School system’s budget situation worsens
If the last two budgets for the public school system had not been tough enough, the Grady County superintendent of schools predicts this one will be even tougher and is describing it as a “crossroads budget.”
Superintendent Dr. Tommy Pharis and school system Finance Officer Dan Broome were pretty optimistic last month going into budget preparations, but then they received the state allotment sheet and real property assessment notices were mailed and the news from both were bad.
“We were expecting a decrease in state funds, but when we received the allotment sheet last week it was more than we anticipated,” Dr. Pharis told school board members Tuesday night.
On top of the loss of federal stimulus money which helped prop up not only the local school system budget for the last two years but the state of Georgia’s budget and many other states as well, the additional cuts from the state will hurt.
Adding insult to injury is the county assessment notices mailed to county property owners last Friday that reflect as much as a 20 percent decrease in values.
The school superintendent said county officials have told him to anticipate an approximately 10 percent drop in the county’s tax digest.
“We are talking about a $500,000 to $700,000 drop in local tax revenue. Hopefully we will have some accurate digest numbers in June,” Dr. Pharis said.
The superintendent reminded board members of the large cuts made over the last two fiscal years in personnel, equipment, and technology.
“We have set our goal of meeting the needs of every individual child, whether it be those most at risk or our most accelerated, but to do that costs money. We must prioritize our spending based on student needs and the needs of the system,” Dr. Pharis said.
The superintendent on Tuesday night outlined major budget initiatives, which he says must be funded or else the system will “take a huge step backward.”
Dr. Pharis wants to add back three positions of the 30 that have been cut over the last two fiscal years.
“We will be competitive as far as educational opportunities within the surrounding area. We owe that to our students. We need an additional science teacher at Cairo High School,” the superintendent said.
He pointed out it will not be a full position because three teachers who are paid for extended day would come back to regular day payscales. The superintendent said it was nearly impossible to schedule students for science at the high school with the current staffing.
Dr. Pharis is also recommending the hiring of a foreign language teacher who would teach at both CHS and Pre-AP classes at Washington Middle School. The third position being solicited by Pharis is for a remedial math teacher to work at both Whigham and Shiver as part of promotion and retention changes the board has approved.
Another keystone of Pharis’ budget plan is a big investment in technology. He says teachers are using computers that will not run the software the system is using for student records and state required reporting. Computers in school computer labs are also outdated and will not run or run slowly on the new software being used. The technology department is finding it harder and harder to repair and maintain the system’s computers, according to the superintendent.
Pharis is pushing for the board to budget to replace all teacher workstations, replace computers in three outdated labs, and near the end of the next fiscal year create a new lab at Southside and a partial lab at Northside so that all schools will have at least two working computer labs.
Another major item that must be considered regards facilities. The air conditioning system at Cairo High School is 14 years old and in need of immediate repair. The chiller system cools a large portion of the school and it is in need of repair or replacement.
Director of Operations Jerry Cox briefed the board Tuesday night on the situation and outline in general terms some of the options the system will have, none of which are cheap.
When one of the compressors in the two units at the high school went down in June 2009, Cox told board members it was possible the system could work with only three compressors, but if another one failed the situation would have to be addressed.
Now the system is looking to either replace the chiller or to shift to a combination of wall-hung units and split units. Cox is anticipating the cost for either option is going to be expensive. He estimates to replace the chiller would be $395,000 and on top of that the computerized controls would tack on another $150,000.
Cox has requested proposals which will be due May 20. Board members expressed their desire to act as quickly as possible so that the school could be made comfortable when the new terms begins in August
Just how to fully fund the budget will be debated in the coming weeks, but Dr. Pharis said the option of raising taxes would have to be the last resort.
The superintendent will recommend dipping into the system’s estimated $2.7 million cash reserve, but he also wants to use unspent Education Special Purpose Local Option Sales Tax (ESPLOST) II funds to cover investments in technology and replace the air conditioning system at the high school along with other capital needs that otherwise would come out of the general fund.
The system has $1,486,000 left over in the ESPLOST II account. Dr. Pharis says after consulting with Board Attorney Thomas L. Lehman, it has been determined the school system could incur debt prior to the ESPLOST II being closed out and those remaining funds could be used to pay off the debt.
By borrowing $1.4 million for a designated length of time and using the money only for specific capital projects, Lehman says the remaining sales tax proceeds could be used to pay off that note.
“This is the way I view it. You’ve done it right so far. You selected projects and you put an amount on the project. That is the max you will spend on that project. When you reach the max amount set for in the ballot or resolution on a project you have finished and if any money is left there is a specific priority for how it can be used,” Lehman said.
He says first the money must be used to reduce or pay off mature debt that is associated with the ESPLOST project. Next, according to Lehman, you pay any general debt that exists at the time the ESPLOST is closed out. If money still remains, the board attorney says it must be used to roll back ad valorem taxes.
Lehman told the board the school system could incur debt prior to the close out of ESPLOT II and the remaining funds could be used to pay off that indebtedness.
His opinion is that a project paid with the borrowed funds must be for capital projects.
Dr. Pharis and Broome developed the plan to borrow against the remaining ESPLOST funds as a way to reduce the burden on the general fund.
Chairman Cuy Harrell III asked about the projects and amounts listed in the ESPLOST II ballot. Lehman said the board was bound to spend the amount approved for each project, but not required to spend anything additionally.
“We are certainly not asking for a decision tonight. The purpose of this discussion is to make you aware of the budget situation and aware of the possible ways to fully fund the budget. We want to make sure this is the right thing to do and when we are talking about sales taxes or bond money there are rules we have to follow. Our intent is to follow the law and address budget issues openly and in a lawful manner,” Dr. Pharis said.
He said his office and the school board would be considering all options and making some decisions as the preparation of the 2011-2012 operating budget continues.
Board members did not rule out a special called meeting between now and its regular June meeting.