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Rumor of $120-million surplus in Pasco schools is false

LAND O'LAKES — Late in the spring, with budget cuts looming, the United School Employees of Pasco launched a drive to protect workers' pay raises.

The association rejected a proposal to postpone annual "step" increases (a decision it later reversed) and instead offered ideas to find money for salaries. The suggestions included raising student fees, delaying costly new projects and scaling back staff training.

One idea quickly gained steam. The district had money in reserve, USEP leaders said, so why not use some of that "rainy day fund" to cover at least some of the $6-million required to pay all employees their annual increase based on years of service? Some other districts and state universities are doing it, they noted.

The reserve amount the union quoted was $120-million. And that number hasn't gone away, even as USEP officials acknowledge it is incorrect.

"I think that number came from us originally, not being clear on semantics," USEP lead negotiator Jim Ciadella said last week. "You make a statement and people run with it."

That's proven vexing to the School Board and administration, which have tried to clarify what they call "misinformation" about the $1.2-billion budget as the anger of many employees has risen to a boiling point.

Superintendent Heather Fiorentino sent a lengthy e-mail to all employees Friday, giving detailed explanations on budget-related questions her staff collected from comments made during meetings and from e-mails and letters sent to the district office.

She answered questions such as, "Why did we spend millions of dollars to purchase new reading textbooks when our former series was successful?" and, "How are surrounding counties able to give raises?"

In an interview, Fiorentino stressed that she has nothing to hide, and she's certainly not trying to keep money from employees.

"It's an election year," she observed.

Figure is way off

And one thing Fiorentino wants perfectly clear as she seeks a second term in office is that the district does not have $120-million just sitting around.

If such a fund were available to offset cuts and provide added pay, chief financial officer Olga Swinson said, "I would have done it by now."

Yet as recently as the district's Sept. 16 budget public hearing, a member of the teachers' bargaining team called upon the School Board "to dip into the $120-million reserve, of which $56-million is unrestricted."

In e-mails to Fiorentino, some employees referred to the district's "surplus of $121,000,000."

"This is misinformation," Fiorentino wrote in her e-mail to employees. "Pasco does NOT have a $121,000,000 surplus."

Ciadella concedes the fact.

"I believe that number was a number we had found that was like a total reserve," he said. "It's not like all of that money is available. … But there is, in our opinion, $25-million to $30-million that is truly discretionary and that is gaining interest."

That number is closer to reality.

In its latest report to state auditors, who are currently combing through the district's books, the district stated it had $60.9-million as a general operating fund balance at the end of fiscal 2008, on June 30. Of that amount, $27.7-million was not committed to any specific purpose or expense.

The teachers have proposed that the district's ability to maintain such a healthy fund balance should now pay off for employees.

"This is the time to use the rainy day fund," Ciadella said.

Money tied to projects

If the administration says it doesn't want to put one-time revenue sources to repeating expenses (as officials have said), then perhaps the money could go toward one-time bonuses, he suggested.

And if the administration states it needs to keep a fund balance of at least 5 percent to maintain a good credit rating (as it has), then perhaps money from reserves could represent just a small part of the district's commitment to better pay, he added.

"We're not asking them to be financially imprudent," Ciadella said.

In addition to the general fund reserves, the district also has reported another $352-million in its other account balances, with the vast majority earmarked for things such as future construction projects, pensions and debt service. That money generally cannot be transferred to pay employees.

In fact, just $1.8-million is available for spending. And that money, which comes from the district's exclusive soda sales contract with Pepsi, already is "helping to keep athletics alive," Fiorentino said.

These figures are in keeping with past fund balances held by the district. An independent audit found that the district had $33.7-million in unreserved general fund balance at the end of fiscal 2007.

Jeffrey S. Solochek can be reached at solochek@sptimes.com or (813) 909-4614. For more education news, visit the Gradebook at blogs.tampabay.com/schools.

Rumor of $120-million surplus in Pasco schools is false 09/28/08 [Last modified: Thursday, October 2, 2008 4:02pm]
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