Schools could ask Grayson for $1M more

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School administrators say the system can't continue operating with funding cuts every year.


INDEPENDENCE — The Grayson County School Board is considering asking the county for $1 million more in local funds than it received this year to make major repairs at some schools, increase teachers' salaries and prevent further cuts to educational opportunities for students in 2011-12.
During a work session March 7, Superintendent Dr. Elizabeth Thomas outlined two options for the school board to consider:
• present a proposed 2011-12 budget to county supervisors that includes another round of cuts and even less money that the school system got this year. That proposal — a $19.78 million budget — would include nearly $4.3 million in county funds. Grayson schools' 2010-11 budget is $19.86 million and includes $4.18 million from the county. Overall, Grayson schools face a minimum $154,000 shortfall.
• ask the county for more money, which administrators recommended.
“We would like the school board to consider asking our locality for additional funds,” Thomas said. She asked the school board to consider making a request for an additional $906,106. That amount would offset the $154,000 budget shortfall and include $752,000 to address major repairs at some schools, purchase new textbooks and three new buses.


However, the amount does not include any raises for employees, something school board members rebelled against. The board asked Thomas and administrators to prepare estimated costs for 1 percent and 3 percent raises. Thomas said a 3 percent raise for all employees would cost about $400,000.
The Grayson County School Board held a public hearing to receive budget requests Feb. 14 and held two work sessions in recent weeks to consider the school system's 2011-12 budget, which administrators delivered via presentations titled “Education Cuts Never Heal.”
“Our school system is dedicated and focused on increasing the achievement of all students by providing rigorous education programs and high-quality learning experiences,” Thomas said. However, years of budget cuts are closing in and directly — and negatively — affecting students, Thomas said.
School officials seemed to agree that students are hurting for courses and materials following major budget cuts over the past three years. They also indicated that they are in favor of  pursuing more money for county schools.
But, with state and federal funding sources dwindling, any additional money would have to come from the county.
Grayson dedicated about $4.18 million toward the school system's operating expenses this year, meaning the school system could request more than $5 million in local funds for 2011-12.

