School board looks to improve financial ratio to avoid state intervention

Gulf Breeze News | by Pam Brannon | January 7, 2021

The best news the Santa Rosa County School Board received just before Christmas break was that an executive order was signed by the Governor Nov. 30 with the agreement of the state’s Education Commissioner guaranteeing the state will not take money away from Florida schools if they didn’t meet the projections of how many students would be attending the public schools this school year. It is an issue school districts around the state have been concerned about with their budgets looming for the Spring Semesters since last summer.

Consultant Dr. Jim Hamilton told the board, “They said if you are down students coming into the Spring Semester, they are not going to take away the money they have already paid your district for those students. And if you have students in hybrid models, like online but active with a class, they will look at those students as if they are sitting in seats in the classrooms.”

He said the state also agreed that if schools have half the students on buses that had been expected, the state will not take away any transportation dollars, as was standard procedure in previous years.

“They want you to try to get kids back in the classroom,” Hamilton said. “And the science now shows that young kids are not big transporters for the virus. Does that mean no kid will ever get the virus at school? No. Does that mean no kid will ever bring it home to their family? No. But science has shown it is not widespread from kids going to school. And they also want you to make sure kids are doing well in their classes, and if they are not they want you to use some intervention methods to bring them up to state standards.”

Dr. Hamilton works as a consultant for Santa Rosa County Schools and Escambia County schools, as well as 38 to 40 other school districts across the state.

“I have been working in the education business for 53 years now,” he explained. “I retired in 2007 and became a consultant for districts around the state.”

He now lives in Pensacola and has a granddaughter who teaches at Gulf Breeze Elementary.

During the Special Financial Workshop, the school board was also brought up to date by the district’s Assistant Superintendent of Finances Susan Mc- Cole on where the district stands on its budget expenses and revenues and especially its fund balance.

“As Dr. Hamilton has explained, the state wants to see us with a five percent to 10 percent fund balance. But they mandate that we don’t go below three percent.”

Hamilton had warned the school board, “By law, you are required to maintain a fund balance. When your projected fund balance is three percent or less, school districts have to send a letter to the board top show what they are doing to bring it up. When it hits two percent or less, then the district has to send the state a fiscal recovery plan. If that plan is not approved by the state, they will appoint a financial oversight panel, and you will not like that. I served on a panel or two and they literally looked at the paper towels that were purchased. The state must maintain a fund balance of between five and 10 percent and they advise you to do the same.”

McCole told the board, “Right now, we are at a 3.4 percent fund balance. We would like to get to a six percent fund balance. Dr. Barber has been looking at all kinds of ways to bring in more revenue, from grants to recoding some jobs under state programs.”

Barber explained, “This is possible to bring out financial ratio up with some work and watching every dollar. If there are employees being paid out of our General Fund that could be paid by some federal or state funds or programs, we need to look at that. The sale of the Whisper Creek property will also help. We need to use an enormous amount of discipline on every dollar in spending.”

“But we need to do all this, while at the same time compensating our employees fairly and keep that ever present in our minds so we attract good talent and keep our good talent,” Barber said. “Often when people hear us talk about cutting expenses, they get nervous about employment. We are looking at options that will not affect our employees or our students.”

McCole outlined some of the revenues and expenses for the past three years for the board, explaining, “The school property taxes did go up again this year, but it will change throughout the school year. Overall, from 2018 -19 school year to 2019-20 we received an increase of $6.3 million in taxes, and in year 2019-20 to 2020-2021 we increased $4.7 million – but now in the 2021 months it will change through the rest of the school year as people pay their taxes.”

She said she did some comparisons to neighboring districts on taxes, saying, “Escambia County collected $93.7 million in school taxes last year, and Okaloosa collected $90.9 million, with Santa Rosa County collecting $52.2 million. Those dollars are used for operating funds in the general fund. They have a lot more to work with than we do.”

She said in the 2018- 19 school year, the district spent $8.5 million more than the revenues it brought in, and in 2019-20 school year, it spent $9.4 million more than revenues brought in. The district used fund balances to make up the difference in most cases, which in 2019-20 school year brought that fund balance down by $5 million.

“We started this school year with a $23 million fund balance. The forecast right now is for us to end the school year with a $10.2 million fund balance. We are right now spending more than we are taking we are bringing in through revenues. That is not sustainable.”

Board Chair Wei Ueberschaer of Gulf Breeze agreed, saying, “This is not sustainable at all. Something needs to be done. We cannot keep spending more than we are bringing in.”