City Council to discuss schools budget issues

Lynchburg City Council appears divided over how to respond to the school system’s recently uncovered deficit.

The shortfall, created by a combination of budget miscalculations and poor monitoring, is expected to generate lengthy debate during a work session today.

School officials will be present to share the findings of their own investigation and explain how they plan to correct the missteps.

Related:

Read Norris Gryder's letter to Julie Doyle about Lynchburg City Schools' budget shortfall

It’s unclear whether council will take any action of its own. Interviews conducted Monday with six of the seven council members found opinions were mixed.

“When you have this serious of an issue, I don’t know that there are many things that shouldn’t be on the table,” said Councilman Jeff Helgeson of Ward III.

“This is a serious issue,” he added. “We’ve got $1.8 million gone. That’s $1.8 million that was supposed to help our schools.”

Lynchburg City Schools finished the past fiscal year with a $440,000 deficit. It also failed to realize an expected surplus of $1.4 million.

Some city officials, as a result, have characterized the total budget error as $1.8 million. In their own deliberations, school leaders have focused on the $440,000.

The deficit, which caught local officials off-guard, was discovered during an audit finalized in late November, almost a full six months after the end of the fiscal year.

School officials are now expected to develop new, internal safeguards to prevent further funding gaps.

But, it’s likely at least some council members will push for broader policy change. Possibilities include putting new limits on how the schools can spend their local funding or consolidating some of their financial operations with those of the city.

“I think you’re going to get suggestions across the gamut,” said Councilman Turner Perrow of Ward IV. “We’re going to have to see what the mood is when we get there.”

“I think we’ve got a trust issue right now that needs to be resolved,” he added, referring to the school system’s handling of the budget.

City Councilman Ceasor Johnson of Ward II disagreed about the need for higher-level change. He said the school board, whose members are selected by council, could be trusted to address the issue and shouldn’t have its authority “undercut.”

“We interviewed and handpicked these school board members,” he said. “… If we did our job well, I don’t see why we have to micromanage them. Why do you even need a school board if you’re going to do that? I think we’ve got competent people from this community who’ve volunteered their service and who will be able to do the right thing given the right information.”

A three-page report shared with City Council on Friday details how the deficit came about. Mistakes included overestimating student enrollment, which is used to calculate state funding, and underestimating salary expenses.

Officials also provided insufficient updates on the division’s financial standing throughout the year, according to the document, which was compiled by an outside consultant brought in to help pinpoint the cause of the local shortfall.

The report, which will likely be part of the school system’s presentation today, was at the center of a minor dustup last week.

Seeking to get a copy of it in advance of the meeting, Councilman Perrow took the unusual step of filing a Freedom of Information request.

Perrow said an earlier request was made through traditional channels but had not been answered by Thursday, when council receives all of its preparation materials for the following meeting.

He submitted his request that night. The school system responded with copies the next day. In an e-mail to the city, Superintendent Paul McKendrick said the delay was not due to a lack of cooperation but rather to concerns about releasing information in the report related to personnel.

He did not specify what passages sparked the concern. A consultation was held with the city attorney before the materials were released, according to his message.

Several council members said they expect school officials to expand on the consultant’s findings today, with detailed explanations of how the shortfall occurred, where the division stands in the current fiscal year and what its plans are for the future.

“I’m interested to see how the discussion unfolds. I don’t think it’s just a simple matter of, well, we didn’t make $440,000, so we’ll take it from the textbook fund,” said at-large Councilman Scott Garrett, referencing a plan outlined by school officials last month.

Councilman Mike Gillette of Ward I said he wanted to be “absolutely sure this is not going to happen again,” but added the schools shouldn’t be “punished” going forward.

“I think (school officials) can be trusted because I think they realize how significant the error is,” he said. “… I’m not looking for a solution that involves stripping the school system of its autonomy.”

Vice Mayor Bert Dodson declined to discuss the issue before the presentation, but said he anticipated it would be a “lively” session.

Mayor Joan Foster did not return two calls for comment.

City and school officials discussed consolidating some operations during a joint meeting last month. Possibilities raised included financial responsibilities, but concerns were raised about the legality of such a step.

McKendrick cautioned officials to proceed thoughtfully and not rush into any change.

Council can, if it wishes, change the way it allocates money to the schools. Currently, it assigns the division one pot of money for operations — $32.4 million in this current year, in addition to another $5.9 million for debt service.

Officials have the option of divvying that money up into broad categories, assigning specific sums for tasks such as instruction, administration and maintenance. The schools would not be able to transfer money from one category to another without council’s approval.

MEETING INFORMATION- Today’s work session begins at 1 p.m. in City Hall, 900 Church St.
- Other items on the agenda include the extension of Ericsson Drive on the Liberty University campus, a project opposed by LU.
- The city’s long-debated big-box ordinance is also on the list, but is expected to get scant time for discussion. Council is expected to push its final decision off to February.