Fayette BoE adopts tentative $186.6 million budget

Proposed spending plan is $16.4 million more than expected income; will use reserves

The third time around was a charm. The Fayette County Board of Education at a June 7 budget work session voted unanimously to tentatively adopt a second re-worked General Fund budget proposed by Superintendent Jeff Bearden.

The $186.66 million budget has $16.4 million in expenses exceeding revenues that will be offset by using the majority of the current fund balance, and leaving a projected $8.6 million in the school system’s checkbook a year from now to help combat issues such as decreasing revenues from falling student enrollment.

Bearden on May 24 had originally proposed a budget with $189 million in expenses and $170.2 million in revenues. He said the shortfall could be offset by using the expected June 30 fund balance that totaled $19.1 million, adding that the school board should begin meeting this summer to look for significant cuts for the FY 2012-2013 school year that begins in July 2012.

While board members Terri Smith and Janet Smola supported Bearden’s May 24 proposal, the large deficit did not sit well with board members Sam Tolbert, Marion Key and Bob Todd who told Bearden to come back a week later with up to half of that deficit erased.

Bearden returned May 31 with a two-part proposal that cut more than $900,000 from the administrative portion of the budget and/or one that would cut $3.44 million by eliminating two school days and another three teacher work days. Adopting both would decrease the expenditures side of the budget to $184.7 million, leaving $5.74 million in the fund balance a year from now.

Unlike some school systems, Fayette does not maintain a reserve account accessible only by the school board and, consequently, must rely on whatever fund balance is present at the end of the fiscal year. Board members Bob Todd and Marion Key on several occasions during the past two years have called for such an account to be established when funds are available. Board members Terri Smith and Janet Smola have not shared that point of view, nor has the school system.

As for the FY 2011-2012 budget, things had changed again by the time the board met June 7, with Bearden citing a number of computational changes and additional information that essentially retained the $900,000 in administration cuts, withdrew the $3.44 million cuts to the school calendar but determined that there was another $5.5 million available from several sources that would help increase the June 30, 2012 fund balance over his numbers a week earlier.

The bottom line is that the current budget proposal, the one adopted June 7, has revenues still estimated at $170.2 million but expenditures at $186.66 million, a difference of $16.436 million. The June 30, 2012 fund balance would total $8.6 million.

What was new in the equation were several factors discovered during the previous week that led to the current year-end fund balance increasing to $25 million, thus allowing the school system to end the revenue-constricted school year on June 30, 2012 with $8.6 million in the bank, Bearden said.

Bearden in a prepared statement at the June 7 meeting told the board his new proposal called for no calendar reductions that would lead to payroll cuts, but did include the $900,000 in administrative cuts along with $3 million in “recently found” funds from money owed by the state for employee healthcare premiums already paid, $800,000 in adjustments to state revenue owed to the school district, $250,000 in additional property tax receipts and a data entry error that accounted for a duplicate entry of $1.5 million.

Pertaining to the $3 million in healthcare-related funds, Bearden said, “In January, February, March and April our benefit bill that we pay to the state was $1.689 million a month. Therefore, we projected spending the same amount for May and June. As a result of the state front-loading the benefit bills sent to school systems, we have recently found our May and June bills to be considerably less. In fact, our May benefit bill was $160,000. Once again, this is in comparison to the four previous months of almost $1.7 million. In June, our bill once again will be approximately $160,000. This will increase our projected fund balance by about $3 million.”

The other significant finding from the previous week pertained to a data entry error totaling $1.5 million.

“We found a data entry error where our school operating allocation was counted twice in the FY 2012 budget projection. The effect is $1.5 million less in total expenditures than originally projected for FY 2012,” Bearden said.

The school board accepted Bearden’s proposed budget, voting unanimously to tentatively adopt it. The final vote on adoption will come later in June.

Even after the FY 2011-2012 budget is adopted the school board, as Bearden and some on the board have said, will have to begin grappling with what is coming a year from now. It was easy enough to use nearly $16.5 million of the fund balance to balance the FY 2011-2012 budget, but that will prove a difficult trick next year even if falling revenues hold steady at $170 million in the face of what will be a fifth straight year of falling student enrollment dollars. Adding to the difficulty is that, unless expenditures decrease dramatically, the $186.6 million in expenditures, not counting the cost of healthcare increases and required teacher raises, cannot begin to be covered by the projected $8.6 million that will be left in the bank.