Education cuts — the money
For the past three years, Grayson's school budget saw a 23 percent cut in state funding — more than $3.5 million. That trend continues: a state budget approved Feb. 27 gives Grayson about $154,000 less in funding compared to this year's budget.
These cuts are “incredible for a division as small as ours,” Thomas said. “This is huge. There's no way you can take that much out of a budget and not hurt the students. No way.”
County funds for the school system's operation also have dropped over the past three years by about $1.35 million — from $5 million in 2006-07 to $3.7 million in 2009-10.
“Is that the minimum?” Chairman Hobert Bailey asked.
“If [the county] did give above, then it wasn't by much,” Finance Director Julie Bear answered.
The county typically provides what school officials call “minimal funding,” also known as local required effort, an amount required to secure all available state and federal funds. In the past, supervisors have taken issue with the term “minimal,” saying that true “minimal” funding is actually a lesser amount of money that would fund only Virginia's Standards of Quality, fundamental requirements for public education as outlined by state law.
Grayson County Administrator Jonathan Sweet said that the county typically provides around $50,000 annually above “minimum” funding.
“Typically [the school system's] level of funding drops based on an overestimated Average Daily Membership,” Sweet said. “The county does not typically down-adjust the funding budgeted to the school system based on a lesser required match; [Grayson  has] historically given them the approved amount.”
According to projections from the Virginia Department of Education, Grayson's ADM for 2011-12 is 1,866 students.
Thomas noted that surrounding localities give farm more than the local required effort — some as much as $2 million more. “We are persistently underfunded by our state and locality,” Thomas said.
Bear noted that a major challenge is that the state looks at school systems as  simply figures on paper. For example, in regard to funding, the state recognizes that the Grayson school system has about 2,000 students and bases its monetary contribution on that number; it doesn't consider the county's geographical size or the number of schools dispersed throughout the area, she said.
School Board Member Gary Burris noted that though the Grayson County Board of Supervisors approved a 44 percent increase in its real estate levy for 2010-11, Grayson schools saw no increase in funding for the school system's day-to-day operations.
Members said that many citizens erroneously believe that the tax hike was needed solely to fund the school system's operation and/or to pay for Phase I facilities improvements, including construction of Grayson Highlands School and Fries School renovations. Thomas noted that covering debt service on Grayson Highlands School and Fries School renovations is the equivalent of 2 or 3 cents on the levy.
According to Sweet, the county is paying a budgeted $1 million annually for Phase I construction.
The county secured $18.3 million in temporary financing until literary loans become available or other permanent financing is acquired, Sweet said. For now, the state has suspended its literary loans, a subsidized program that typically allows localities to borrow money for school construction at reduced interest rates, historically around 2 percent.
When the county secures permanent financing, depending on the interest rate or term of the loan, the budgeted amount could go up, Sweet said.  
The county is making interest-only payments now. “The county does, however, plan on applying any of the remaining balance of the $1 million [budgeted amount] toward the principal of the note within this fiscal year,” Sweet said.
Thomas said that “the construction and capital improvement of public school facilities is the responsibility of the local government and is entirely separate from operational costs.
“Operational funding only provides the services to educate our students on a daily basis, which primarily includes teacher and support staff salaries, transportation, and instructional materials,” Thomas said.
She noted that Grayson has a “relatively small debt service obligation in comparison with surrounding counties.”
For example, Carroll County has completely renovated six schools and constructed one new school in recent years, she said. Carroll is “nearly ready to begin their last school construction phase, which involves two renovations and additions,” she added.
“Although Carroll County has much greater debt service than Grayson, they continue to fund their school operational budget above the state's required amount,” Thomas said.
The need for Grayson to invest in school facilities is “critically necessary... We have used our aged facilities to the maximum extent,” Thomas said. “Our school buildings must be repaired and maintained to prevent even greater costs to the taxpayers.
“One of our reasons for constructing new facilities was the cost avoidance factor. We have been cautioning for years that our older facilities are in very poor condition.   Ultimately, the cost of maintaining aged facilities is expected to surpass the cost of constructing new facilities.”
Sweet said that Phase I improvements should translate to efficiencies and cost savings within the school system. “That cost savings was supposed to be enjoyed and utilized by the school system. It is looked at as an indirect contribution to the schools' operating budget, as the cost savings enjoyed does not reduce their funding, but should give them greater discretionary spending.”

Balancing the Budget
If the school board were to request only the local required effort, (the amount of county funds required to secure all state and federal money) then it would be looking at a shortfall of $154,000 .
To offset those projected 2011-12 budget cuts, administrators gave school board members two options:
• eliminate three instructional days (from 180 to 177 days)  — an average 1.2 percent pay cut for all employees. This would save the school system about $181,000.
• eliminate high school course offerings and positions at Grayson Highlands School for a savings of $195,000.
The school board did not discuss these options.

Return on Investment
“We strive to ensure that all students acquire the knowledge and skills necessary to be successful in post-secondary education and the globally competitive workplace,” Thomas said.
Highlights of the school system's successes include: 100 percent fully accredited schools, increases in AYP achievement and increases in CATE program industry certifications. Officials also noted that 73 percent of students pursue post-secondary education; students can participate in an associate's degree program of studies; and that Grayson students have a high college success rate.

What Happens Next
“We've got a task in front of us,” Bailey noted, but said that he knows the board and administrators are up for the challenge. “Times have been tough for Grayson County schools for a while.”
A tentative budget approval was scheduled for Monday. If approved, that budget would then be submitted to the county for consideration.
The Grayson County School Board and the Grayson County Board of Supervisors will then hold a joint meeting to hash out budget details. That meeting is tentatively scheduled for March 28.