Persistence Gets $354,000 Of Owed Tuition

Springs board ‘looking to give money back’

    In Springs, the big takeaway is that if at first you don’t succeed, try, try again.
    Over the past few years, such unrelenting persistence has resulted in the Springs School receiving $3.9 million after discovering that the East Hampton School District had continually overcharged its feeder districts for the hundreds of students it sends there.
    At a March 27 budget session, the president of the school board, Kathee Burke Gonzalez, informed the audience that East Hampton had again overestimated last year’s high school tuition rates. As such, Springs was set to receive a $354,000 refund.
    In the last two years alone, the perennially cash-strapped district has received more than $800,000 in owed tuition money after being continually overcharged.
    At this time last year, had Springs known such a refund was forthcoming, the district might not have needed to slice $792,000 from its preliminary budget. For the 2013-14 school year, Ms. Burke Gonzalez announced that Springs plans to hold steady and does not foresee the need for any cuts.
    “Due diligence pays off,” she said. “We just didn’t want to see our school decimated, and we did everything we could to prevent it from happening.”
    Besides the need for cuts, she said, taxpayers had to be asked last year for “more of their hard-earned money,” which should not have been necessary. “We’re looking to give money back this year.”
    Compared with last year’s 2.97-percent increase in the tax levy, this year’s proposed increase is only .82 percent, after applying a fund balance of $934,000. Additionally, a projected lower rate would result in substantial savings. Springs residents whose houses are valued at $600,000 paid $165 per household last year; this year those householders are projected to pay just $107. Houses valued at $800,000 paid $220 last year; this year’s projected rate is $143.
    Ms. Burke Gonzalez began last week’s session by recapping the tuition arrangement between Springs and East Hampton.
    In Springs, tuition dollars are a particular worry. In next year’s $25.5 million projected budget, the school plans to spend $8.2 million, or about 35 percent of the total, on high school tuition.
    Since 2008, East Hampton has continually overcharged sending districts by relying on a calculation called the Seneca Falls formula, which Ms. Burke Gonzalez described as “antiquated and flawed.” All sending districts are given a yearly flat tuition rate, whether a student is a resident of Amagansett, Montauk, Springs, or elsewhere, but with 273 students, Springs is the largest sending district by a long shot.
    The dispute over tuition money between Springs and East Hampton dates to May 2007, when Raymond Gualtieri, then East Hampton Schools Superintendent, decided that rather than sending districts negotiating a yearly tuition rate, the Seneca Falls formula would be followed.
    That formula, which dates all the way back to 1949, uses a kindergarten- through-6th and 7th-through-12th-grade funding model to determine a district’s costs. Confusion arises when schools are not configured that way and when a teacher’s duties are split between, for example, East Hampton Middle School and East Hampton High School.  
    To look into the issue, Springs hired Charles Winters, a retired school business official, to examine its agreement with East Hampton. In all of New York State, Mr. Winters estimated that perhaps 30 districts send large numbers of students to another district on a tuition basis.
    The Seneca formula dictates that districts pro-rate costs based on teacher salaries, split into either kindergarten through 6th or 7th through 12th grades.
    “All I did was to say, ‘I want to see the names of everybody on the payroll charged to secondary and I want to see your schedules,’ ” said Mr. Winters. “It’s not rocket science. It didn’t even take that long. Maybe five to six hours of nasty work.”
    Calling the Seneca formula volatile, he said he was puzzled by its continued use, though he acknowledged that a state-sanctioned substitute had failed to materialize.
     “It’s too unstable a formula for being a major component of a district’s financing, for either the paying or the receiving districts,” said Mr. Winters. For his services, he billed Springs School $75 an hour. His last two invoices, covering the last two years and resulting in a saving to Springs of $800,000, totaled $1,725.
    “The Seneca Falls formula is imperfect, and our use of it hasn’t been as perfect as we would like,” said the East Hampton School Board’s president, George Aman. “It’s bothersome, but we have to keep working at it until we can get it as accurate as we can.”
    On March 22, after a protracted three-month back-and-forth, East Hampton finally e-mailed the sending districts to say the tuition rate for the 2013-14 year will be reduced by $1,074 per student, to $25,789.
    Going forward, the Springs School plans to conduct annual audits of East Hampton’s figures. When its tuition agreement with East Hampton expires on June 30, 2015, some in Springs hope the school might abandon the exclusive contract, opening the door for students to attend either Bridgehampton High School or Sag Harbor’s Pierson High School, where yearly tuition rates are cheaper.
    Springs Superintendent Dominic Mucci didn’t mince words. “One of the things we need to keep in mind is that we don’t even think about something called exclusivity,” he said. “They’re not the only game in town. There are other options when you have other players at the table. I would recommend we look as far and wide as we can.”
    A final budget session for the 2013-14 school year will be held at the school on April 17 at 6:30 p.m.