County's schools facing budget crunch

Sometime next week, Burke County Public Schools Finance Officer Keith Lawson will crunch together 30 Microsoft Excel spreadsheets and get his first detailed look at what the schools want and need for the 2010-11 school year.
The annual budgeting process is under way. And, tough as it was a year ago, this time will be even more difficult.
"The budget news," school board chairman Buddy Armour said recently, "is not good."
The school system gets its money primarily from three sources: the state of North Carolina, the federal government and Burke County's taxpayers. As the recession deepened and state tax revenues fell in 2008-09, the legislature and the N.C. Department of Public Instruction cut state support. They even asked schools to return unspent funds — roughly $900,000 in Burke County Public Schools' case.
Anticipating state cuts, Lawson and Associate Superintendent Rick Sherrill in February 2009 surgically examined the schools' budget for possible cuts. They spent a month in a series of one-hour one-on-one meetings with principals and department heads, scrutinizing every dolalr. The school board ultimately approved about $6.1 million in budget reductions.
Lawson won't repeat that fine-toothed-comb exam this spring. He explained. "Those cuts have been made; they can't be made again."
Instead, he and Superintendent Dr. Art Stellar prepared a budget template for the school principals. It asks in effect, what's your rock-bottom need. What would you like to have? And, if you have to accept even less, what will be lost?
The district as a whole faces at least two massive budget challenges next year in addition to whatever further cuts the state orders.
Last year's savings on operations weren't enough, Lawson said. The state actually cut the schools' funding by about $8.3 million.
To preserve as many people's jobs as possible, the people who hold teaching certificates agreed to take only half their local supplemental salary (equal to 2.5 percent of their state wages instead of 5 percent) for one year. In addition, the school board cut the classified staff's hours — maintenance and custodial workers, clerks, secretaries, etc. — by about 6 percent to 37.5 hours and cut teaching assistants' hours to 35 a week.
Altogether, that freed up about $2 million in FY 2009-10 to all but avoid layoffs. There are fewer teachers today than a year ago, but most vacancies are due to retirements and resignations.
One challenge for FY 2010-11 is whether to restore those salary cuts and, if so, how and where to find the funds.
Board members Sam Wilkinson, a former teacher and coach, and Susan Stroup, a retired principal, both made it clear back in December that restoring the salary cuts is a priority for them. They held up the schools' proposed capital-expenditure budget to make their point.
"I see a lot of sacrifice all through here," Wilkinson said last week after Lawson went over the current budget. "They did what they had to do. That's teamwork. I think it's our job to see it was not done in vain."
The other major challenge for 2010-11 appeared when the school board in August 2009 sued the Burke County Board of Commissioners for more money to operate the schools.
Superior Court Judge Donald Bridges ultimately awarded the schools a few tens of thousands of dollars, saying the school district proved by opening its doors in August that it could operate with the $14.1 million appropriated by the county commissioners.
The school board's attorneys unsuccessfully contended that opening Patton and Draughn high schools added about $2.1 million annually to the school system's operating costs without any more funds coming from the county.
The 2008-09 audit, presented to the school board in January, drove home the point. The schools have finished the past two fiscal years in the red. They balanced the books by drawing down the fund balance, as ordered by another judge four years ago. By the end of 2008-09, however, the fund balance was $500,000 awash in red ink.
"Lack of funding to operate two new high schools is inexcusable," board member and former board chair Tim Buff said last week. "It's time this situation was dealt with. There's only so much we can do without money. If we're serious about this being the No. 1 school system (in North Carolina), it's going to take some money to do it."
Stellar said last year's savings initiative and a more recent energy conservation and efficiency program have reduced the two new high schools' operating costs somewhat, to $1.8 to $1.9 million, but he agrees with Buff that a solution must be found.
Inevitably, the focus of attention will turn to the county board of commissioners. It, not the school board, controls disbursement of the taxpayers' money.
Armour said he and two other school board members recently talked with the county commissioners about the looming budget situation.
"I think they appreciated that we met with them now rather than blindsiding them in May," Armour said. "We tried to emphasize we cannot dig ourselves out of this hole by ourselves. They stated they will do everything for us that they can. We all want our county to grow because of our school system, not in spite of it."