Burke County school board defends fiscal decisions

The Burke County school system struggled under siege from late winter through the early days of summer in 2009.Continuous impacts battered the district's walls while a small company of administrators, armed with little more than their wits and their networked computers, waged a desperate effort to defend 14,000 children in 30 scattered schools.
Three central figures in that struggle recounted the story Thursday and Friday in Burke County Superior Court where the school board's lawsuit against the county commissioners finally got under way.
The witnesses were then-Associate Superintendent, now acting superintendent, Rick Sherrill; Finance Officer Keith Lawson; and Board Chair Tracy Norman, who will return to the stand Monday.
The first fiscal assault rocked the schools in December. North Carolina's state government, running short of revenue while national recession worsened, ordered schools to "revert" (meaning send back) more millions in state funds intended for educators' salaries. Burke County withdrew more than $500,000 money out of its already depleted savings.
In February, fearing that the school system possibly faced two years of financial deprivation, the Burke County administrators began planning to cut other expense in order to protect the classrooms and preserve vital jobs. "What do you need to survive?" they asked the principals, department heads and directors. Scrutinizing every line item in the schools' multi-million-dollar budget, the administrators proposed paring $6.5 million from expenses.
Rumblings of further cuts thundered like an artillery barrage launched from Raleigh. Cut more, cut more — first three percent, then five and eight and, finally, 11 percent. That might mean eliminating more than 110 jobs. Local school administrators called that last "the worst worst-case scenario."
"We were striking the bottom of the barrel in terms of what we could anticipate saving," Lawson said.
While the professional education administrators fought the state government's fiscal siege, a different battle engulfed the county. This internecine conflict centered on the Burke County Board of Education, an elected group of seven citizens entrusted — and increasingly distrusted — with the duty to maintain a system of free public education for the county's children.
During the last three months of the schools' fiscal year, city councils, county commissioners, business groups and church leaders joined the citizens' chorus of criticism. On April 2, Norman testified, county board Chair Ruth Ann Suttle called her and threatened financial repercussions if the school board fired Superintendent David Burleson.
In this drama, Burleson, like Hamlet's father's ghost, appears rarely on the courtroom stage. As Judge Donald Bridges explained, "Many folks would like this lawsuit to become a forum on the wisdom or lack thereof" in the board's decisions about Burleson. "I'm not going to make this court a referendum on that decision."
The lawsuit is no more about Burleson's termination than "Hamlet" is about the king's murder. (By the way, you can tell your children this is why they should study "Hamlet" in school.) The lawsuit is about how much money is needed to operate the schools.
Sherrill and Lawson described a chronically underfunded school system whose fiscal foundations rapidly eroded after the district opened Patton and Draughn high schools in 2007 and 2008 and thereby added $2.2 million to the district's local operating expenses. During that time the county commissioners did not give the school district any more money.
Did the school board ask for more? the county commissioners' attorney, Larry McMahon, asked both administrators.
No, they said, the school board did not.
Sherrill, Lawson and Norman all said they felt the schools' budget requests were constrained by the 2005 consent decree — a sensitive topic on which Judge Bridges often limits discussion by upholding the defense's objections. (Bridges has not ruled yet on the school board's effort to have the county commissioners held in contempt for not complying with the 2005 court order).
All three said school administrators felt they had to keep the local expense budget within $14.1 million or 43 percent of Burke County's anticipated property-tax revenue in 2009-10. All three said the 2009-10 budget was not based on the schools' actual needs, but rather on what they thought they could get.
"You understated the needs of the schools — the needs of the operating budget?" McMahon asked Lawson during cross-examination.
Lawson: "Yes."
McMahon: "That is a violation of your duties as a finance officer, is it not?"
Lawson: "Yes, sir, I suppose so."
The threats of further cuts continued, but the school board got a bit of good news in March. The county's fiscal officer indicated Burke County would give the schools a percentage of the actual property-tax revenue from 2007-08 and 2008-09 in addition to money previously appropriated based on anticipated revenue. It would total $487,000.
Norman said she expected the schools would receive the money in addition to $14.1 million from 2009-10 anticipated tax revenues. For some undetermined reason, though, the school board never budgeted the reconciliation money for 2009-10.
The schools received worse news in April. Although the actual date wasn't established in court, Lawson learned on April 30, during school finance officers' meeting in Raleigh, that the N.C. Department of Public Instruction intended to order another budget reversion in June. The amount for Burke County Public Schools would be $392,000 to $535,000.
Burleson passed on the news to the school board about nine days later, on May 8.
The school board endorsed its 2009-10 local current expense budget one week after that. The reversion order came on June 5. The schools transferred the money out of the fund balance, reduced it to about one-third of the $1.2 million it should be, according to Lawson.
Desperate for dollars, the schools in June shored up their crumbling fiscal walls with a last-ditch cost-saving measure. Teachers agreed to give up half of their local supplemental salaries in 2009-10 and the school board ordered the non-certified staff's hours reduced by six percent. Sherrill and Lawson said they saved jobs, but at the probable cost of quality teachers and other staff who will migrate to better-paying jobs in surrounding counties.
Despite or because of being in fiscal straits, the school board on June 30 accepted Burleson's resignation. About 10 days later it approved spending $126,000 to buy out his contract. The board also appropriated $12,000 for its annual membership dues in the N.C. School Boards Association.
Why did it spend that money? And why didn't the school board ask the county commissioners for more money?
Those are the questions whose answers may emerge when the trial resumes at 9:30 a.m. Monday in the courthouse annex, 201 S. Green St., with board Chair Tracy Norman on the witness stand.