Macon County schools' central office has been scrambling this week to balance the 2012- 2013 budget. Last week, the schools’ finance director Angie Cook, informed county commissioners at a joint facilities review committee that Macon County schools are in serious financial trouble. She informed commissioners that she had been working with Interim Superintendent Dr. Jim Duncan to find areas in the budget to reduce cost in order to make up for a $550,000 shortfall in next year's budget.
According to Dr. Duncan, the school system’s financial problems did not surface overnight, but are a result of years of overspending and allocating more in the budget than the school system had in funding.
“This did not just happen over night,” said Dr. Duncan. “We had more money to work with in 2008 than we do now.
The state has been inconsistent over the last few years with their appropriation, making it hard to determine what funds we would receive each year.”
Dr. Duncan also noted that last year's intersession cost the school system a great deal of money, and at the time, cost more than the school had to spend. He also cited that this year marked the last year of federal EduJobs money. “Some positions were added when the EduJobs money was first allocated to the district and those positions were paid for out of that pocket of money which we knew was not reccurring,” he explained. “The expenses for those positions are reccurring and without those funds, have to be paid somehow.”
One of the largest contributing factors to the schools’ half a million dollar shortfall, according to Dr. Duncan, is the state employee salary increase handed down by the General Assembly earlier this year. “Our budget was already basically done and then the state passes a 1.2 percent salary increase, a 5 percent insurance increase and a 1.1 percent benefit increase, which amounts to about $350,000. Although on one hand we are happy the state approved the well-deserved raise for our teachers, they did it without giving us a way to pay for it. So we had to revisit the budget and find a way to come up with $350,000.”
Dr. Duncan also said that a surge in enrollment caught the school off guard this year. “We have 164 more kids today than we did in May,” said Duncan. “That accounts for about $150,000 that we hadn't originally planned for.”
The state's mandated reversion has also placed an undue hardship on the school system. For the past several years, Macon County has received a state allocation for funding for the budget and then has been asked to return a discretionary reversion of some amount. This year, Macon County was mandated to return $1,064,424 back to the state, which is comparable to last year's reversion of $1.26 million.
In order to account for the $1.06 million loss, Cook has had to rearrange federal and local dollars in order to avoid laying off employees or eliminating programs. “We are trading in 18 teacher positions which will give us $1,010,862 and the additional $53,562 will come from teacher assistant funding,” said Cook. “We will pick these positions up from local and/or federal funds.” Currently Macon County has 52 positions paid out of local funds.
The first step the school board took to make up for the shortfall was to allocate funds from the school system's fund balance. Even after basically exhausting the school district's entire fund balance of $1.37 million, the district still came up more than half a million dollars short and had to take drastic measures.
Without eliminating teaching positions and cutting funds to crucial programs, the school board looked at every possible way to make cuts without directly affecting students to make up for the shortfall this year. After reducing the original budget by $552,050, the Board of Education was able to approve a balanced budget for the 2012-2013 school year on Monday night.
With several areas being cut, the school system's greatest cost saving measure was estimated to be for public utilities (power) at an estimated cost of $177,202. “With the consolidation of the school systems and the new geothermal heating and cooling system at Iotla Valley, we hope to see significant savings there that helped when balancing the budget,” said Dr. Duncan Monday night.
Other cost savings measures were done to the tune of: $10,000 cut in expenses related to garbage collection; $70,000 in network communications; $65,000 in general maintenance costs; and $25,000 in custodial salary.
The school system also projects to save $43,000 in substitute pay and $20,000 in PRC 009, or annual leave pay. “We hope more people will show up for work this year and that we will be able to save money there,” said Dr. Duncan.
An additional $32,798 was saved in software contracts that were not renewed or not needed based on the computers and programs needed for education purposes in the district.
After major cuts and depleting the district's fund balance, the board was able to approve a balanced budget for this year, which leaves the question, “What about next year?”
Based on the current budget and projected expenses, if operations continue next year as they have so far this year, the school system is guaranteed a shortfall at least in the amount of the state mandated reversion, which is a little more than $1 million.
Cook and Dr. Duncan brought the district's finances to the attention of commissioners because without help on the state and federal levels, which is unlikely and certainly not expected, the burden will fall to the county to make decisions on the schools funding, which could result in the elimination of crucial programs and lay-offs of personnel.