Budget cuts loom, nickel tax possible
The McCreary County Board of Education met in a special session Monday evening with the purpose of finding out how much they can spend to repair facilities and getting an early idea on what cuts may have to be made to balance the budget before the deadline later this spring.
In past years, when faced with potential cuts, the Board expressed concerns over proposals on what could be done coming from Superintendent Donnie Wright giving them little time to explore other possible actions.
This year the Board has been proactive, requesting frequent updates from District Finance Manager Kristi Curry, and holding special working sessions to develop a plan that would not involve cutting teachers throughout the District.
The first item tackled Monday was determining how the District could pay for much needed repairs at Pine Knot Intermediate and McCreary Middle.
The Board met with Melinda Joseph-Dezarn of Ross Tarrant Architects concerning the construction projects that need to be completed within the school district – namely the roof replacement at Pine Knot Intermediate and foundation repair at McCreary Middle School.
The architect informed the Board that both projects are “critical,” and noted other projects are needed within the next couple of years.
In addition to the roof and foundation, new locker rooms and bath rooms need to be built at the softball field before next season to comply with Title IX requirements, the Bus Garage needs repair, and something needs to be done about the facilities at the Pre-School.
Kristi Curry informed the Board that $167,000 in the construction fund, typically reserved to cover shortfalls in the General Fund, could be used to secure bonding potential of just over $4 million.
The funding could be used to finance not only the roof work, which needs to be completed over the summer break, but could also pay for the foundation repair at the middle school, construct the locker facilities at the softball field and possibly work on the Bus Garage or Pre School as well.
That money can be converted into a bond sale this fall, bringing in funding to pay for the work. The roof project, which already has approval from the state, could be started this summer, before the bond sale, with the money spent being reimbursed to the General Fund once the money is acquired.
The other three projects still need to be examined by an architect and sent to the state for approval.
All projects would be subject to a public bid.
The issue with retaining that money in the construction fund is that it would create an additional shortfall on the 2015-16 budget.
The only other option available to the Board would be to consider raising additional funds through a “nickel tax.” The tax, five cents per $100 of property and motor vehicle assessed value, would raise funds that could only be used for construction.
In many instances, the Board was told, the state legislature will match the funding raised by the nickel tax, effectively doubling the money generated.
The tax, if adopted by the Board, would be subject to a public hearing and possible recall from voters.
The Board asked for a proposal for moving the pre-school into Pine Knot Primary and Whitley City Elementary schools, which would require some additional work on both schools, but would be conceivably less expensive than doing extensive work on the pre-school.
Such a move may require shuffling of students in higher grade levels, such as moving sixth grade to the middle school.
Assistant Superintendent Aaron Anderson was tasked with looking at the feasibility of such a move, and is expected to present his findings to the Board in two weeks.
Following the discussion over construction, attention turned toward the budget for the next school year.
Curry presented some good and bad news to the Board concerning changes to projected revenues for the coming year.
On the positive side, the state has agreed to fund the shortfall in SEEK funding, adding about $67,000 to the revenue. Also SEEK funding is projected to be higher than first expected due to an increase in average daily attendance.
On the down side, funding for at risk, including special needs students, is projected to fall by about $163,000, wiping out the gains in SEEK funding.
With a mandatory two percent salary increase, along with an additional two percent from the Board and the creation of new positions for the McCreary Academy, the projected deficit for the upcoming budget stood at about $555,000.
But the abolishment of an instructional supervisor position as well as a planned reduction of about four staff from a school that was over the allotted number of teachers, the deficit shrunk.
Those changes brought the projected deficit down to about $272,000, but when adding in the $167,000 removed to finance the construction projects, the Board is looking to shave about $440,000 from the budget in the coming weeks.
Chairman Brandon Kidd asked Superintendent Donnie Wright to prepare a listing of potential cuts, similar to what he had presented in previous years, so the Board could examine each cut and decide where to make changes.
Wright stated he would be glad to do so, but advised them there isn’t much left in the budget to cut.
“It is a pretty bare bones budget as it is,” Wright said. “There is no fat. Any cut will be to education, and that is the only product we sell.”
One possibility alluded to by Kidd, could be a district-wide reduction in extra-service pay, such as extended days.
Kidd said such a move would be fair and equitable across the board, rather than letting teachers go.
“I think our last option is to cut teachers,” he said.
A deadline of May 15 looms before any decision to cut salaries, change duties or lay off any tenured staff member. That date is the last day staff members can be notified of such changes.
The Board is expected to hold another budget working session on Monday, April 13. The next regular scheduled meeting of the McCreary County Board of Education will be on April 28.
