'Put your pencils down': NJ scolds Lakewood schools, but gives $28M loan

Stacey Barchenger , Stacey Barchenger | Asbury Park Press

Show Caption Hide Caption This Lakewood schools email chain led to a $28 million loan — and a scolding A glimpse at the series of emails between Lakewood school leaders that earned a rebuke from the state.

LAKEWOOD - Reprimands are ubiquitous in schools, but typically the targets are students. Except in Lakewood, where last month state education leaders delivered a digital scolding to school district leaders.

"Everyone please put your pencils down," state Deputy Assistant Commissioner of Education Glenn Forney wrote in a May 7 email, which was obtained by the Asbury Park Press through a public records request. He wasn't talking to students — he was talking to the superintendent of Lakewood's public schools, the schools' attorney, the state-appointed fiscal monitor and another state education department employee.

BERGMANN: Lakewood, state must meet halfway

GOOD NEWS: For NJ cop, routine traffic stop becomes happy reunion with man who delivered him

MORE: 2 Lakewood students charged over loaded gun brought to school

The email capped a back-and-forth in which Lakewood's assistant business manager, Robert Finger, refused to add the district's loan repayments — about $3 million annually — to his proposed budget. Finger wrote that doing so would increase the amount of the loan that had to be taken from the state this year, which wound up being $28 million.

"Makes no sense to me," he wrote. "Therefore I'm not going to do it."

The spat reveals a breakdown of communication that has left the broke school district on the hook to repay a $28 million loan, tensions between district leaders and the state-appointed fiscal monitor, David Shafter, and confusion within the district itself. One district official acknowledged a "disconnect" in the communication.

"This constant back and forth is completely unproductive and a waste of time," Forney wrote in the May 7 message. "I am disappointed with the lack of ability to work in a collaborative fashion."

Hours later, Forney said the district would be offered a $28 million loan — not the grant the district had asked for — citing lack of cooperation and saying the district refused to provide information to the state. A grant does not have to be repaid, but the loan means Lakewood will get less state aid beginning in 2019-2020 and continue its annual budget crisis.

The district fired back, saying its department heads had never been asked for more information. Superintendent Laura A. Winters said she understood there would be another meeting with "higher ups" in the state and was "astonished and dismayed" when the loan offer arrived instead.

A spokesman for the Department of Education declined to provide further information at the time, saying the department would not hash out the issue in the media. The Press filed a public records request seeking communications between Forney, budget manager Angelo DeSimone and Lakewood School District employees between April 1 and May 10, three days after the loan was offered.

The Department of Education's response includes a request from Shafter, the state-appointed monitor assigned to oversee Lakewood's finances, for employee insurance cost information. It's unclear if he received the information.

There is no other request in the records provided for information or documentation. The letter offering the loan says those requests occurred during in-person visits to the district, though Lakewood officials maintained whatever they were asked for they provided.

Lakewood Board of Education attorney Michael Inzelbuch said Finger, a former auditor for the state Department of Education, was an asset to Lakewood who previously worked for the district and during that time helped keep the budget in the black.

"The state emails you provided to the district do not in fact appear to demonstrate the district failed to provide anything," Inzelbuch said. "What it does appear to demonstrate is a disconnect, something that I attempt to bridge on a daily basis."

Notably the records include a frenzy of emails between state and district officials during crunch time: The district was just two work days away from a deadline to hold a public hearing on their $165 million proposed budget and $28 million deficit. That was ultimately delayed because of a power outage.

The New Jersey Department of Education's decision was a blow to the district, which for months had launched a public effort to convince the state that the education funding formula was to blame for Lakewood's shortfall. Thus, the district argued, the state should give the money to the district with no strings attached.

The loan, combined with three others the district has taken in recent years, means that starting in 2019-2020, the district will be docked about $5.8 million in state funding annually, according to Finger. That will certainly deepen the district's financial crisis, potentially forcing cuts.

Finger has previously estimated Lakewood's deficit for the next full year, 2019-2020, at around $40 million.

LAKEWOOD: How this Orthodox Jewish school and its leader turned Lakewood into NJ's boom town

APP INVESTIGATION: Lakewood tax felon is link between low-income housing funds and luxury development

Stacey Barchenger: @sbarchenger; 732-643-4245; sbarchenger@gannettnj.com