from the funding for local government. The laws governing school funding are contained in an entirely separate chapter of the code from those covering local government funding, which are contained in Title 15.2, chapter 25 of the Code.

Chapter 8 of Title 22.1 of the Virginia Code is entitled “Public School Funds.” The key provisions of that chapter with regard to annual school budgets are sections 92, 93 and 94. Section 22.1-92 reads:

A. It shall be the duty of each division superintendent to prepare, with the approval of the school board, and submit to the governing body or bodies appropriating funds for the school division, by [April 1] the estimate of the amount of money deemed to be needed during the next fiscal year for the support of the public schools of the school division. The estimate shall set up the amount of money deemed to be needed for each major classification prescribed by the Board of Education and such other headings or items as may be necessary.

*                      *                      *.

B. Before any school board gives final approval to its budget for submission to the governing body, the school board shall hold at least one public hearing to receive the views of citizens within the school division. A school board shall cause public notice to be given at least 10 days prior to any hearing by publication in a newspaper having a general circulation within the school division. . .

Section 22.1-93 provides:

Notwithstanding any other provision of law . . . the governing body of a municipality shall prepare and approve an annual budget for educational purposes by May fifteen or within thirty days of the receipt by the municipality of the estimates of state funds, whichever shall later occur. Upon approval, each local school division shall publish the approved annual budget, including the estimated required local match, on the division's website, and the document shall also be made available in hard copy as needed to citizens for inspection.

Section 22.1-94 states:

A governing body may make appropriations to a school board from the funds derived from local levies and from any other funds available, for operation, capital outlay and debt service in the public schools. . . .The appropriations may be made on the same periodic basis as the governing body makes appropriations to other departments and agencies.

Sections 92 and 93 were reenacted by the General Assembly as recently as 2011.

In sum, these provisions require:

1- That the Superintendent of Schools, with the approval of the school board, submit to the local governing body—in Richmond, this would be the City Council—no later than April 1 of each year an estimate of the amount of funds that will be necessary to operate the public schools in the upcoming year. This estimate shall use the classifications established by the state Board of Education. These classifications are (i) instruction, (ii) administration, attendance and health, (iii) pupil transportation, (iv) operation and maintenance, (v) school food services and other noninstructional operations, (vi) facilities, (vii) debt and fund transfers, (viii) technology, and (ix) contingency reserves. (Virginia Code section 22.1-115)

2- That before adopting its budget, the school board shall hold at least one public meeting and that it shall give ten days notice before that meeting.

3- That the local governing body—in Richmond, the City Council—shall prepare and approve an annual budget for educational purposes by May 15 (or within 30 days of receiving an estimate of state funds that the school district will receive in the following school year.)

4- That the local governing body may appropriate local funds to the school board (to supplement funds received from the state) for operation, capital outlay and debt service of the school district.

(The only strange requirement in this legislative scheme for public school budgeting is the second one. As indicated in the quote above, section 22.1-92(B) requires the school board to hold a public meeting before approving its budget, but the statute nowhere requires the school board to prepare a budget.)

City Charter:

In enacting the Richmond City Charter, the General Assembly appears to treat the school board as a special entity within the city government. Section 20.01 of the Charter provides:

The School Board shall consist of nine trustees [sic]. One trustee shall be elected from each of the nine Council districts and shall be a qualified voter of that district.

The time of election and terms of members of the School Board shall be the same as the time of election and terms of the members of the Council.

Trustees shall take office July 1 following their election.

Except as provided in this Charter the School Board shall have all the powers and duties relating to the management and control of the public schools of the City provided by the general laws of the Commonwealth. None of the provisions of this Charter shall be interpreted to refer to or include the School Board unless the intention so to do is expressly stated or is clearly apparent from the context.

The laws respecting the preparation and approval of budgets in the City of Richmond are contained in Chapter 6 of the Charter. Section 6.02 provides:

On a day to be fixed by the council, but in no case earlier than the second Monday of February or later than the seventh day of April in each year, the mayor shall submit to the council: (a) separate current expense budgets for the general operation of the city government, for the public schools and for each utility as defined in Chapter 13 of this charter; (b) a budget message; and (c) a capital budget.

