City moves $494K to partially cover school deficit

Published 9:44 am Wednesday, November 30, 2016

Following a public hearing to consider nominees for a new school board, Franklin’s city council voted 6-1 to amend its budget for 2016 to appropriate $494,643 from unspent carryover funds from the school board’s fiscal year 2014-2015 and allocate them to Franklin City Public Schools to cover the $480,000-plus deficit reported for the board’s fiscal year 2015-2016.

The budget amendment, titled 2016-22, stems from a request by the immediate past school board and superintendent to cover “operational expenditures to assist with the shortfall of expenditures over revenue.” Councilman Greg McLemore was the dissenting vote.

However, according to City Manager Randy Martin, the appropriation will not be enough to cover the revised deficit estimate the city’s auditors recently provided to council, which they are now predicting stands at over $730,000. According to Martin, the revised deficit estimate stems from the division’s purchase of 430 HP Elite tablets purchased on June 28, two days before the end of the division’s fiscal year 2015-2016, intended to be distributed to all high school and eighth grade students.

Payment was obligated on June 28 during the previous fiscal year, but was only partially paid by June 30 in the amount of $107,000. The remaining $230,571.50 was paid in August during fiscal year 2016-2017. As a result, the full cost of the tablets, valued at $330,571.50, remains listed in the division’s books for fiscal year 2015-2016 as unpaid, thus adding to the cumulative deficit.

City auditors also identified $21,541.67 in unpaid debts for fiscal year 2015-2016, which the school division classified as being for “professional development training funding,” which, when combined with the existing deficit, left the division $238,714.31 in the red at the start of the 2016-2017 fiscal year. The division received a state grant in the amount of $112,400 early on into the current fiscal year, but still must absorb a $126,314.31 deficit for fiscal year 2016-2017 by June 30, 2017.

Prior to approving the appropriation of the $494,643 in carryover funds, members of council questioned Interim Superintendent Kelvin Edwards on what exactly “professional development training” entailed and what actions he and the school division were taking to address the remaining deficit.

Edwards explained the professional development training expenses as resulting from a quarterly bill from a company known as Catapult, which supplies the division with a full-time math director and reading director on-site 40 hours every week to assist teachers with lesson planning and create better strategies in the classroom. According to Edwards, the effectiveness of the Catapult math and reading specialists has been demonstrated in S.P. Morton Elementary School receiving partial accreditation. He added that the specialists are continuing to assist the division with obtaining full accreditation.

As for the remaining deficit, “We have been rolling up our sleeves, turning over every stone and freezing the budget,” Edwards said. “We have put a grid lock on everything that was not related to instruction and we will find the funding to cover that deficit.”

Edwards and the division’s financial staff has been in regular contact with Dr. Kaiser, the superintendent of the Virginia Association of Schools and Dr. Steve Staples of the Virginia Department of Education to receive financial guidance.

Following the vote on budget amendment 2016-22, Martin presented the council with his city manager’s report, in which he announced that Franklin and Southampton County are now both full voting members of the Hampton Roads Transportation Planning Commission. Martin also announced that Franklin is currently considering partnering with Southampton County to hire a full-time human resources and professional services director, who would split his or her time between the city and county offices.

According to Martin, the plans to hire an HR director stem from a high probability of litigation concerning retirement and other HR issues. Martin added that the estimated cost of partnering with the county to hire a full-time director and subordinate employees to staff the city’s and county’s HR offices will not significantly increase the city’s budget, and may even result in no net increase or a small reduction.

Martin also mentioned that Franklin is applying for state and federal funds for FEMA hazard mitigation, which, if granted, will be comprised of 75 percent federal funding, 20 percent state funding, and five percent funding from the city. The funds will be used to purchase and install a switch gear 800 kilowatt emergency generator at Franklin High School where the city’s emergency shelter is located.

The council concluded by going into closed session.