Sleeping Beauty
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Money Pit

Rivers is a lovely building. Too bad FC can't find a way to use that and close another elementary that could be costing more to remain open due to age! Students in Rivers could be moved to other locations, just look at the numbers just released at most schools not reaching capacity and space at Whitewater High at a premium with trailers! It could even be used for an annex for the overflow! Use it, close it, sell it or rent it! It's time to make the space work for the county taxpayers not spend so much to keep it open so that some folks have a "lovely" space to have an office!

streetcleaner
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FYE 2013 is a disaster waiting to happen

I see major trouble in the FYE 2013 budget. Why are we spending over 60% percent of our reserves when we know property tax revenues will grow at best incrementally next year. Why is government so afraid to make intelligent reductions in spending. Ask some who works in the transportation field about load factors. Slow growth at best. And what will we do when we get to next year with a 16 million dollar deficit and 5 million in reserves?

BHH
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1.5 million is nothing to sneeze at.

This type of mistake should never have made it to the original proposal.

Robert W. Morgan
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If there's only 48 kids at Rivers Elementary School

why not close that and move them somewhere else? Might save some money.

suggarfoot
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the problem with Rivers is this

Even closed, it cost thousands and thousands to keep it up. That is the whole problem, there has to be security in it, maintenance, etc. which is a healthy hulk of change. Dr Todd or Marion Key can give you the figures, open vs closed. It is the gift that keeps on giving. No matter, open or closed, it is a real drain on the budget, just as Bennett's Mill, though it is closer to half full.

The cost is something like 100,000. before utilities. Keeping it closed is only slightly less as you still have to keep the utilities, though at a lower temp and you still have to have maintenance, and with it empty, 24 hr security.

As I said before overbuilding, or building in anticipation of what a developer 'might' do got us where we are now.

Coweta lets the developers buy the land and donate some of it for the schools. That way is fair. They are not stuck with what we are now stuck with because the gang of 3 that use to run the board wanted to apparently curry favor and hob knob, or just plain dumb, I don't know, but for whatever their motives, we are screwed and will be paying a long time.

Dr Tolbert, Dr Todd, and Marion Key will do their best to pull us out, but they are not magicians.

mudcat
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So, close it and then sell it

It would make a wonderful nursing home. Even if you don't sell it, 24-hour security can't possibly cost as much as all the teachers, admin staff, lunchroom, custodian, bus drivers, etc. You can let all those people go and absorb 48 kids into other schools that are also under capacity without any additional hires.

Or would the teacher's union object to that?

G35 Dude
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Give it away?

A school is only suitable for certain uses. That makes one hard to sell. Also, some attempts have been made to sell or rent space here but with little interest. So if it's closed it'll probably just sit there for a long time. And I heard somewhere that if a government building sits unused for some period of time that another government agency can take it if they need it. So what you're proposing is to just give it away. The poor planning that led to the building of this school and thereby the financial problems will not be that easily corrected.

abacus2
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Teachers' Union? What teachers' union?

What teacher's union? We have a choice of belonging to professional organizations - they are NOT unions. They can not do collective bargaining because Georgia is a "right to work" state. But here's an interesting bit of data. In education rankings, of the top ten states 8 have teachers unions. Of the top 25, 75% are unionized. Seems to me that education works better with teachers at the helm, not politicians.

fc1989
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Mudcat..can't absorb kids

My memory tells me that the 48 kids at Rivers are in Special Education and the staff at Rivers is Spec Ed. They would have to be housed somewhere else so there is no savings in staff unless we cut out some Spec Ed programs that are costing a lot more than standard class instruction. A lot of the Spec Ed money is Federal money and the system's hands are tied on how to spend it. Nursing home idea sounds good though.

roundabout
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Yeah, a Nursing Home---or Maybe a "Poor House"

Used to put them in insane Asylums with straight jackets and whips!

wildcat
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Rivers

Aren't the numbers low (well below capacity) at both SCHS and FCHS? I am guessing that the high school classes at Rivers could be housed there, along with the appropriate staff. The middle/elem could probably be housed at other schools as well if various programs were combined or moved.

A nursing home sounds like a good idea, or a tech high school that offers "everything vo-tech." Woudn't that be cool? The kids that don't really like school and aren't planning on going to college could learn a trade and become productive members of society and oh yea...maybe feel good about themselves for a change. But that will never happen.

suggarfoot
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it isn't fully staffed

that is the only blessing.

Dr Todd has been looking for a college to rent the space, but the deal is, they smell blood in the water and want to rent it for nothing.

BHH
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Morgan. that makes too much sense.

They will probably do something like consult with our county commission chairman who will insist on keeping Rivers open at all cost.

Come to think, if they closed all the rest it might work.

Frady may be on to something after all.