At an April Okaloosa County School Board meeting, Superintendent Marcus Chambers sounded a warning that the School District was facing a probable $2 million increase in health insurance costs and a $600,000 increase in its required contribution to the Florida Retirement System.

Chambers also said his plan to spend an additional $1.3 million on Exceptional Student Education — at least in part in response to the findings of a Florida Department of Education audit of the county’s ESE program — would create a potential $4 million hole the School District would have to dig out of to balance its fiscal 2019-20 budget.

A newspaper article relaying the superintendent’s concerns, which were expressed before the Florida Legislature had decided how much it would appropriate for public school education for the upcoming year, caught the attention of state Rep. Mel Ponder.

Ponder, R-Destin, took the information conveyed by Chambers to Denise Potvin, the budget chief for the Pre-K 12 Appropriations Subcommittee.

“I went to her with the article. I knew this year was obviously going to be favorable for funding, and I asked her ‘can you help me rebut this, or give me the good news to offset this?' ” Ponder said.

Potvin produced a point-by-point rebuttal to each of Chambers’ claims.

Addressing Chambers’ statement that public school system funding had been stagnant for the last 11 years, Potvin noted “FEFP (Florida Education Funding Program) funding has increased by 19.88 percent; compared to an increase of only 7.77 percent in the number of FTE (full time equivalency) students.”

Potvin also noted statewide per-student funding over the past 10 years has increased by $775, or 11.23 percent. She said FEFP funding in Okaloosa County had increased by 28.25 percent over the last 10 years while its FTE student population had grown by only 11.22 percent.

“The district average funds-per-student in the FEFP has increased from $6,673 to $7,695; or over $1,000,” Potvin wrote in her rebuttal. “Funding for the state’s public school system has not been stagnant. … This is also true for Okaloosa School District.”

This year the Florida Legislature approved a $782.9 million budget for public school education. Included in that is almost $10 million for Okaloosa County, which provides $5.1 million in discretionary funding.

The discretionary dollars can be put toward the projected $2 million increase in health insurance costs as well as toward additional ESE Program funding, Ponder said.

The fiscal 2019-20 state school budget likewise addressed the final concern expressed by Chambers, that of the $650,000 increase in Florida Retirement System costs. The Legislature voted to approve $35 million to cover the statewide increase in the FRS employer contribution, Potvin said in the rebuttal she created for Ponder.

Lawmakers set aside $96,357 for ESE students in Okaloosa County. It’s a dollar amount “which represents the increase number of these types of exceptional education students forecasted by the district,” Potvin wrote. “The district’s number of students in these programs has remained flat.”

Chambers decided to request an additional $1.3 million in ESE program spending after the DOE sent a team to interview a handful of local focus groups about issues within the existing program.

The team visited Kenwood Elementary School and Silver Sands School, locations at which four ESE teachers have been arrested on child abuse charges since 2017 and a fifth ordered to relinquish his educator certification based on findings he also physically harmed special needs students.

Issues within Okaloosa’s ESE programs sparked the scandal that led to Gov. Ron DeSantis’ January decision to suspend of Superintendent Mary Beth Jackson and replace her with Chambers.

The DOE investigators recommended the School District hire professional specialists, provide more training for teachers and streamline its effort to improve the existing program.

“I’m very much committed to making these changes. I think first and foremost our ESE students deserve it. I think our teachers deserve it and obviously our parents deserve it,” Chambers said following the publishing of the DOE report in April.

Chambers, who was not made aware of Potvin’s analysis of his April comments, said when the Florida Legislature announced it had set aside $782.9 million for the state’s public schools that he was grateful to the state for a $234 per pupil increase in spending and a $74 per student increase to Base Student Allocation.

The BSA dollars are the only ones school districts can use to pay for student programs and teacher salaries, among other things. This year’s increase is the largest since 2015-16.

Chambers also thanked the state for the $9.7 million increase over last year’s budget.

But he cautioned School Board members at a recent workshop that the new money can’t fix everything.

“We can’t expect Tallahassee to solve all of our problems as it pertains to our budget here in Okaloosa County,” he said. “I do believe that we need to own our current financial situation and take purposeful actions to solve our own constraints as it pertains to the budget.”

He gave no indication of how the $5.1 million in discretionary funds would be used, but Chambers, speaking through a spokesman, said it is unlikely that money will be put toward anything the district would have to find funds for again next year.

"Using non-recurring funds to cover recurring costs is just bad business," he said.

Chambers signaled as Okaloosa’s 2019-20 budget is finalized, important decisions will be made “by those closest to the students.”

Chambers repeated his promise to focus on reducing costs at the district level by about $1.1 million.

“I will look to make cuts at the district level first,” he said. “We cannot ask the people who run our schools to tighten their belts if we are not setting the example,” he said. “How dollars were spent in the previous administration will need to be examined. We are going to have to do business differently.”

He said he wants to move toward a “site-based model” of budgeting and administration “where decisions are made at the school level” and will convene a group of principals over the summer to assist in the transition.

When Chambers initially made public his concern that the School District could find itself with a $4 million deficit, skeptics took note that the dollar figure he provided mirrored one that state documents indicate the district owed the DOE for badly overestimating the number of students it would educate in fiscal 2018-19.

In calculating annual per district student funding, the Legislature relies heavily on Florida’s 67 school districts to provide an estimate of the number of students it believes will attend classes during a given year. The district calculations are turned in each October and revised in February.

Okaloosa’s October FTE, or full time equivalency, projection was 31,895, a state document shows, and its February revised projection was 31,361. The 533 student over-estimation would cost the county $4.1 million, the document shows.

Ray Sansom, who worked in School District administration under Superintendent Don Gaetz and is running for superintendent, said “I’ve never seen Okaloosa be off by 533 students.”

Sansom went public this week on Crestview Community Television to claim that Chambers' comments about “stagnant” state spending amounted to blaming the Florida Legislature for a $4 million shortfall the School District had brought on itself.

“Really, the deficit they’re experiencing isn’t from the Legislature, it’s over calculating by 533 students,” he said. “The $4.1 million deficit is there because of over-projection.”

Steve Horton, an assistant superintendent under Chambers and the School District’s spokesman, acknowledged the coincidence of the $4 million figures appearing as a projected deficit and as the amount Okaloosa County owed the state for overestimating its student numbers.

He also denied the deficit projection and state FTE calculations were in any way related.

While Horton acknowledged last year’s over-estimation of students is not something the district wants to repeat, he added that the 533 student number is “weighted” and doesn’t compute student for student. The $4.1 million state estimated cost to the county is also high, Horton said.

An “unweighted” figure calculated by School District Chief Financial Officer Rita Scallon puts the over-estimation total at about 302, Horton said. That, he said, is about 1 percent off the target FY 2018-19 student population.

Scallon also projected the actual dollar amount Okaloosa County will have to reimburse the state at about $800,000 less than the $4.1 million estimate, or about $3.3 million. The School District maintains a reserve fund that it uses exclusively to cover costs associated with FTE funding and student projections, Horton said.