The Madison County School district finished the past fiscal year with expenses $2.3 million under budget and a $5.4 million contingency fund, according to an audit performed by Baldwin CPAs of Richmond.
The district’s fund balance at the end of the past fiscal year was virtually unchanged from the previous year, said Baldwin’s Myron Fisher. Those figures reflect good management by both the board and district administrators, he said.
The district had assets of $197 million, including buildings, vehicles, equipment and other items. Liabilities totaled $120 million, including bonds sold to finance construction, Fisher said. That gives the district $77 million in equity.
Last year, the school board refinanced $9.6 million in bonds at a lower interest rate, which will save about $2 million over the 10-year life of the bonds, Fisher said.
The accountant said he was happy to give the board a “clean” audit report.
Details of the district’s $100 million budget, its priorities and spending practices were a sore point, however, for one board member and members of a recently formed local tax watch group.
Harold Bingham was among several people who addressed the board during the meeting’s comment period. He said no one has the income they did five years ago.
Businesses and farms have to cut spending when their income falls, Bingham said, but the school district is not just maintaining its income, it is increasing it by raising the tax rate.
His school tax this year will be $8,500, Bingham said, and he will have to cut his expenses somewhere.
“You have to take drastic action,” he told the board. “We can’t go on with business as usual. Do we need a $600,000 school to teach 60 kids?” Bingham asked.
As the board went through a list of purchase approvals, board member John Lackey questioned the price of copiers, two for Madison Center at $10,915 each, and another for Madison Middle at $4,343.
Those prices look like a lot of money for a copier, he said.
Glenn Marshall, assistant superintendent for finance, said the equipment is purchased through the state’s procurement office, which negotiates high-volume discounts. A large school such as Madison Central High with 1,800 students prints thousands of pages on a daily basis and needs high speed copiers with long lifespans, he said.
“You have to have high-end copiers to stand up to that type of load,” Marshall said. “If you don’t, they’ll just be breaking down all the time. Your maintenance would be so expensive, you couldn’t afford to run a smaller copier at a large school.”
Lackey also had questions when the board approved the purchase of nine new school buses.
Two 66-passenger hybrid buses were purchased for $140,940 each, while seven 84-passenger buses were bought for $98,073 each.
The district will be reimbursed $62,389 for each hybrid bus, lowering the cost to $78,551, Marshall said.
While the hybrids will save on fuel costs, the conventional buses are much more fuel-efficient than the 14-year-old buses they will replace, said Superintendent Tommy Floyd. School buses have a 14-year life-span, he said.
“This is over $1 million dollars, just for buses,” said Lackey, who eventually made the motion to approve the purchases. “I would hope that there would be an offset somewhere on the wish list.”
When $320,000 in technology purchases came up for approval, Lackey again wanted justification.
Marshall said the money was for computers, including a computer laboratory, and network infrastructure for the new Farristown Middle School building.
The network infrastructure will carry both conventional voice as well as Internet communication, Marshall said. Installing Internet cable and using it to carry conventional voice communication in place of separate telephone wiring means the district will pay for only one service, saving money in recurring expenses, the assistant superintendent said.
Classroom furniture for the Farristown school was purchased at a 55-percent discount negotiated with the supplier, Marshall said.
In addition to taking advantage of discounts available through the state procurement system, the school district belongs to a purchasing cooperative that enables it to obtain other items at 36 percent or more below catalog price, he said.
Responding to comments by Lackey and members of the audience, Marshall said, “It’s almost an insult to me to be accused of not watching what we spend.”
Every purchase and every travel voucher is scrutinized by personnel who know what is allowed, and not every request is approved, he said.
“Let me assure you,” Marshall said, “we really try to watch what we spend. (Financial oversight) is primarily my responsibility, and I take it very seriously.”
Each purchase order has a 10-point checklist that has to be approved by a licensed professional, Marshall said. Invoices are reviewed in his office before being sent to a school and then returned for final approval.
The state does not require school boards to limit the amount of spending a superintendent or assistant superintendent may approve, but Madison County has done so for years, Marshall said. The superintendent’s limit is $20,000 and for the three assistant superintendents who may approve purchases, the limit is $10,000. All purchases also must have first been budgeted.
Lackey said he did not mean to accuse Marshall or anyone of misdeeds or lack of oversight, but he was frustrated as a board member in trying to understand the finances of an organization with a $100 million budget.
School board members could not give close scrutiny to financial details without sitting everyday in the office he shares with two other finance officers and observing what they do, the assistant superintendent said.
Marshall said he had a similar experience while serving on a bank’s board of directors. He could not review every financial detail but was satisfied the bank had hired competent, trustworthy people to do that.
Board members “have to trust the people that work for them,” he said.
Marshall also addressed the much-criticized tax increase that will increase the district’s local revenue by an estimated 4 percent.
The tax increase will cost the owner of a $130,000 house about $2 a month, he said.
“For that, our school district gets about $1 million,” Marshall said.
This year, the district is spending $1.8 million in federal funds that will not be available next year. Teacher retirement costs will rise by about $1 million annually in four to five years, Marshall said.
“We’re trying to look ahead because that money is not going to fall out of the sky,” he said. “We’re trying to plan today to handle (the increased pension costs) so we don’t have to let 30 to 40 teachers go.”
Holding up carbon copies of her tax bills, board member Mona Isaacs said school board members pay taxes, too.
“If you have something we need to know,” she said, “please let us know. That’s why we’re here.”
Isaacs encouraged those not comfortable speaking in public to e-mail her and other board members. Their addresses can found on the district’s website, www.madisonkyschools.us.
Sharion Morgan, the only citizen to speak against raising the school tax increase at the public hearing prior to its approval, suggested that notices be sent by mail to every property owner. Not everyone saw notices of the tax hearing in the Richmond Register or on the school district’s cable TV channel, she said.
Direct mail is expensive, said board member Becky Coyle. Morgan said the board should have done that instead of spending money on pay raises.
Bill Robinson can be reached at email@example.com or at 624-6622.