Lynchburg schools deficit debate simmers down

Issues surrounding last year’s $440,000 school deficit died down Tuesday during a meeting of Lynchburg City Council’s finance committee.

Committee members voted to send a housekeeping measure needed to clean up the city’s books to full council next month.

A formal council vote is still needed to put the matter to rest, but most questions about the controversial Lynchburg City Schools deficit appeared to be resolved during Tuesday’s almost hour-long discussion.

The committee — composed of four council members — unanimously agreed to recommend that council use money from the school system’s textbook reserve fund to correct the deficit. Money from that fund will be placed aside into a new fund labeled the “Fiscal Year 2008 Budget Balancing Contingency Reserve.”

The name of the reserve was tweaked slightly after Councilman Scott Garrett expressed concern that the former name, “Budget Balancing Contingency Reserve,” created an expectation there might be future budget imbalances.

While the meeting did ultimately correct the deficit issue, it wasn’t without its heated moments. Members of school administration wanted a swift end to the matter.

Councilman Jeff Helgeson, the finance committee chairman, still had lingering questions, though, while Garrett and Vice Mayor Bert Dodson sought immediate closure.

“Let’s just deal with the issue,” Dodson said, adding later that Helgeson “just wants to walk around in circles.”

Helgeson countered by saying they needed a full understanding of the situation. Dodson shot back that they had already spent a considerable amount of time on the issue, and it was time to vote.

This was the third time the finance committee had discussed the school system’s 2007-08 deficit, which was the product of a shortfall in revenues combined with an unexpected increase in expenditures. The issue has also been brought up numerous times at both City Council and school board meetings.

During the finance committee meeting, school officials said they feel confident they will realize a surplus at the end of this year, which will enable them to replenish the textbook fund.

At one point, Helgeson asked if textbook funds could be moved into the city reserves since no textbook purchases were scheduled for next year. City Manager Kimball Payne said, legally, it was feasible. While earmarked for school use, the textbook reserve is under the city’s control and officials can re-appropriate it as they see fit.

Helgeson’s suggestion didn’t carry much weight with the committee and members didn’t seriously entertain the idea.

Later in the meeting, Helgeson suggesting using the textbook reserves to pay for a series of business tax refunds the city is obligated to pay after losing a court battle with English Construction Co., a local business.

City staff had brought the issue to the committee’s attention. Staff recommended the money be taken from the city’s self-insurance fund, a cache of money maintained by the risk management office and generally used to pay legal fees and judgments.

Other finance committee members argued Helgeson down, saying a day would come when the division needs money for new textbooks.

Garrett, who’s running against Helgeson for the Republican nomination for the 23rd District seat in the House of Delegates, said the schools have already made significant sacrifices in their own budget.

“They’re already scraping their side,” Garrett said. “It’s incumbent upon us to protect our kids.”

Superintendent Paul McKendrick, who was in attendance, said the textbook fund has a specific purpose — when the division does have to make adoptions, per the state’s requirements, there is money set aside so the system doesn’t have to ask City Council for money.

“It was not done precariously,” he said of the fund.

City Council is expected to vote on the deficit’s correction May 12.

- Staff writer Alicia Petska contributed to this report.