Boone school system burned reserves over several years

Ryan Quinn , Staff Writer/Gazette-Mail

Before voting last week to refuse to follow state Schools Superintendent Michael Martirano's orders to make severe employee pay and benefit cuts and lay off even more workers, Boone County's school board members didn't blame themselves, former board members nor their central office administrators for the financial issues.

John Hudson, the former Boone schools superintendent who left his position last Thursday to become Putnam County's superintendent, wrote in an early June letter to school employees that "the financial situation and issues facing the school system are no fault of the board."

In the wake of Boone's refusal of his directives, Martirano still has ordered the board to approve by Friday a "fiscally sufficient" revised budget, something the board could vote on at a 2 p.m. meeting Thursday. But he seems to agree with the argument that much of Boone's budget crisis has been unavoidable.

"I recognize that the Boone County Board of Education faces a financial shortfall caused, in large part, by factors beyond its control," he wrote in the letter ordering the revised budget, which could require some of the same severe cuts he previously proposed. "The degree to which the county's budget has been negatively impacted by loss of assessed property values and coal industry bankruptcies is unprecedented in the memory of the Department of Education."

And Jeff Huffman, a former Boone assistant superintendent who became superintendent Friday, said at about the start of June that school system tax revenue for the 2015-16 fiscal year that ended last Thursday had so far come in $6.9 million below the county assessor's estimations, meaning a loss of 17 percent of the school system's operating budget for 2015-16. He didn't return a call Wednesday for an updated figure on how far below expectations revenue ended up.

But West Virginia Department of Education data shows that Boone had enough reserve funding several years ago to absorb a $6.9 million loss. The school system had about $8.5 million in unrestricted carryover funds at the end of the 2011-12 fiscal year.

The system burned through those reserves over the past five years, with a $3.3 million drop during 2012-13 and a $2.4 million drop during 2014-15 to leave the carryover at $1.6 million by the end of that fiscal year. Amy Willard, executive director of the state education department's Office of School Finance, said Wednesday that surplus was projected to have turned into about a $5.2 million deficit by the time the 2015-16 fiscal year ended last Thursday, meaning Boone has now surpassed Calhoun County as the public school system with the highest deficit in the state.

She said Boone "should have been, in theory, looking at" the trend of decreasing reserves, saying that without the board taking action there was "the potential that they could've ended up in a slight deficit, even without the severe property tax shortage that happened," in the 2015-16 year.

Boone's board has voted over the past year to close three elementary schools and cut 80 positions for the 2016-17 fiscal year, but Willard said the education department only realized last month just how insufficient only those cuts would be. Now Boone employees face possible last-minute cuts to their benefits, pay and even entire positions, while Boone school officials and the education department have disagreed over why the extent of the budget issues came to light so late.

Willard said that if Martirano had approved the budget Boone's school system submitted for the 2016-17 fiscal year that started Friday, the expected $5.2 million deficit would've grown by a further $1.7 million, and Boone wouldn't have enough cash flow to meet required expenses through the June 30 end of the fiscal year.

Education department spokeswoman Kristin Anderson has said Boone currently is second only to Putnam in West Virginia for average school employee pay, and one of Martirano's rejected orders was to cut Boone workers' pay, by thousands of dollars each, to the state-minimum salaries that 24 other counties pay.

Since 2011-12, as Boone's reserves have dwindled, the school system also increased the number of workers it employed with local revenue — those in excess of what the state school aid funding formula paid for. The number in excess rose from about 115 in 2011-12 to 139 in 2014-15, and the costs for these extra workers rose from $6.5 million to $8 million.

In the just-ended 2015-16 fiscal year, that number employed over formula dropped to 111.

Over the past five years, Boone also saw its students per school ratio dip lower and lower below the state average of about 410. Boone had 105 students below that average in 2011-12 and 121 below in 2015-16.

Charles Chapman, Boone's treasurer/financial services director, who declined comment to the Gazette-Mail last week, declined to comment again Wednesday afternoon on the impacts these factors and possible others had on the depleting reserves, saying in an email that he was "very busy preparing for tomorrow's board meeting." The meeting is in the Boone County Schools Operations Complex conference room, 5367 Daniel Boone Parkway, in Foster.

Mark Sumpter, the Boone school board's president, didn't return calls Tuesday, and two more board members didn't return calls Wednesday. When asked after a board meeting Tuesday whether he thought there was overspending in previous fiscal years, Huffman told the Gazette-Mail "I'm not addressing that, period."

Hudson, the previous superintendent, did speak to a reporter Wednesday for a short time, eventually saying he needed to get off the phone to do interviews.

"Through that time period there were multiple school building projects and partnering with the School Building Authority," Hudson said of the past five fiscal years.

"No one predicted that drastic drop," he said of the 2015-16 revenue shortfall. "… There was no indication that money would not continue and revenue sources would not continue as they had been."

Reach Ryan Quinn at ryan.quinn@wvgazettemail.com, facebook.com/ryanedwinquinn, 304-348-1254 or follow @RyanEQuinn on Twitter.

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