County fully funds school board request with one-time infusion from reserves

By Susan Gibbs

The Greene County Board of Supervisors voted 4-1 to grant the public school board’s request for $2.1 million in additional local funding for the coming fiscal year early Wednesday morning, May 9.

Clarence "Buggs" Peyton

The request was granted at the end of a public hearing held at the William Monroe High School Performing Arts Center that began at approximately 8:30 p.m. Tuesday night and stretched into the wee hours of Monday morning, ending at approximately 12:30 a.m.

Supervisor Eddie Deane made the motion that upped the county’s proposed additional school funding from the advertised $1.1 million to the requested $2.1 million, and Board Vice-chairman Davis Lamb seconded the motion.

All but Board Chairman Clarence “Buggs” Peyton voted for the additional funding – which includes what was specified a one-time pull from the county’s reserve fund.

The vote followed mass demonstrations that reportedly began with a letter from School Board Chairman Troy Harlow and Superintendent David Jeck asking that staff and parents contact supervisors, and come to the May 8 meeting to express their concerns.

The letter was sent in response to an announcement regarding the county’s proposed 2012-2013 budget made at supervisors’ regularly scheduled meeting Tuesday, April 24.

At the April 24 meeting, Peyton addressed the school system’s $2.1 million shortfall, due, according to Greene County School Board Chairman Troy Harlow, to: anticipated cuts in federal and state funding; an expected health insurance increase of at least 10 percent; $500,000 for additional personnel; and new legislation that requires county and school employees to contribute 5 percent of their pay to the Virginia Retirement System.

The employee contribution to the VRS is to be covered by a corresponding 5 percent increase in pay by their employers. It had also been announced at the April 24 meeting that decisions regarding funding proposals for the VRS were to be delayed pending further information from the state, but that they would be made prior to the Board’s formal adoption of the budget on May 8.

The Harlow-Jeck letter circulated after that meeting stated: “At NO (prior) TIME did the BOS or Chairman [Clarence “Buggs”] Peyton indicate that schools would not be fully funded during this severe budget crisis,” the letter stated. “All joint workshops since January 2012 indicated that our financial crisis was unfortunate, but we were going to work to resolve.”

Greene County School Superintendent David Jeck

The school board threatened to cut transportation, athletic programs, teachers’ salaries and even to close the technical education center.

On Tuesday, demonstrators consisting of both adults and children lined the sidewalk in front if the county administration building, where the Board’s regularly scheduled meeting began, as well as portions of the parking lot and sidewalk directly in front of the William Monroe High School, where the public hearing on school funding was held.

Inside, the performing arts center was filled with hundreds of Greene County citizens, teachers and students holding placards. Many in the crowd jeered.

Jeck was the first of the more than 50 people who spoke. He assured supervisors that the public school system had cut as much as it possibly could, and was met with cheers, catcalls  and applause from the audience.

Peyton thanked Jeck for his remarks. He stated that while he understood why the audience was cheering and applauding him, Peyton requested that Jeck ask the audience to refrain from so demonstrating after each speaker.

Jeck did not respond, and Peyton’s request was ignored.

Among the speakers who followed were some who threatened to pull out of the county, or vote all supervisors (with the exception of Jim Frydl, who had verbally supported fully funding the school board’s request during the April 24 meeting) out of office if they did not dip into the county’s reported $16 million reserve fund to meet the school board’s request.

“We are watching you,” several speakers told supervisors.

Supervisor David Cox, a Greene County native and William Monroe High School graduate, opened the Board’s comments after all who had signed up to speak had been heard.

Supervisor David Cox

“The education provided by the Greene County Schools is very important to me,” Cox said. “I appreciate all the phone calls and e-mails. My box is full.”

Cox addressed the county’s much-publicized $16 million reserve fund, stating that it “consists of two certificates of deposit containing a total of $2 million plus interest … the average cash balance in the treasury … the accounts payable, which includes $9.6 million past due in  local taxes as of June 30, 2011.

We do not have $16 million … in addition; we are getting ready to make the first payment on the $5.3 million dollar (renovations) to the athletic and performing arts facilities.

“In closing,” Cox continued, “I am going to sit down and talk to anybody and listen to anybody but I do not appreciate the (lack of respect) shown by the school system.”

Supervisor Eddie Deane also thanked those in attendance for their e-mails.

“You have spoken and we have listened,” Deane said. “I have enjoyed watching democracy at work.”

Supervisor Eddie Deane

But, Deane continued, the Greene County supervisors “are not villains. We are caring citizens. We were elected to be stewards of your money.” He pointed out that pleasure lasts for a moment, but that regret lasts forever and stated that the fear of regret was with the supervisors that night.

“I am concerned about the half million dollars from the (federal) stimulus package that is running out, and that the taxpayer is going to have to pick up what the federal government has let down,” Deane noted.

He went on to observe that the county is in good financial condition because supervisors had been good stewards of the money, and that he respected all of his fellow supervisors.

“It seems that we have lost respect, and I want to create a trust tonight between supervisors, the school board, and the employees of the school system,” Deane continued. “I would like (to establish) a transparency beyond anything ever experienced in the county.”

