As Sampson County School leaders wait to receive a budget from the state, operations are planning to move forward through a continuing resolution.
Stephen Britt, SCS finance officer, recently presented an update on the district’s budget situation, which doesn’t include federal or state numbers for the 2018-2019 fiscal year, scheduled to start July 1. During a meeting for the Board of Education, Britt said he hopes to have information by the end of the summer. A continuing resolution would give the district permission to spend up to 85 percent of funding levels from the 2017-2018 budget, which is more than $83.53 million. It also allows the district to continue with approved projects.
“This allows us to operate until the state gives us a final number,” Britt said.
According to a budget amendment, the budget from the last fiscal period is made up of state funding ($55.37 million), local ($11.47 million), federal funds ($6.33 million), capital outlay ($4.36 million), and child nutrition ($5.98 million).
Superintendent Dr. Eric Bracy added that the final budget will replace the continuing resolution.
“Well have detailed conversations based on the budget,” Bracy said.
Sampson Schools finished 2017, with $1.2 million in available fund balance, which money leftover after everything’s paid off. The district should be able to add a small amount in 2018 through refunds and position reductions. Britt said the idea amount for the fund balance is between $2 million and $2.5 million. He called it a “Goldilocks Zone” of not too hot or not too cold.
“If you go to low, you can start running into cash flow problems,” Britt said about budgeting for expenses and not having funds to pay.
Another reason to have cash available is because of reimbursement based programs.
“We upfront the cost or upfront the expense for it and then we request reimbursement from the county,” Britt said regarding needs such as capital outlay projects and the Upward Bound program, which helps low-income students with college goals.
Although the district is waiting for budget numbers, Britt presented a few expectations from state officials. Some of them includes pay increases for teachers, principals and classified staff. Britt noted that increases for teachers target teachers with about 14 years of experience and leaves out other teacher with more experience.
“If you’re at a step 23, you’re kind of left out this year and it’s not your year to get a pay increase,” Britt said. “In fact, they would be the only people in the State of North Carolina not getting raises. Every other state employee will get a raise, except for a certain group of teachers. That’s one of the unfortunate part of state raises. While some are making out with a larger increase, there is a group that going to be missed.”
He continued and said the district is not expecting major budget cuts like the last fiscal year.
“However, we’re not expecting enough overall increases in funding to support our salaries and benefits costs,” Britt said. “Our state budget is roughly 94 percent salaries.”
Britt said the state budget needs to move up by 5 percent or 6 percent to offset the state mandated raises and salaries. Federal funding is largely unknown, but large significant increases are not expected.
“Neither federal nor local increases are going to be enough to support the state salary raises,” he said.
Britt also went over the hike in health insurance and retirement costs over a decade. According to estimates health insurance for a full-time employee was more than $4,000 and in 2009, it’s expected to go up to $6,000 — a 47 percent increase. SCS spends about $6.5 million per year on health insurance matching. The biggest change is coming through retirement, with a 18.8 percent match for 2019 — a 131 percent increase from 10 years ago. During the next spending period, the district is expected to pay $8.2 million in matching retirement funds.
While presenting funding trends and salary expenses since 2011, Britt showed 2018 figures showing a combined budget with state, federal and county funds at $73.18 million, compared to the $74.40 million seven years ago. Since 2011, funding from the county increased by $1.7 million, but when added to other totals it’s mostly flat.
“There’s almost no change from 2011 to our current operating budget,” he said.
However, just school-based salaries, which does not include central office personal, has increased by $6 million during the same time period.
“That’s with less employees today than what we had in any year in the past,” Britt said about the January count of 1,058 school employees.
Britt said it’s attributed to decreases in enrollment, but a larger factor is increases from state and federal funds are not keeping pace with benefit costs.
“This is almost like a vise,” he said. “We talk about our funding and why can’t do things we did in the past. Well, this is why. It’s like a vise and every year, we put a twist on that vise and it squeezes a little bit tighter. It looks like that trend is going to continue for next year.”
It’s also expected that raises, teacher supplements, matching benefits, cuts for the Exceptional Children, and a 9.6 increase from Duke Energy costs is estimated to cost between $375,000 to $475,000.
“This is still yet to be determined,” Britt said. “Even with these expected cost increase, we should be able to squeak by without using fund balance for normal reoccurring operations,” Britt said.
Britt also stated that the key to long-term financial sustainability is to find efficiencies and eliminate positions by attrition. More than 80 percent of the combined state and local budgets are salary and benefit costs.
“You really can’t cut costs to get to numbers that we need to reduce by every year,” he said. “You can’t reduce things that we buy, it’s in positions.”
While talking to board members about fund balance appropriation, the district needs to spend $88,000 for a civil rights audit compliance. This includes making sure schools are updated with structures for disabled people. Energy savings and technology initiatives were also brought up. Britt asked the board to consider a $700 bonus for teachers not getting raises.
In local money, the district is expecting to see an increase of more than $96,000. Sampson County Commissioners recently approved to raise per pupil allocations for Sampson County Schools and Clinton City Schools to $1,069, which is 2 percent increase from the current $1,047.
The continuing budget was listed for approval during the board’s meeting scheduled for Monday, June 18.
Reach Chase Jordan at 910-249-4617. Follow us on Twitter at @SampsonInd and like us on Facebook.