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School systems in Maryland are in the uncommon position of owning assets, but not the debt associated with those assets, as we have no borrowing power. We are fully fiscally dependent on the state and county governments to incur debt to fund capital projects. Accordingly, the School System carries no bond rating and has no debt policy.
Declining enrollments led the system to consolidate two high schools. In August 2007, Mountain Ridge High School was opened and is the first newly constructed high school in over 50 years in Allegany County. The final cost of the facility is estimated to be in excess of $40 million dollars.
The system is continuing in their $10 million fundraising effort to renovate and upgrade athletic fields at high school campuses. The system hopes to raise money with private donations and will offer naming rights of the facilities and parts of the facilities to encourage such donations.
Bridge To Excellence and the Master Plan
Beginning with fiscal year 2003, the State government enacted the Bridge to Excellence in Public Schools Act (the Act). The Act provides increased funding to all public schools. Increases were received in FY2003 through FY2007 under this Act with the largest increase scheduled for FY2008, as the initiative reaches full funding levels. Beginning with FY2004, the Act also unrestricted many of the funding components that were previously categorical restricted funds to provide flexibility in improving student performance. As long as Allegany County Schools have a declining enrollment, some of the additional state funds will be reduced.
The Master Plan for Allegany County Public Schools, required under the Act, provides a five-year action plan to guide the school system in preparing students to be contributing members of a democratic society. The plan directs the use of current and new State, Federal and local funds to eliminate achievement gaps among subgroups of students and to challenge each student to higher academic levels. The plan organizes and aligns research-based practices, instructional services, professional development and resource distribution to guide the Allegany County Public Schools. Budgets are now linked to Master Plan strategies.
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Bridge to Excellence and Highly Qualified Teachers
The state’s Bridge to Excellence in Public Schools and the Federal No Child Left Behind Acts established certain requirements for public school systems. These requirements include, but are not limited to: all students in core academic subjects are taught by “highly qualified” teachers, all students must reach proficiency levels on State assessments by 2014, all economically disadvantaged children must have access to a pre-kindergarten program, new certification and assessment requirements for paraprofessionals, and extensive tracking and reporting requirements. All of these requirements have significant potential cost impacts associated with them.
As a result of large funding increases from the State of Maryland, state revenues, as a percentage of the budget, have dramatically increased. Any changes in the state policies or procedures will significantly impact the system. The State of Maryland is currently facing a structural budget deficit. There are many proposals that are being discussed by the Governor and General Assembly that would limit Thornton funds which is where the system receives most of its funding, but fund the Geographical Cost of Education Index (GCEI). The system would not receive any funds under the GCEI component. This development could significantly impact future operations of the system and their ability to meet requirements in a timely manner.
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Work Force Status
The Board of Education has entered into a three year labor agreement with all bargaining units. July 1, 2008 will be the last increase as part of this three year contract. The teachers’ group will receive the largest increase which amounts to twenty percent over a three year period. The structure of the teachers’ salary scales was substantially revised to reflect a more attractive beginning salary and to recognize the value to the school system of the teachers’ holding master’s degrees. Approximately one half of teachers in the system have a master’s degree. This was done to retain and attract quality teachers. Allegany County ranks near the bottom in teacher salaries state wide because Allegany County is a rural county and higher salaries can be attained in the metropolitan Washington / Baltimore corridor. Nonetheless, we view teacher salaries as competitive for entering the profession as compared to other professions requiring a four year degree.
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Energy Conservation
Since the 2003 implementation of an energy management program, the system has achieved over $2.5 million in cost avoidance savings of which $885,232 was saved in FY07. This program continues to be successful with the volatility of energy prices. The system will continue to fund the energy manager position in order to achieve future savings in energy. The system also entered into a cooperative purchasing agreement for electricity in the last quarter of fiscal year 2007. As a result, additional cost savings for the remainder of the fiscal year were $67,023.
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Government Accounting Standards Board (GASB 45)
Beginning with fiscal year 2009, the system is required to adhere to the new standard issued by the Government Accounting Standards Board (GASB) for reporting other post employment benefits known as GASB 45. GASB 45 stipulates standards for the measurement, recognition, and display of OPEB expenses and related liabilities and assets, note disclosures and required supplementary information in the financial reports of state and local governmental employers. GASB 45 requires the measurement and disclosure of actuarial accrued liabilities and funded status. Under GASB 45 the system will not only be reporting other post-retirement benefit (OPEB) expenses, but the associated accrued financial obligations. Funding of the obligation is optional. The system will also be required to disclose the funded status of the benefits as of the most recent valuation and to present as Required Supplementary Information (RSI) multi-year trend information about funding progress.
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