After advising the audience that supervisors, too, had been shocked by the state’s cuts to the VRS, Deane proposed upping local contributions to the public school system to $2,109,981.

Those funds would consist of: $1,417,603 in school board contributions to the county’s reserve fund since 2003; $112,378 in county contribution from the reserve fund; $508,000 in new county revenues; and $72,000 from the balance in the county’s fuel account.

Board Vice-chairman Davis Lamb’s comments followed Deane’s. He stated that he had welcomed comments from the public but called attention to the lack of communication between supervisors and school board members.

“It was very unprofessional of the superintendent of schools and the chairman of the school board to send a letter out to the parents (that was inflammatory). The board of supervisors at no time said yes to the budget that was advertised. The law states that had to be printed,” Lamb said.

He did, however, end his commentary on a positive note. “What we have gotten out of this (misunderstanding) is transparency and I think that in the future we will be able to work together. I think that we can come to a conclusion that will please everyone,” Lamb said.

Supervisor Jim Frydl asked that the audience take the passion it exhibited at the meeting to the state legislature.

“No county – especially a small county – can survive under a continuous onslaught (of funding cuts),” Frydl said. He then referred to the advertised budget, to which the Harlow-Jeck letter referred. “Keep in mind that the state legislators made no effort to meet their deadline, but we were required to meet ours.

“There was no intention from anyone on the board of supervisors to deceive,” Frydl said. “The advertising regulations are strict and we did not receive any data from Richmond until 5 p.m. the day of our public hearing. The reality is it did seem abrupt … if you feel that was intentional then please include me (in the blame) because it was my fault just as much as it was anybody else’s.”

Frydl also addressed the reserve fund, pointing out that supervisors had failed to set a policy regarding its unspent assets above liability.

“We had many discussions … this past year but never did agree on a policy or vote on a policy,” Frydl said. “The auditor recommends a minimum of 15 percent (of the general fund budget). (It is suggested that) smaller counties retain a higher degree of reserves. I would argue that Greene County is one of those.”

Frydl also spoke to the change in VRS requirements, stating, “So there is no confusion the county is paying the teachers’ share. The county is the employer. (Under) the new legislation we are mandated to give a 5 percent pay increase to offset the (employee) contribution. The reality is that people will have a little less take-home pay and we will have automatically increased the fund liability by 5 percent by giving a pay raise.”

And, Frydl addressed the change in the Local Composite Index – which determines a school system’s ability to pay education costs fundamental to the Commonwealth’s Standards of Quality, and is calculated using a locality’s true value of real property, adjusted gross income, and taxable retail sales.

“About $550 is the change in the LCI,” Frydl continued. “In our case, with additional sales tax revenue, the formula actually worked really well. Over the last four years we’ve had more than $1 million in growth. Sixty percent of our budget is for the schools, and our ability to pay has increased to match that.”

He also pointed out that the school board’s request for an additional $2.1 million in local funding already included cuts that panel had made to positions and programs.

However, Frydl went on to say, the additional funding supervisors were about to approve is “one-time money, and when you use one-time money, it’s gone. (But) this gives us a year to look at everything … to (maintain) the reputation of Greene County … without causing great harm and great suffering. We are all going to get together and work as hard as we can.”

Peyton commented next.

“I fully support the schools (but) that support at the local level is becoming a tremendous challenge,” Peyton said.

“You have chosen the wrong government (to criticize),” he told the audience. “You need to understand that the local government and the local taxpayers are the strongest advocates you have when it comes to funding education in Greene County. The federal government cut $545,000. I believe that’s where the finger-pointing ought to go.”

Peyton also referenced senior citizens without retirement incomes, some of whom, he said, are “struggling to put food on the table.

“Why should (they) pay for VRS?” he asked. “It’s difficult for me to explain why we should take the shortfall in federal and state funding and backfill it with our local tax money. Somebody asked me to look the students in the eye tonight, but I have to look my constituents in the eye and explain the situation.

“The citizens of Greene County have been very supportive of education over the past several years,” Peyton continued.  “We need to prevent the county from returning to the days when it borrowed to pay its bills.” He explained that $4.5 million is currently processed through the treasurer’s office each month, and said he believed that the reserve fund should not be open to anything other than pre-scheduled projects or financial emergencies.

“If we have a disaster we have money to house people, and to buy food,” Peyton said. After noting that the county budget contains a line item for new school buses in the amount of $389,000 “since we took that (expense) over from the schools,” he concluded, “I am not going to compromise my values and my principles.”

Cox made one final comment before the vote was taken, saying, “I want it understood that I am going to go with the $2,109,981, but don’t come back to us in the middle of the year with surprises. We have got to manage what we have left and on top of that I want communication between the supervisors, the school board, and the school personnel.”

The total new money allocated to the schools is $2,109,981, which makes the grand total local money to the schools $13,628,605.

Greene County’s tax rates will remain unchanged for the coming year at 68 cents per $100 of assessed value on real estate; $5 per $100 on personal property, including vehicles; and $2.50 per $100 of value on machinery and tools.

 

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