Members of the Budget Committee of the Carter County Commission went to school Thursday night.
They learned that the county’s fund balance is at its lowest point in several years, and that they will need to increase the county school system’s budget by nearly $100,000 to meet state funding requirements.
The county Highway Department and the School System presented their budget requests at the meeting, and the committee also heard a report on the county’s fund balance during its budget workshop.
The county’s fund balance is at its lowest point since the 2010-2011 fiscal year, according to Carter County Finance Director Ingrid Deloach. She said the fund balance is in its current state because expenditures are higher than revenues and the county has continually dipped into the fund balance in order to balance the county’s financial budget.
In addition to the depletion of the fund balance, Deloach said that the county is also faced with a deficit in the county’s Debt Service fund, again attributing the cause to expenditures being higher than revenue.
This fiscal year two major debt service notes came off the county’s books – the note for the Animal Shelter and the note for the Cloudland school – which Deloach said helped ease some of the strain on the fund balance.
“We cut our deficit in half but we still have a very large deficit in the fund balance,” she said, adding that it would take $955,924.44 – or a tax increase of 12 cents – in order to balance the debt service budget.
County Commissioner John Lewis, who is not a member of the Budget Committee but was in attendance at the meeting, asked Deloach how the county could end up in such a financial strain.
“How we got in this situation is that instead of raising the tax rate, we took the money out of fund balance,” she said in response. “We have eaten away our savings.”
Discussion returned to the Cloudland school construction debt service note during the presentation of the School System’s budget request.
As part of the budget request presented by Carter County Director of Schools Kevin Ward, the school system is asking that the funds set aside in the 2013-2014 fiscal year budget for the payment of the Cloudland note be left in the school’s control to facilitate the construction of a new middle school in the Stoney Creek community to service Keenburg, Hunter and Unaka Elementary Schools.
Ward said the estimated cost for the proposed middle school is approximately $16 million. He added that construction of the new middle school would not only eliminate crowding issues at the three feeder elementary schools, it would also eliminate 21 of the 48 modular classroom units currently in use by the school system.
The director also asked that the Budget Committee approve the purchase of the proposed property for the new school at a price of $200,000. Ward said the money to purchase the property would come from the school system’s referendum money and would be no additional expense to the county.
The site proposed for the new school is located on Highway 91 near the Elizabethton Airport and is next to what is being called “the Frank Shaffer” property. Ward touted the utilities already present at the property – sewer line, natural gas and a 6-inch water line – which he said would save on construction costs for the new school facility.
Ward also presented a budget increase request of $96,149.25 – which he said was needed in order to meet state funding requirements. He explained to the Budget Committee that under state funding requirements, the school system is required to meet a “per pupil” expenditure goal in order for their budget to be approved by the state. The local contribution for the Maintenance of Effort – or MOE – is $1,879 per pupil.
Ward reported that sales tax collections have seen a sharp decrease and that additional funding from the county in the amount of $96,149.25 is needed in order to reach the MOE funding goal. He said that the funding goal must be reached before the state will approve the school system’s budget, and without a budget approved by the state the local school system cannot obtain any state funding for the system.
The Highway Department presented essentially the same budget request as last year. The only increase asked for by the Highway Department was for $2,737 under the line item for office equipment.