FRANKLIN
On Monday night, Franklin City Public Schools Superintendent Dr. Willie J. Bell was before city council again asking to use funds set for next year to help finish up this year’s budget. This time, Bell said if council did not grant this request, the school would certainly finish the year more than $262,000 in the red.

City Manager Randy Martin said there would be consequences on each entities’ financial report, and perhaps that could even extend to credit ratings, should the school finish the year with an unbalanced budget. Complicating matters, the requested funding source was carryover money that had already been approved for the 2015-16 budget, which would mean reducing that budget by the same amount. The school board had approved for Bell to request the entirety of the carryover funds remaining, $343,545.

“I expect this will have a significant adverse impact on the School’s FY 2015-2016 budget, but it is also essential that school officials finish the current fiscal year with adequate funding to meet obligations,” Martin said.

City council ultimately approved providing the full amount requested, 7-0, but they also required that the school board reduce its 2015-16 budget by the same amount so no double-dipping into funding that does not exist could occur.

FCPS Finance Director Rachel Yates said her projected shortfall is $262,272.07. In response to Ward 6 Councilman Frank Rabil’s question about why the school board is requesting $70,000 more than the projected shortfall, she added the figure, which is mostly related to meeting the end of the year payroll, is fluid.

“We have a lot of unexpected payroll expenses at the end of the year,” she said. “We are receiving resignations daily.”

And if someone moves on from the system, there is an obligation to pay any leave that might be on the books.

“For that reason, I think we figure it is better to be safe than sorry,” Yates said. “We didn’t want to have to come back to you at the Nth hour and request more. By no means will we run out in the next eight days and spend the rest of the $70,000.”

Martin said any carryover would automatically come back to council, and that it could be re-appropriated to the 2015-16 budget or moved forward to the 2016-17 budget.

“This is not an exact science,” he said. “When we do our budget, we try to show the worse-case scenario. It is even harder for the schools, as they receive funds from so many sources. There are a number of factors that may not be known until after June 30.”

The final budget for 2014-15 would not be complete until after Sept. 15, as Yates will submit a report to the Virginia Department of Education, and auditors will determine the final carryover money.

Yates added that even though it concerns payroll, the city would not allow the checks to bounce.

The problem would just be that her books would be unbalanced, in that expenses were more than revenues, which would have brought penalties from the state.

Rabil asked her how long they have known about the potential decrease. Officially, VDOE sent a letter to them on June 9 giving them the final decrease due to actual enrollment being 41 students lower than projected enrollment. That figure accounts for around $253,000.

However, Yates said she brought this issue to Dr. Bell on July 1, which was the superintendent’s first day. After seeing an average daily attendance decrease each year, she anticipated that the figure of 1,150 students, which the state used as an estimate to determine funding, was high.

“We didn’t even start September with 1,150 students,” she said.

If the system has known from the beginning of the year that a cut was likely, Vice Mayor Barry Cheatham wondered why more wasn’t done.

Bell said once the Sept. 30 count came in and was lower than projected, he said he began to freeze a lot of items in the budget.

“I believe if we hadn’t begun that in October, November, that the number would be higher than it is now,” he said. “I was proactive because I just had a feeling that it would continue to drop.”

Ward 4 Councilwoman Mona Murphy said she believed that Bell was very frugal in showing that foresight. However, as they were talking, Ward 2 Councilman Benny Burgess, a Franklin accountant, did some math. Knowing that the projected shortfall is $262,000, and the state’s decrease is currently $253,000 of that, he said if they had truly cut, the shortfall would be less than $253,000, not higher.

Burgess added after further looking over the numbers, that if he understood them correctly, the schools had spent $20,000 more than they projected to at the beginning of the year.

“That says to me that they didn’t really cut,” he said, when Murphy questioned him. “If you are trying to cut the overall budget and you cut office supplies by $10,000, but you add $30,000 elsewhere, you are not really cutting. That’s what I see.”

Yates confirmed that the $20,000 in additional spending was accurate, and Murphy attempted to change the subject.

“All that said, we are going back and forth, with everyone trying to understand what is going on, and what school board has done with the money,” she said. “Unless there are questions, we need to move forward.”

She added praise to the schools for what they have accomplished this year, and said that she couldn’t wait to see the Standards of Learning scores. She anticipated them to be higher than the previous few years.

Bell, on the other hand, decided to address Burgess’ question.

“We cut as much as could in line items, but we are already bare bones,” he said. “I did not want to cut personnel at all. God knows, we have one of the best staffs in the state of Virginia. I don’t ever want to cut people.”

Though he did add that as people retire, he would consider making cuts through attrition. Of that, he anticipates savings to come over the next several years.

Ward 3 Councilman Greg McLemore had one final concern: the strings that council was placing on the school board, with Bell not having had time to review the resolution. With School Board Chair Edna King and Ward 3 representative Andrea Hall-Leonard present, he asked them first if they believed this request should be granted.

“I remember even when Dr. Bell came to you last August, he mentioned the enrollment and that possible reduction. It was very close to that number of 41,” King said. “I am asking you to honor the resolution. We can make reductions in what we are planning to do without really having a very devastating effect on instruction. We will make it work.”

McLemore, who had been attempting to simplify the meeting for constituents all night with fears that many do not understand what council is talking about, asked her if she answered his question. When he was interrupted by a member of council, McLemore said that he believed King did after a long-winded response. Then he posed the same question to Hall-Leonard, but Mayor Raystine Johnson-Ashburn denied that request since the word from the chair was sufficient.

King said that the school board did not have any trouble with the resolution as had been presented. Both entities had to have a balanced budget at the end of the year, and King said that they would respect the will of council concerning reducing the 2015-16 budget by the amount the 2014-15 budget increased to cover the shortfall.

“I want the school board to know that there will be no money like this to access next year,” Cheatham said after approval. “I want to make sure you understand that this is the bottom line.”

Bell thanked council for providing the funding.

“We will continue to be stewards and transparent like we have always done,” he said. “I know that this is going to get better.

“When I made my statement at the reception when I was brought in, I said it will take a family to get this straight. Even though we have had our disagreements, I still consider you family. Family will have disagreements, but at the end of the day, just like today, we can come together for the common cause. We are all flying in ‘V’ formation.”