As the school district’s fund balance grows month by month, the Fayette County Board of Education may be near a decision to spend some of that money on “enhancements” that may include increased teacher salaries and some restored personnel.
The decision to close four schools and eliminate over 250 positions was made back in March of 2013. That decision was made in order to trim costs out of the upcoming budget, which was expected to have a $15 million shortfall. In May, interim Superintendent Dan Colwell put forth a $162 million budget for FY 2013-14 that was balanced and, furthermore, included an $11.6 million fund balance.
At the time, Colwell said his eventual goal for the district was to build and maintain a fund balance at around 10-percent of the overall budget, which was $16.2 million at the time.
Colwell explained the decision to grow the fund balance in May, 2013: “I’m sure there will be some critics that will say you’re proposing a budget that will leave us with an $11.5 million dollar fund blance, why did you close schools, why did you lay off so many employees?” Colwell said at the time. “Our thinking in looking at this about every day for the past several months, it should never be the case that you shorten the calendar year to keep locally funded employees on the payroll or that we keep schools that we really don’t need as far as classroom space just because they’ve been around for a long time. We’ll never be able to give our employees a raise if that’s what we do.”
Now, the fund balance has grown each month and sits at around $23 million, meaning the system has about $6 million more than its 10-percent reserve target, which is about $17 million for the current budget.
Current Superintendent Dr. Jody Barrow put forth a plan at the Sep. 22 board meeting to spend some of that money on what he called “budget enhancements,” which could begin as early as December of this year.
The biggest item is an across the board pay schedule increase of 1.0-percent, which carries a $1.3 million cost for a full year.
Additionally, Barrow recommended an Assistant Principal be added back at each high school after those positions were trimmed in the austerity cuts. Barrow said high school principals have been keen on getting this help back as they work to comply with new teacher and student evaluation systems. Those four positions would cost $429,000 annually.
Barrow also proposed a “Plus-one Parapro” for the middle and elementary schools, amounting to 19 positions in all. Those positions would cost a total of $546,000 annually.
Barrow also recommended an increase in the number of allotted supplements for teaching six of seven periods at four high schools for the second semester. These extra 20 allotments would cost about $96,000.
Finally, Barrow suggested some Professional Development ($50,000) and some instructional software enhancements ($100,000).
Barrow said the salary schedule for the school district is currently around the “middle of the pack” relative to other large districts with student populations between 20,000 and 40,000.
“We want to get a little bit higher and attract the best teachers,” Barrow said.
Board Member Leonard Presberg said the feedback he’d heard from the community was that they wanted to see the reserve dollars spent in the classroom. He said the district had been budgeting conservatively and “we don’t always spend all that we budget.”
Presberg also pointed out that the total reserve funds were approaching 15-percent of the budget, the maximum allowed.
“So we have this money we’ve collected to spend on education,” Presberg said. “I think we need to spend that on education and resources. That’s what I hear from the community.”
Board Member Dan Colwell agreed that the district should spend down some of the reserves, even if it means the budget will be in a deficit for the year.
“I know we always strive to have a balanced budget, and in most years having a deficit budget would be a bad thing, but in this case it’s not. We have a healthy reserve fund for the first time in a good while and we are nearing the maximum limits of what that reserve fund can be. Even if we say we have a deficit budget, that’s not necessarily bad in this case,” Colwell said.
Finance Director Tom Gray said if the total $3 million of Barrow’s recommendations were added, and all other factors are held equal, the district would expect to spend at a slight deficit for another two-and-a-half years, while still maintaining a healthy fund balance.
Those other factors do not remain constant, though. Revenues may be trending slightly upward, while some other costs could increase as well, particularly health benefits. The full impact of recent changes in health care will not be known until maybe January, Gray said, and Barrow emphasized that those numbers remain an unknown that the district must be mindful of.
“I’m really concerned about the health benefits,” Barrow said. “For us as a system, one little tweak could cost us a couple million dollars.”
Barrow said in an e-mail Tuesday he felt most of the enhancement items were “well received by the Board.” He could not yet say whether a vote on the matter will be taken this month.
“I do plan to continue the conversations with the board and determine how far and fast they want they want us to go with the individual elements,” Barrow said.