NEWARK, NJ -  There are five major fines, lawsuits and federal investigations from previous administrations that could soon drain millions of dollars from the school district’s budget, according to Newark Public Schools Superintendent Roger León.

One fine alone that has gone unpaid for three years could cost $48 million -- at a minimum.

León recently outlined the problems he inherited during a school board business meeting, which could possibly impact to the school district's $1 billion budget. During the meeting, he gave brief details of two federal investigations, a federal health insurance fine and two union-related issues.

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“Oh, P.S. I began on July 1,” León scoffed as he began to verbally lay out each issue at a Nov. 20 school board business meeting.

León and a district spokeswoman did not respond to requests for further elaboration.

The district has had significant budget challenges the past couple of years due to decreasing per pupil revenue and increased "aid" to charter schools, according to the district's 2017-2018 budget. The 2018-2019 budget came amid years of flat funding from the state the and increased costs for salaries and health benefits.

The next budget for the upcoming school year will be drawn up around May, and it will be the first created under local control.

MORE: Newark Sees School Funding Increase Under Legislation Signed by Gov. Murphy

The state took control of Newark Public Schools about 22 years ago, and only this year has it come back to local control. The transition comes after the stormy tenure of former superintendents Cami Anderson and Christopher Cerf.

Cerf was appointed as chief of the district by former Gov. Chris Christie in 2015 after Anderson resigned. Anderson in 2011 was also appointed by Christie.

Those outside the administration don’t blame León for the latest issues now facing the district. Newark Teachers’ Union President John Abeigon in March -- shortly after the district began its transition to local control -- called for an audit of all the deals, contracts and agreements made under state control.

“I think that under the circumstances, the fact that he’s not out there screaming bloody murder, I think it’s commendable,” Abeigon told TAPinto Newark.

Here are details of the five issues.

FEDERAL AFFORDABLE CARE ACT FINES

León said the district received one penalty under the Affordable Care Act -- more commonly known as Obamacare -- in 2015 of over $13 million. The fines have continued to be incurred each year since then, so the district is facing a minimum of $48 million in penalties, León said.

A district spokeswoman did not respond when TAPinto Newark asked to speak with the school board attorney about all of the legal matters that were mentioned at last week’s meeting.

But Newark Teachers’ Union President John Abeigon explained that the penalties have to do with the previous state-controlled administration failing to offer health insurance to per-diem employees who worked at least 35 hours a week.

“All they had to do was offer it,” Abeigon said. “If the employees said no, it would’ve been no sweat off anybody’s back.”

The Internal Revenue Service said it does not comment on an entity’s taxes when TAPinto Newark asked about details of the fines.

DEPARTMENT OF JUSTICE INVESTIGATION

The superintendent also explained the district is still awaiting the results of a U.S. Department of Justice investigation regarding students who are English language learners (ELL).

“There's a Department of Justice investigation that was in fact filed where in 2016-2017 an ELL student had indicated that this district had not been of great service to them because we were not meeting their needs…” León said at the Nov. 20 business meeting.

Other details about the investigation first emerged at an August school board meeting. Newark Public Schools Office of Special Education Bilingual/ESL Education Director Brenda Garcia at the time explained the federal investigation deals with several factors, including how the district communicates with parents who aren't English speakers.

“In August 2017 -- which was about five months after I joined [Newark Public Schools] -- we received a complaint from the U.S. Department of Justice,” said Garcia, who was invited to speak at the August school board meeting. “It was a complaint initially around...what our policies and procedures were for enrolling and registering English language learners at NPS. The secondary complaint was around how we communicate with parents who don't speak English."

The school district plans to remedy at least eight key elements for ELL students, Garcia said. Those include ELL testing procedures and translating letters for parents who do not speak English.

A Department of Justice spokesperson said the agency does not confirm, deny or comment on the existence or nonexistence of investigations.

U.S. DEPARTMENT OF EDUCATION OFFICE FOR CIVIL RIGHTS

The superintendent only briefly mentioned an issue with special education involving the U.S. Department of Education Office for Civil Rights. 

