Plan of action

Published 11:14 am Thursday, April 6, 2017

WINDSOR – While the Bertie County Schools has reported deficit fund balances in its General Fund and the Special Restricted Fund, Superintendent Dr. Steven Hill appeared before the County Commissioners at their monthly meeting on Monday to outline the steps the school district is taking to move from the red to the black.

At the March Commissioner’s meeting, the Board requested plans for a solution and Hill presented options being undertaken that will reduce the deficit by first addressing the issues, and then putting the appropriate corrective action in place to move the district toward financial solvency.

The superintendent acknowledged the school system is the second largest employer in Bertie County next to Perdue Farms in Lewiston-Woodville with 576 employees, and an has an ADM student enrollment of 2,316 – an increase this term beginning with the second semester of 2016-17.

But over the past four years (2013-2016) dwindling enrollment has meant nearly $2.77 million in lost funding for the district. Over that same period, full-time employees rose by nearly 40 to 380 before falling back to around 345 in 2016.

“What happened was there was an increase in hiring in 2013-14 and then there was an attrition fall,” Hill noted. “So the idea was they went up and then they started coming back down. The issue is they lost $2.7 million; so it probably shouldn’t have gone up. It probably should have gone down.”

Hill thinks ‘Race to the Top’, the $4.35 billion U.S. Department of Education grant created in 2009 to spur and reward innovation and reforms in state and local education, possibly contributed to the hiring increase, though he would not count it entirely to blame.

“As you try to keep this many people employed, this is probably where some of it went,” he surmised.

The superintendent pointed out that despite a drop in enrollment, school staff was still retained.

“Basically with attrition as far as the students go, people were not let go at the time,” said Commissioners chairman JohnTrent.

Hill then discussed the district’s plan for Reduction in Force (RIF), breaking down the mitigating factors considered prior to that decision.

“75 percent of our budget is actually in salaries,” he noted. “When you put the rest in programs, you can probably imagine that 80-85 percent of what we do is actually in services and people. That’s where the money is.”

Hill acknowledged that four school systems in a large rural county with a small population is another detriment to the district’s budget.

“That takes on some of the impact,” he said. “Basically, as we’re allowing people to be released through attrition, we’re protecting the classroom; using some other dollars to try to keep teachers in classrooms and maintain that protective environment for the students, so teachers are priority-one.”

Hill said the disruption of students did not amount to a savings in the district budget because student/teacher rations are not balanced equally.

“The ratio is a 1-to-23 (teacher-to-student) that you have to meet,” he said.

He maintained that if you take so many kids out of the various classrooms, as the number of children leaving increases, a teaching position decreases.

“To meet our ratios, we still need the same amount of teachers,” Hill stated. “That’s why we’re trying to protect those teaching positions, and we have to kind of pull funds from different line items to make sure those teachers stay in those classrooms.”

Hill says most people don’t understand the way it works.

“They think it’s just simply, ‘Here’s your money, here’s your kids, see you next year’. It’s not that easy,” he noted.

The superintendent said though it was regrettable, RIF was the only option to resolve the current budget situation.

“We’re looking at every level,” he said, “the schools, the Central Office – administration and support, classroom teachers, and classified employees.”

Hill said these were just projections, but under that system the total staff reduction would be 28.5 positions, or 6.16 percent of the district workforce.

The Board of Education must appropriate nearly $705,000 in the current year to try and cure its deficit from 2015-16. Hill says the district can find that amount in expenditures and taxes not returned to the state, and in-kind funding (E.C., Child Nutrition and other things found on school campuses).

“Some of those things make up quite a bit of money,” he noted. “But that will be handled at the end of the year.”

Where the problem arises is reducing the operating deficit of $828,379 the Board of Education must find. This is what will likely violate state law in the current fiscal year for which a balanced budget is required.

For 2017-18, the board has to make up the projected deficit of $1.79 million, knowing it is facing state and federal cuts of $1.43 million and a reduction in funding of $360,000 due to charter school payments.

“That’s money we’ve got to find,” the superintendent said. “You’re looking at some counties that have to find millions of dollars.”

Hill says Department of Public Instruction officials that have reviewed the Bertie Schools’ plan and feels the district is doing all the right things and that deficit of the $705,000 could possibly be completed in about two years.

“We want to go ahead and pay (the federal side), clean them off the books, and make sure everything is audited free,” Hill said.

Lisa Rabon, BCS’s newly appointed Finance Officer, said the district has passed its other audits.

“The Medicaid audit came back fine,” Rabon said. “We’re waiting on the federal audit results. The Child Nutrition audit is scheduled in a few months, and there is our regular audit.”

Hill said he appreciates the support, that there are people working with the system on the deficit reduction.   As for making a claim on the surety bonds, there are still things to be worked out.

“We’re hoping to go back three years and get that out of it,” he replied. “We’re working towards it.”

Hill projects between $265,000-600,000 in savings for the district in a five-year plan beginning in school year 2018-19 if everything is put in place.

“We’re trying to save as many jobs as we can,” he reiterated. “I’ve talked to the director of the state board and the $828,000 divided out over the five years would be about $165,000 a year.”

Trent thanked the superintendent for sharing the deficit reduction plan with the Commissioners