10/25/11 Schools seek delay in public hearing
Schools seek delay in public hearing
County commissioners discussed dipping into fund balance
By Chris Lavender The Times-News 10/25/11
Reprinted with permission.
GRAHAM — Alamance–Burlington School Board Chairwoman Jackie Cole said Monday she was surprised to learn the Alamance County Board of Commissioners was discussing whether to dip into the school system’s fund balance to offset shortfalls in county revenue.
“It was a bit of a shock,” Cole said.
The commissioners discussed the county’s tax revenue shortfalls during an Oct. 17 meeting. County Manager Craig Honeycutt presented several options to the commissioners on how to cut county expenses to ensure its own fund balance doesn’t dip below state mandates.
The county had planned to use $1.9 million of its fund balance during fiscal 2010-11. However, the county had to spend $4.4 million of its rainy day money during the period to offset declines in sales and property tax revenue, as well as state shared revenue during the final months of the last fiscal year ending June 30.
Cole said she was aware the county had planned to discuss its budget shortfalls on Oct. 17, but didn’t expect the commissioners to target the school system’s $21 million fund balance to offset its budget woes.
“They automatically came looking at us,” Cole said.
Cole said the school system had worked to build its savings through conservative spending. Cole also said she had believed the county had planned to focus mostly on cutting expenses within its departments.
The commissioners had scheduled a public hearing for Nov. 7 to discuss whether to request the school system provide the county with some of its money to offset expenses. The Board of Education asked in a letter sent last Wednesday to Commissioner Linda Massey that the hearing be delayed until a joint meeting scheduled between the two boards on Dec. 13.
“Amidst the recent and ongoing discussions regarding potential budget cuts across our county, we would like to ensure that both the county commissioners and school board members have an opportunity to share information and ask questions about our budgets,” Cole stated in the letter.
“We feel that a discussion between both boards would be beneficial prior to a public hearing.”
Cole said she had received an email from county management that the public hearing would be delayed.
Massey said she didn’t have a problem with delaying the public hearing until after the joint meeting.
“If (the school board) just volunteers to give us the money then we don’t have to hold a public hearing,” Massey said. “We will decide after the meeting if we need to set a public hearing. It’s not critical right now — we are just planning ahead.”
Commissioners Tom Manning and Tim Sutton said Monday that they had no problem with delaying the public hearing either.
Manning said he hoped the school board would work cooperatively with the commissioners to resolve the budget issues.
Sutton said he had requested Honeycutt to provide the commissioners with a report of the county’s current fiscal year revenue trends.
The county sales tax revenue for fiscal 2010-11 was down $1.7 million, while property tax revenue was down $578,000. During the same period, the county also experienced a $1.9 million decrease in sales and services revenues and a $3.7 million decrease in state reimbursements compared to the previous fiscal year. The county has experienced a $2.1 million increase in combined tax revenue through the first quarter of 2011-12.
Commissioner Bill Lashley said during the Oct. 17 board meeting that the county should ask the school system to give it about $4 million of its $21 million available in fund balance. All of the school system’s fund balance is from county dollars.
Lashley said Monday he was willing to delay the public hearing to allow the school board time to share its concerns, but said he still believed the school system should provide the money.
The county received an audit report earlier this month that showed its fund balance was at $19 million, of which $5.3 million was reserved and $13.7 million was unreserved. These amounts were lower than what was expected by county management.
The state recommends that county governments keep their fund balances at no lower than 8 percent of their total budgeted expenditures.
Alamance County’s fund balance is currently at 9 percent, barely above the recommended threshold. It was at 12 percent in April.
Honeycutt met with department heads to develop a plan to cut expenses countywide. Based on the meeting, Honeycutt developed spending cut options which he presented to the commissioners Oct. 17.
The proposed cuts included a 3.75 percent internal cut for county departments equaling just over $2 million and a 5 percent funding cut for outside agencies equaling $1.9 million, both for the current fiscal year.