“The office of Civil Rights has indicated that in fact that servicing of students with special needs is something that we do not do very, very well,” León said. "I'll remind everyone that around 2014-2015 this district created pathways towards special education. It appears that those pathways did come to a dead end.”

A U.S. Department of Education spokeswoman did not respond to a request for comment. 

However, a review of publicly available documents from the Office for Civil Rights indicates there are four open investigations into complaints against the district's handling of a federal regulation known as FAPE, or a free appropriate public education. The law requires a school district which receives federal funds to provide students with disability programs or services that meet their individual needs.

Of the four investigations, the first was opened in 2015 and the latest began in September 2017, records show.

Previous agreements that have been reached between the Office of Civil Rights and the school district have not resulted in fines.

CIVIL SERVICE COMMISSION

About 45 attendance counselors were laid off around 2013 when the district was facing a $56.9 million budget deficit, according to state records.  Attendance counselors were responsible for tracking absent students, making house visits and linking families to services to reduce absences.

MORE: Reorganization Coming to Newark Public Schools, Superintendent Says

At the time, the counselors would try to track down anywhere from 350 to 700 students each week.

Attendance counselors are under the jurisdiction of the state Civil Service Commission, so they appealed their terminations to the agency. The commission transferred the matter to an administrative law judge.

The Newark Teachers Union also filed a complaint with the state Department of Education over the same matter, but the department transferred it to an administrative law judge.

Both cases were combined as one case before an administrative law judge.

The administrative law judge ruled in favor of the attendance counselors, but said the Department of Education commissioner would have the predominant say in the matter.

The education commissioner opposed the administrative law judge though, and ruled against the guidance counselors. The Civil Service Commission ruled in line with the education commissioner, stating that the terminations were made in good faith.

Newark Teachers Union attorney Eugene Liss said the layoffs are now being contested in a state appellate court.

“The commissioner reversed the administrative law judge and we argued the case in front of the appellate division two weeks ago,” Liss said. “And I feel very good on our position.”

An appellate court can overturn the Civil Service Commission’s final 2016 decision, an agency spokesperson said.

Even though the issue is still in the courts, León plans to hire attendance counselors again and said their terminations were short-sighted. Attendance is a main goal for the current superintendent, who wants to reduce absences across the district to zero.

“A judge has indicated that that didn't work very well for us and that we do need to hire back attendance counselors,” León said last week at the public business meeting. “That was already part of my plan and most of the attendance counselors -- because I used to supervise them -- knew that with my appointment I would be reinstating them.”

León only alluded to an issue that the Civil Service Commission has "asked us to resolve" before the attendance counselors can be hired.

The Civil Service Commission issued a certification from the special reemployments lists on Oct. 26, said  Eugene Lanzoni, a legislative liaison for the agency. The district must now return that certification to the agency, he added.

A certification is a list of people who are qualified for the job after taking a civil service exam. The district requests that list from the Civil Service Commission when vacancies need to be filled.

2012 TEACHERS UNION CONTRACT

In 2017, the district's administration appealed a Superior Court decision that upheld an arbitrator's findings in a six-year contract dispute. The appeal was denied, which means the current administration is on the hook for millions of dollars in retroactive-pay.

School officials previously declined to comment on the matter when TAPinto Newark first reported on the Superior Court’s July decision. However, the superintendent last week briefly referenced the matter during the school board’s business meeting.

He referred to the decision as the “Mastriani arbitration decision,” making reference to the arbitrator in the case, James Mastriani.

“We have a judge's decision of that appeal and it is millions and millions of dollars that this district would need to be actually paying to Newark Teachers Union for infractions that occurred during 2012-2013,” León said.

The union provided a copy of a memorandum of agreement from this month between the union and the superintendent. It shows the district will now have to pay about $2.4 million to employees by Dec. 31 for the grievances stemming from about 2012.

Down the line, the district also agreed to negotiate a step and advanced degree salary guide. That could be even more costly than the $2.4 million in the binding arbitration settlement.

"That’s another reason why we settled it the way we did -- because it’s not a $30 million hit in the same school year," said Abeigon, the Newark Teachers Union president. Abeigon added that he didn't want the advanced degree salary guide to result in layoffs for other staff, like clerks or aides.

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