The Liberty County Board of Education received a “very detailed picture” of the school district’s finances at a work session held Tuesday morning at the BoE building.
LCSS Superintendent Dr. Valya Lee said the presentation was meant to help “lay a foundation” for the recommendations she plans to bring to the board at its Feb. 10 meeting, as the district prepares its fiscal-year 2015-‘16 budget.
Much of the material presented by Lee and LCSS Chief Financial Officer Roger Reese reflected information that already had come to light at a community forum the district hosted Jan. 22 – namely, that LCSS has lost a cumulative $33 million in state and federal funding over the last four years.
Reese said that federal funds come in the form of impact aid, which Lee pointed out can vary greatly from year to year.
To illustrate the point, Lee said that she had been informed that prior to her coming to Liberty County, the district had received $14 million in impact-aid funds for one year. The very next year, she said, the district received only $600,000 in impact aid.
According to Reese, the “vast majority” of the district’s funding comes from the state. Again, Lee stressed the “uncertainty” of these funds by stating that austerity and equalization at the state level have drastically reduced the amount of money LCSS receives.
She said austerity basically means “the state just says we need to cut.”
“There’s a strong tax base in Liberty County,” Lee said, explaining equalization. “So, they say, ‘you don’t need the money as much as someone else.’ That’s why they took that $4.5 million.”
Lee was referencing funds she said the state rescinded last April, after the district had already finalized its FY14-15 budget.
Included in the presentation was a slide that reflected a “historical analysis” of the district’s budget since the 2011-’12 fiscal year.
According to the slide, the district’s fund balance at the end of FY11-12 was $34,760,141. By the end of FY12-13, the fund balance was roughly $31.2 million, and by the end of the last fiscal year, the balance sat at approximately $25.3 million.
Reese said that according to the budget the board adopted last May, the general-fund balance was projected to be at $10,150,000 by the end of the current fiscal year. However, he explained that the receipt of unexpected impact-aid funds would leave the district with roughly $16.4 million at the end of FY14-15.
A separate line in the analysis showed that the district has spent more money than it received every year since 2011-’12.
Board member Marcus Scott asked why the 2011-’12 deficit – a total of $11,296,577 – was so high.
Reese replied that a bulk of the renovation funds for Olvey Field were expended that year, which had to come from the general fund because they were not provided for in E-SPLOST.
Board member Verdell Jones said that, even excluding the Olvey Field expenses, “we can still look and see that every year we’re at a deficit. And if you continue over a long period of time functioning at a deficit, eventually, the cuts are going to really hurt.”
Reese then noted that having a large fund balance actually is “not a good thing” in the eyes of state auditors.
“You’re only supposed to collect revenues for the current school year, not build a war-chest,” he said.
Board member Carolyn Smith Carter added that the district had even been cited by the state for having such a large fund balance.
Lee then suggested that the hefty balance wasn’t actually a “real” one, “because we had a number of positions that had not been filled. So, those salaries were in that fund balance.”
Lee again stressed the point that 84 percent of LCSS’ budget – roughly $82.8 million – is dedicated to personnel. She said that in order to find the $12 million needed to balance the district’s budget, a reduction in force is necessary.
The superintendent also noted some other areas that could be looked at for potential cost savings, including a 20-percent reduction in spending across the board as well as new energy-management protocols.
She said the district spends roughly $300,000 a month on energy alone.
Lee also recommended the pre-K center as an avenue for cost savings.
“Pre-K is costing us,” she said. “I don’t know the answer. I don’t have the answer. I’m going to bring you a couple recommendations, and I’m going to continue to solicit them from anybody we can.”
For more on the state of LCSS’ finances and the superintendent’s proposals for lowering pre-K costs, see Wednesday’s Courier.