Section 6.03 states:

It shall be the duty of the head of . . . each board or commission, including the school board . . . to provide, at such time as the mayor may prescribe, estimates of revenue and expenditure for that . . . board. . . for the ensuing fiscal year. Such estimates shall be submitted in a form as determined by the mayor. . . . The mayor shall . . . make such revisions in such estimates as he/she may deem proper, subject to the laws of the Commonwealth relating to obligatory expenditures for any purpose, except that in the case of the school board, he/she may recommend a revision only as permitted by § 22.1-94 of the Code of Virginia or any other provision of general law not in conflict with this charter.

Section 6.05 provides:

For any fund, the total of proposed expenditures shall not exceed the total of estimated income plus carried forward fund balance.

Section 6.09 provides:

A public hearing on the budget plan as a whole shall be held by the Council within the time and after the notice provided for hearings on ordinances by Section 4.10 of this Charter, except that the notice of such hearing shall be printed in a newspaper published or in general circulation in the City.

 Section 6.11 states:

Not later than the thirty-first day of May in each year the council shall adopt the budget, the appropriation ordinances and such ordinances providing for additional revenue as may be necessary to put the budget in balance.
And, section 6.14 provides:
It shall be the duty of the school board to submit its budget estimates to the mayor at the same time as other departments and in the form prescribed by the mayor. The mayor and council may take any action on the school budget permitted by § 22.1-94 of the Code of Virginia or any other provision of general law not in conflict with this charter. The school board shall before the beginning of the fiscal year file with the director of finance its budget as finally revised and its appropriations based thereon.

In sum, these provisions of the city charter provide:
1- That the School Board [section 6.14] (or the head of the School Board [section 603]) submits to the Mayor budget estimates [section 6.14] (or estimates of revenues and expenditures [section 6.3) in the form and at the time required by the Mayor.
2- That the total of proposed expenditures for any fund shall not exceed the estimated expected income plus any balance carried forward.

3- That the mayor may make changes in the school board estimates consistent with state law.
4- That, by a date specified by the City Council, the Mayor shall submit separate current expense budgets for the city government and for the public schools.
5- That the City Council holds a public hearing on the “budget plan.”
6- That the City Council shall adopt the budget and any ordinances necessary to balance it by the end of May.

Side by side:
Comparing the state and city provisions reveals several inconsistencies. Some of these inconsistencies only relate to the date things need to be done. The substantive ones are:
1- The state law requires the submission to the governing body of the local jurisdiction of an estimate of the needs of the school system. The city code has no such provision.
2- The state law requires the use of classifications established by the state Board of Education. The city code requires that budget statements be in the form specified by the mayor.
3- The state law provides that the school board’s budget be submitted directly to the governing body. The city code provides that the school board’s budget be submitted first to the mayor who may make changes before submitting it to the City Council.
4- The state law requires the governing body to prepare and approve an annual budget for educational purposes. The city charter requires the Mayor to submit to the City Council a separate budget for public schools. However, the charter indicates that the council is to adopt a single budget for the city including the public schools.
Both the Virginia Code provisions and the city charter provisions were enacted by the Virginia General Assembly. And yet, they are in conflict. So, what do we do about these conflicts?
When a court has to apply two statutes that appear on their surface to be contradictory, it relies on a “legal fiction.” That fiction assumes that in enacting new legislation the legislature is fully aware of all other laws it has ever enacted and intends the new legislation to be compatible with those laws. In other words, the law does not favor implied repeals. It is only when the court finds that it cannot give both statutes full effect that it relies on one of two principals of statutory interpretation:
1- Later in time prevails: The assumption is that the legislature intended its most recent pronouncement to be controlling;
2- Specific controls over general: The assumption is that the legislature intended its more specific pronouncement to be an exception to the general statute.
This approach, however, makes no sense in the current instance. Merely, choosing which of the conflicting statutes should control will not resolve the basic problem. Does the General Assembly want the Richmond School Board to operate as other school boards in the Commonwealth, that is, as an instrumentality of the state that also receives funding from the City of Richmond; or does the General Assembly want the school board (for budget formulation purposes) to be an entity of the City of Richmond that also receives funding from the Commonwealth?

So, the maven has to abdicate his responsibility on this issue. I strongly recommend that the Richmond School Board and/or the City Council and/or the Mayor take this issue back to the General Assembly for resolution. I also recommend that our local senators and delegates make sure this issue is resolved when the General Assembly reconvenes in 2014.

 

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