Questions remain in Lynchburg City Schools budget deficit

Discussion about Lynchburg City Schools’ $440,000 budget deficit continued to linger Tuesday when two City Council members said they still had questions.

School officials met with the council’s finance committee seeking an OK for what had been expected to be two procedural matters on this year’s budget that were made necessary by the deficit.

Instead, school leaders will come back to the committee March 24 and provide more information. Council members will likely see the issue in April.

Councilman Jeff Helgeson, who chairs the finance commit-tee and is one of three voting members on the committee, said he was uncomfortable moving on the two measures until he got more information.

“I think we really need some answers before we move forward on this,” he said, later adding, “To rescind the appropriation we should have some facts.”

The division’s deficit in the last fiscal year was created by a $200,000 revenue shortfall, due to an enrollment variance and less sales tax revenue than expected, and a $240,000-overage on the expenditure side. Additionally, an expected end-of-the-year surplus of $1.4 million wasn’t realized.

The division was unaware of the deficit until an annual city audit revealed it in December, nearly six months after the end of the fiscal year. Subsequent meetings of the City Council and school board have involved numerous, and often heated, discussions about the deficit and how to prevent future issues.

At Tuesday’s finance commit-tee meeting, officials were charged with reviewing two measures to remedy the budget. To resolve the deficit, the school board has asked to first transfer $440,000 from the textbook re-serve fund to a budget-balancing contingency fund reserve.The second measure involves rescinding $1.3 million in appro-priations in the school capital projects fund.

“Because this money is not available we need to rescind the appropriation,” City Manager Kimball Payne said, adding some of the money appropriated has already been spent.

The school division spent about $162,000, prior to the audit, without realizing there would not be a $1.4 million surplus. School officials said they halted projects and canceled others once they realized the state of the budget.The money was spent on changes to the division’s central office to be compliant with the Americans with Disabilities Act, roofing work at Paul Munro Elementary School and paving work throughout the division.

In addition to rescinding the $1.3 million, the school board asked to make up the $162,000 already spent by transferring $137,918 and $24,092 from two separate funding streams.Garrett said while he knows the division is working diligently on its finances, he thinks the community still has questions, particularly when it comes to the various reserve funds. He also said he’s concerned about the school board not adhering to its textbook reserve fund policy. It stipulates the reserve must have $1.5 million. After the transfer it would have $1.06 million.

Deputy Superintendent Roger Roberts said the $1.5 million was based on how much money was in the account at the time of the policy’s creation, but that the board would review the policy.

The finance committee dis-cussion about the deficit was scheduled to last 20 minutes, but ended up lasting an hour despite some calls to get past the issue.

Payne reiterated the budget is created 15 months ahead of the fiscal year and is for planning purposes.

“At some point we just need to move on,” he said.

Vice Mayor Bert Dodson, one of the committee’s voting members, also expressed a desire to move forward. After the meeting, he said the matter has been discussed several times and he doesn’t have any more questions for school officials.

“I think we should settle the matter and move on,” he said.