The next step in the process is Wednesday’s meeting of the Budget Committee of the Sullivan County Commission. That’s because the commission funds and ultimately must approve the BOE’s budget proposal.
In a work session before the regular school board meeting Thursday, both held virtually because of the COVID-19 pandemic, school system Business Manager Ingrid DeLoach laid out the budget recommendation, with a bottom line of spending almost $84.9 million, or $84,892,091 to be exact.
However, the BOE during the voting meeting unanimously approved a motion by Vice Chairman Randall Jones, seconded by Matthew Spivey and supported by Mark Ireson, to increase a proposed 1% raise to a 2% raise for employees since Gov. Bill Lee’s budget put that amount in, but only for the minimum number of teachers required by the state.
That doubling of the raise increased the budget expenditures line by about $450,000. Here’s a rundown of details in the budget approved Thursday night:
WHAT ARE REVENUES?
The projected revenues for fiscal year 2020-21, which runs July 1, 2020 to June 30, 2021, are $79,532,783. DeLoach said that is based on some guesses in revenues, particularly sales taxes, since the effects of the quarantines and business closures and curtailments in response to the coronavirus are unknown in both finishing out this fiscal year and going into next fiscal year.
However, the budget proposal projects a 5% loss in local option sales tax because of the effect of the pandemic.
The proposal also projects a 2% loss in the city-county split on weighted average daily attendance or ADA, an estimate also made last year that led to a standoff between the commission and school board that was headed to an October shutdown of schools until the two sides agreed to a compromise suggested by the state comptroller of the treasury.
The actual loss in weighted ADA ended up to be much less, so the commission didn’t have to fund any shortfall, but county school officials said that was only because of an unexpected dip in the Bristol school system’s weight ADA. (The county, Kingsport, Bristol and Johnson City, which annexed a small section of the county, share revenues based on total ADA among the students all four have inside the county, a pie that gets smaller if the overall group’s attendance decreases.)
The school system will see a double whammy from the Basic Education program: a projected loss of $106,000 and a requirement to increase instructional salaries by $365,000, DeLoach said.
WHAT ABOUT EXPENDITURES?
In addition to that instructional salaries increase mandate, the budget proposal includes 2 percent raises, the regular “step” increase for longevity and a 5% health insurance increase projected for Jan. 1, 2021, for half the fiscal year.
In addition, the budget is to add 7.5 new teachers, including ones needed to make related arts equitable across the system, especially in elementary grades; one new technology employee; and a public information officer position the system has never had.
WHAT ABOUT THE DIFFERENCE?
Since the expenditures of about $85,292,091 exceed revenues by some $5,159,303, the more than $5.1 million shortfall would be covered by the unrestricted fund balance and another $650,000 from restricted reserves.
With about $2 million from the current budget projected to go back into the unrestricted fund balance by June 30, DeLoach said that taking more than $5.1 million out of that would leave some $7.3 million in the fund balance.
The state recommends keeping 3% ($2,546,765) in the unrestricted fund balance, so DeLoach said the school system would have money to meet cash flow needs as well as unexpected emergencies.
WHAT ABOUT RENOVATIONS/REPAIRS?
The budget also requests funding from the commission for renovations and capital improvements for the year totaling more than $3.1 million. That is double the normal $1.6 million the commission used to appropriate to the school system until it decided to remove the funds, DeLoach explained.
The capital budget includes year one expenses of the Five-Year Capital Improvement Plan of $1.79 million along with “regular” renovation expenses of $1.177 million for a total budget of $3.147 million.
The five-year plan would peak in 2021-22 with $6.975 million, including $6 million for heating and cooling repairs at what is Sullivan Central High but is to become a middle school; $3.54 million in 2022-23, not counting a water line for Rock Springs Elementary with no cost estimate yet; $2.53 million for 2023-24 and $4.4 million for 2024-25.
A recurring school in three of the five years of capital projects is Bluff City Elementary, an older building in line for $4.95 million in work.