The East Baton Rouge Parish School Board on Thursday put off for a month voting on a proposed $441 million general operating budget after balking at accepting without more information a proposed $2 million grant from a maintenance company.
Aramark, the private company providing maintenance for school buildings and grounds, said the grant is a one-time offer.
If the board ultimately passes on the money, the projected shortfall for 2014-15 fiscal year increases from almost $20 million to $22 million. The board, however, ordered that Superintendent Bernard Taylor return at the board’s regular meeting July 17 with more details.
The vote to postpone a budget vote was 9-2, with board members Craig Freeman and David Tatman voting “no.” A couple board members expressed concern about pay raises for certain personnel and about looking for alternatives to some cuts that principals made to their school-level budgets. The principals are proposing budget reductions of 4 to 8 percent while protecting core classroom teachers from cuts.
Most of Thursday’s discussion, however, centered around Aramark.
In return for the $2 million in unrestricted funds, the Philadelphia-based Aramark is seeking a five-year extension on its contract, which is set to expire in spring 2016. That would extend the company’s presence in the school system through 2021.
Terrance Ransfer, associate vice president of operations with Aramark, told the board Thursday that in addition to the $2 million, Aramark is also prepared to spend $4.5 million of its own money on 300 projects at 79 schools.
Board attorney Domoine Rutledge, however, urged time to allow his office to negotiate and bring back a proposed contract.
“This is a PowerPoint,” he said. “I’d like to see some language.”
The company first took over most support work for the school system in 2004. In fall 2011, Aramark was granted a two-year extension on its contract in exchange for a $1 million unrestricted grant to the school system paid over a two-year period.
One negotiating point this time will be over where Aramark will cut back to afford the payout to the school system.
Board member Kenyetta Nelson-Smith recalled getting a lot of calls from subcontractors to Aramark, which lost work after that deal.
“Before we accept this money, I think we’re going to have to realize on whose backs we are going to accept this money,” Nelson-Smith said.
“A lot of those savings did come through the business partners,” acknowledged Ransfer, but he said that won’t happen again.
Board member Barbara Freiberg said she heard that another company had expressed interest months ago in bidding on those services.
“I like what Aramark has done so far, but I don’t know if we would be premature (to extend Aramark) if there are groups interested,” she said.
The $4.5 million worth of school repairs Aramark would undertake also sparked discussion.
Rutledge said he needs to vet the list to make sure the projects comply with Louisiana public bid law. Taylor also said he wants to send the list to school principals and get their feedback on whether the projects meet their needs. Because many principals are on vacation, he said, it will take time to hear back from them.
The proposed 2013-14 general fund budget is by far the largest of many the school system maintains, representing more than two-thirds of overall spending.
The proposed budget calls for a 5 percent increase in spending but only a 1.8 percent increase in revenue. The resulting overspending would leave the school system with an estimated reserve of about $16 million at the end of 2014-15 fiscal year.
That’s slightly better than the $8.6 million in reserves the school system projected in August, when it belatedly approved its 2013-14 general operating budget. That projection turned out to be conservative, as the school system now projects it will end the year on June 30 with $33.1 million in the bank.
The biggest category of new spending proposed for 2014-15 is $20 million more for new and expanding charter schools. Charter schools are public schools run by private organizations via contracts, or charters.
Taylor has pointed out that absent payouts to charter schools, overall spending would increase by only $1.5 million.
The $20 million figure, however, is based on charters schools reaching their maximum enrollment allowed in their charters. A few of the schools are likely to fall well short of their maximums.