In January, the Madison County School Board approved a tentative budget for the 2020-2021 year.
A lot has changed since then.
COVID-19 has spread across Kentucky, causing a halt to in-person educational instruction while also infecting serious financial implications on governing bodies. Also, legislation has been signed into law that will have an impact on funding for local schools.
Mark Woods, the chief financial officer for Madison County Schools, had to take all those factors into account before putting together a revised tentative budget, which was presented to the board Thursday night during a video conference meeting.
"There's even more unknowns (than usual)," Woods said. "We are trying to put a lot of thought into the budget and take into consideration several options."
The newly revised tentative budget was approved unanimously by the board with the understanding that further changes may have to be made in the future.
"I don't envy (Mark) right now," Board member Samantha Burford said with a laugh. "It's a lot of work."
It may well still be a work in progress.
The budget is estimated at $106,575,000.36, which is almost $5 million less than the 2019-2020 school year. Despite the drop in revenue, Woods was able to present a preliminary plan that, at least right now, doesn't force the school system to dip into its reserves.
"We may have to use the contingency funds to balance the budget," Woods warned.
Many factors forced the changes.
The most notable were, not shockingly, COVID-related.
The budget anticipates a large drop in utility tax revenue next year — perhaps as much as $300,000. Because many factors and businesses in Madison County have not been operating for the past two-plus months, they haven't been using as much energy.
The school system is also not getting as large a return on its investments right now as it has in recent years. Market rates have dropped to around a quarter of a percent. Prior to the COVID-19 crisis, those rates were more than 2% or even higher.
In addition, Madison County will not receive as much SEEK (Support Education Excellence in Kentucky) funds this year. The passage of HB 366 separated Model Laboratory School from the school system. The SEEK funding for the students who attend Model will now go to Eastern Kentucky University, which operates the school.
That will likely result in well over a million dollars in less a year for Madison County Schools.
Woods said, though, the state did make some adjustments to the SEEK distribution, that along with continued growth in the local population could diminish the long-term affect in the change in funding. Asked by one board member how much HB 366 would hurt Madison County Schools, the chief financial officer said that considering those factors, "helped it from being a major loss."
Schools usually receive $4,000 a year for each child from the SEEK program.
The budget does not include any expected significant increase in local property tax revenue.
Woods is optimistic that more funding could come from motor vehicle registration fees — if business bounces back in the coming months — and also from property assessments.
The budget is balanced, but it does not include raises for teachers or an increase in staff, drivers or para-educators.
It does feature funding for 10 new buses and continues to provide $350,000 for nurses in the school, a program which was put into place last year, just before the pandemic.
"I am very happy that we did that last year," Burford said of the nurses.
There are other concerns, too.
COVID-19 could still present unexpected financial difficulties moving forward. Pension reform remains a lingering issue, Madison County could lose CSEP funds if the Blue Grass Army Depot is phased out and the proposed Richmond Area Career and Technical Center will cost at least $300,000 "just to open the doors," Woods said.
The board addressed several other issues on Thursday.
They unanimously approved designation for 2019-2020 fund balances, along with a proposal to un-commit 2019-2020 funds for the KSBIT (Kentucky School Board Insurance Trust).
The board approved without objection the 2019-2020 working budget, then once again addressed the Richmond Area Career and Technical Central. The members heard a lengthy presentation from Tony Thomas, which included slideshows of the proposed $20 million facility at its proposed location off of Four Mile Road.
The final plans were approved, unanimously again. After a third passing of the proposal, the organization can now officially start seeking bids for the project.
The board briefly addressed the uncertainty about the return to in-person instruction in the fall.
Superintendent David Gilliam said the school system is sending out surveys to parents and staff next week seeking input. A back to school advisory panel has also been formed.
"We are getting a lot of information from a lot of different places," Gilliam said.
After going into executive session, the board returned to discuss its evaluation of the superintendent, which is pursuant to KRS 61:810 and KRS 156.557.
The members returned an overwhelming positive review of Gilliam, saying that his performance was exemplary in every aspect.