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The county has some $30 million in reserves and leftovers, but guidelines stipulate where it all goes.
Sunday, May 19, 2013
Franklin County anticipates starting the new fiscal year with about $17 million left over from the current year in a “fund balance” account and nearly $13 million in a capital reserves fund.
But county officials say that does not mean they are blithely withholding a total of $30 million that could be tapped to help save county public schools from cutting staff, programs and middle school sports to close a budget gap of nearly $1.5 million.
Rick Huff, county administrator, declined to comment Friday.
But Vincent Copenhaver, Franklin County’s finance director, emphasized that policies, sound fiscal practices and money already earmarked for specific capital projects guide how that $30 million should be saved or spent.
Meanwhile, David Cundiff, chairman of the board of supervisors, declined to predict Friday whether supervisors will find a way to boost school funding beyond the contribution already approved of $31.6 million, a 4 percent increase over the current fiscal year’s allocation to schools.
“All the members of the board of supervisors and county staff are exploring options to see if there is any more funding for schools,” Cundiff said.
He and Copenhaver both noted that the county has been asked in recent years to replace millions of dollars lost to state funding cuts and to make up the difference when federal stimulus money dried up.
During an emotional meeting Monday night, the school board voted 4-3, with member William Helm abstaining, to adopt a revised budget that included nearly $1.5 million in cuts. The meeting climaxed with Chairman Ed Jamison’s resignation.
Jamison was particularly distressed because the revised budget eliminated middle school sports and lopped $29,000 from high school sports.
On Friday, Jamison said he is reconsidering his resignation in the wake of what he described as a remarkable outpouring of support. The school board has scheduled a special meeting at 6 p.m. Wednesday to decide whether to accept his resignation.
Monday night’s vote also set in motion eliminating an estimated 25 school division positions, cuts in funding for the school system’s gifted and talented program, a reduction in the schools’ contribution to employee health insurance premiums and more. Additional cuts include dropping 14 of 34 tuition slots earmarked to send high school students to the Roanoke Valley Governor’s School.
School officials and many others had hoped supervisors would approve raising the real estate tax rate by 2 cents per $100 of assessed value to boost school funding.
But the supervisors, by a 6-1 vote last month, rejected that increase. Franklin County has one of the lowest real estate tax rates in the Roanoke region, at 54 cents, though neighboring Bedford County is even lower, at 50 cents.
So, what about that $30 million?
Copenhaver said that only about $1.7 million of the $17 million fund balance will likely be considered to be “excess funds” as of June 30.
By a policy adopted in 2011, he said, the county works to maintain a fund balance at June 30 of about two months of general fund operating revenues, a figure he said totals about $12.3 million.
In addition, he said, the anticipated fund balance of about $17 million likely will include $2 million to $3 million that hasn’t been transferred to the school division for the current fiscal year.
Why can’t supervisors simply add that money to the school division’s budget for fiscal 2013-14?
Copenhaver said the policy has been that those dollars remain in the county’s general fund and are used to pay for one-time expenses, such as new school buses, and not appropriated to cover recurring expenses, such as teacher salaries. If they are allocated for recurring expenses, he said, the county and school division could face the same dilemma next spring.
The anticipated “excess funds” of about $1.7 million might be needed to help pay for a new high school Career and Technical Education Center, Copenhaver said, a project one estimate suggests could cost about $50 million.
Copenhaver said there is about $12.9 million in capital reserves but said that money “is all appropriated to planned and committed capital projects,” including a new public safety radio communications system, economic development projects, two new public safety stations, the new landfill and the proposed Career and Technical Education Center.
The county’s financial advisers, Davenport and Co., have stressed the importance of maintaining prudent reserves and a strong fund balance for rating agencies and credit markets, Copenhaver said. The firm has observed that a fund balance “is the most basic and apparent measure of a local government’s financial strength and flexibility.”
Bill Brush, a school board member, has studied the county’s budget and has discussed his analysis, as an individual member of the school board, with several supervisors and county administrators.
Brush’s analysis suggests that the county’s policy of maintaining a minimum of two months of general fund operating revenues should be reconsidered. As one alternative, he proposed an annual risk assessment that could “adjust the undesignated fund balance as needed.”
Brush identified several other options that could yield additional funding for the schools.
He wrote, “The county could reallocate funds from its capital and general funds, adjust [the] employer healthcare contribution and offer employees higher deductible healthcare options, reassess county budget line items and reallocate revenues, or use a combination of these recommendations to fund the school budget request.”
He said related actions would not affect tax rates or degrade the county’s credit rating. Brush and others have observed that a comprehensive portrait of the county’s economic health must assess the strength and vitality of its public schools.
The board of supervisors holds a regular meeting at 1:30 p.m. Tuesday at the Franklin County Government Center, 1255 Franklin St., Rocky Mount.
The agenda does not include specific mention of the school funding issue. But Cundiff anticipates it will come up.
“There are some people who want to speak during public comment and I think their comments will elicit some discussion,” he said.
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