Coto concedes limited school budget knowledge

Aug. 24, 2013 @ 05:44 PM

County Manager Cindy Coto took the witness stand on Friday for the fifth day during the trial between Union County and Union County Public Schools.

Under questioning by UCPS attorney Richard Schwartz, Coto gave details on the county’s funding formula for school operations and its school capital improvement plan.

County officials touted the funding formula as a “collaborative” effort between both parties to better serve residents. But Schwartz argued that it was an insufficient funding formula the county imposed on the school district without its input or consent.

Instead of improving the budget process, the county gave little to no consideration to school budget needs, Schwartz said.

“The funding formula was adopted and in place before the commissioners received the budget listing the school system’s needs. Is that correct?” he asked.

“Yes sir,” Coto said after a long pause.

Schwartz noted that the adopted formula was unchanged from the amount

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UCPS Board of Education Chairman Richard Yercheck said was insufficient during a Feb. 15 meeting between county and school administrators and chairmen of both boards.

County leaders urged UCPS officials to “give-and-take” early in the recession. In Fiscal Year 2011-12, the county gave UCPS no capital outlay funds because of a projected defecit. But at the end of the fiscal year, the county collected an additional $15 million in revenue. Schwartz asked Coto if the county was obligated to give any to UCPS.

No, she replied.

In 2012-2013, the county gave UCPS $1.6 million to keep teaching assistants. But when the state later provided the same amount to UCPS for TAs, the schools returned the county’s $1.6 million. Coto agreed with Schwartz’s statement that UCPS was not legally obligated to give the money back to the county.

“They did anyway because that was part of the deal, wasn’t it?” he asked.

“It’s what they agreed to, yes,” she said.

He asked Coto about her knowledge of specific language used in state statues about school funding. He asked if she investigated how UCPS developed its budget. He quizzed her on whether the UCPS budget message submitted the county was in accordance with the state law’s requirement of a concise explanation of educational goals to justify funding increases.

In each case, Coto responded that she had limited knowledge of how school funding worked overall, and little more about UCPS funding specifically. Schwartz noted her testimony the day before when she stated UCPS did not use a zero-based budget. She said it appeared to her that school officials added amounts onto last year’s budget and handed it off to the county. Then she said she had no information on how UCPS developed its budget.

“So basically, you don’t know very much at all about how the school system goes about developing its budget and what items it examines or what goes into developing this proposal, do you?” Schwartz said.

“I have limited knowledge, yes,” she said.

“So you have no basis on which to suggest that they just began with last year’s and added to it, do you?” he said.

“As I stated from this exhibit, it appears that their appropriations started with what we gave them last year and added to it. I believe that’s what I stated,” Coto said.

He returned to her Thursday testimony to Union County Attorney Ligon Bundy’s questions that only decisions reached by vote of an entire board was binding. Schwartz pointed out that most of the funding formula and capital discussion was done during a Feb. 15 meeting between a few officials from both sides. Yercheck, school board member Christina Helms and commissioners Chairman Jerry Simpson were the only elected officials present. But county officials defended its funding position based mainly on what happened during that meeting. And because it was not an open meeting, no minutes were kept and the public was not allowed in, so not official record of what was said exists.  

Thursday, Coto detailed how this year’s county budget built department needs from the ground up instead of last year’s funding. She encouraged departments funded by but not immediately overseen by her office to do the same. To her, it appeared UCPS tacked additional funding onto last year’s budget.

Schwartz asked if she was aware that state law has rules governing how school districts develop budgets, not the county. “And it has nothing to do whatsoever to do with your zero-based budgeting method that applied to the county this year, does it?” he said.

“It does not,” she said.

He asked if it was true that her testimony and evidence about what process the county went through to develop its budget this year had no relevance to the school system’s budget process.

“I would hope that the board of education would go through a process to look at their expenditures, to look at their needs as part of their process, similar to what the county does — I’m not saying a zero-based budget — before they submit a budget to the county commissioners,” Coto said.

The cost of employee benefits increased for all state employees in 2012-2013. Likewise, benefits to employees working jobs paid for through county money also saw their benefit costs increase. The state did not mandate the costs be made up by the county, Coto said. She did not know how many UCPS employees were paid through county funds, she said.

“So what you’re saying is, the statutory provision we just looked at...that says the local current expense fund shall include local funds sufficient when added to state funds to provide for the operating expenses of the school system, you’re suggesting then that the county says if it’s a state mandate, we don’t have to cover it,” Schwartz said.  

“That’s not what I’m suggesting, sir,” Coto said.

Rephrasing the question, Schwartz asked if it was fair for two employees doing the same job get the same pay? Or if the employee whose job is funded through the county be paid less than the state-funded employee because the county did not want to pay more.

Coto said the state mandates equal pay, but she did not interpret the mandate to mean the money had to come from Union County.

Schwatz’s stated that Ellis in FY 2012-2013 asked Coto for the approximately $333,784 to give small raises to county-funded employees out of the $1.6 million originally intended for TAs but given back to the county. Coto denied the request.

“And that was all part of that give-and-take, compromise and working together, is that correct?”

“I don’t know that...I have no response to that statement, sir,” Coto said.

Earlier she testified that county officials heard little to no feedback from the school board about the funding formula until May. Schwartz argued she likely knew about the many communications between commissioners and school board members.

Under questioning, she said Yercheck stated the penny amount specified by the county-developed funding formula was too low at the Feb. 15 meeting. It was the first time the completed formula was shown to school officials in writing, she said. And even at that, the formula was not the formal formula approved by commissioners in March, but a list of discussion points.

Her earlier testimony that several other counties had school funding formulas left out the fact that those formulas were developed and adopted by the county and school system together.

“Yes sir, which is also the approach we attempted to reach here,” Coto said.

But Schwartz said she testified Thursday that the county never asked the school board to adopt the formula. She said the school board discussed but never made any formal response to the formula or request that the formula be amended.

“Ms. Coto, from the very first time the funding formula was mentioned, the chairman of board of education said that it wouldn’t work, isn’t that true?” Schwartz said.

“That is what he said, but as we talked about earlier, neither he nor Chairman Simpson combined act or speak for their entire boards,” Coto said.

“Well, you can’t have it both ways,” Schwartz said. Informal negotiations cannot be binding sometimes and not later, he said.

The trail will continue Wednesday after 2 p.m. in Union County Superior Court.