NEWBERRY — First reading of the 2014-15 budget for the School District of Newberry County passed unanimously Monday night but not before board members debated increasing millage rates to offset possible use of fund balance to meet budget obligations.
The board, by law, has latitude to add up to a 4 mil increase or 1.46 percent on top of the current number of mils (currently 186.8), whichever is less.
Under that formula district CFO Susan Dowd said the board could levy up to 2.73 actual mils.
Adding one additional mil would add $76,734 of additional recurring revenue and adding 2.73 mils would add an estimated $199,009 at a 95 percent collection rate.
A combination of cuts and millage change could have placed the district within $14,642 of meeting the current proposed budget.
With no mil increases the current budget contains a $213,651 difference in revenue and expenditures for 2014-15.
Board Chair Jody Hamm pointed out the board had increased the millage rate by 2 mils since 2010 when it could have increased it up to 16 mils. Hamm said he viewed fund balance use as an option for extra expenses that occur beyond what is budgeted and that the use of millage versus fund balance for spending merited discussion.
Last year the board spent $700,000 from fund balance and this year Dowd projected $200,000 of fund balance expenditures.
As of June 2013 the audited fund balance was $11.8 million.
“I don’t want to increase the millage,” Board Member Lee Attaway said, “but we have gone a number of years with only a two mil increase. This is recurring money could never recoup and I think is something we should start looking at. I just don’t want us backed into a hole.”
A millage change of 2.73 mils on a $100,000 home at the current assessment rate, not the new one still being tabulated by the county, is a $14 to $15 increase.
But board members said they are mindful of vehicle taxes and businesses and second homes where taxpayers bear a greater burden.
Dowd said she hoped increases in estimated delinquent tax revenue and in total budgeted local revenue would help the district meet expenditures under the proposed budget, one that does not include a millage increase.
A challenge this year is applying approximately $630,000 of additional revenue to offset changes in state allocations of Education Improvement Act (EIA) Funds and Education Finance Act funds (EFA).
Dowd said the state allocation changed such that EIA funds decreased and some expenses therefore were shifted to EFA funds. The bottom line for the district is approximately $600,000 reduction in funding, so that must be made up somewhere else.
The Legislature remains in session, so she said revenue projections still might change.
Dowd hoped to have firmer revenue numbers at the public hearing on the budget on June 9 or at the next scheduled board meeting, June 23.
At the projected base student cost of $2120, and while factoring in total revenue from all other sources, Dowd reported an increase in projected total revenue of $2,797,266 over last year’s revenue.
Dowd also said auditors are analyzing growth in the county but final numbers will not be available until September or October. At this time she was unsure how such growth would affect the district. The other variable is county tax reassessment which is ongoing and would affect revenue.
First reading of the budget, containing a $213,651 difference in revenue and expenditures but no mileage increase, passed unanimously.
Revised board compensation passes
The board also discussed second reading of a revised compensation policy based upon a motion passed in 1999 that school board compensation be a percentage of county council’s pay.
Board member Clyde Hill amended the proposal from the 70 percent rate he initially proposed during first reading to be a 50 percent rate of county council compensation.
Board member Hugh Gray spoke against the policy.
“I disagree because I don’t think our compensation should be tied to someone else. If we feel we need a raise it’s on us to propose that. We should not hide behind someone else,” Gray said.
Hill took issue with that terminology saying his efforts were merely an attempt to reconcile an approved motion to make board compensation a percentage of county council, not an effort to hide or shirk responsibility.
“We are not hiding, Mr. Gray,” Hill said. “This was done (in 1998). It’s a matter of us making some adjustments. we are not hiding behind anyone else.”
Lee Attaway, who like Hill was on school board when the measure was passed originally, explained why pay was tethered to county council instead of another entity.
“The next level of local government (for funding issues), that we have to go to would be county council, so that is why we chose to (tie the rate) to county council,” Attaway said.
Attaway was in favor of tying board pay to county council pay levels because he said it would save the board from having to deal with adjusting salaries in the future.
Board member Ike Bledsoe said he preferred to have a set figure rather than tie board compensation to another body, such as a percentage of county council salary. In the end, he voted for the motion, however.
The revised motion which tied board compensation to 50 percent of county council salary passed 5-2. Hugh Gray and Lucy Ann Meetze opposed the motion.
Second reading of the board compensation policy passed 5-2 with Gray and Lucy Ann Meetze voting against the policy.
At the 50 percent rate of the current county council salary, the board chair would earn $7076 and each board member would earn $5,997 per year.
For more information about the school board meeting, including updates on construction and a more detailed breakdown of expenses in the proposed budget for 2014-15, see the Friday edition of The Newberry Observer.