While Giles County officials would like the school system to use its own sources of funding for its initial $12.7 million school renovations and upgrades project, the county commission’s Budget Committee is recommending the full commission commit to keeping the school system’s fund balance at a minimum of $3 million during the project.
Last week, the budget committee approved a request from the school system to move $2 million from its fund balance into an account set up for school renovations funds. That $2 million approved by the budget committee increased the amount in the account to $8.3 million, which leaves the school system approximately $4.4 million short of the funds needed for the first phase of the project.
Giles County Executive Melissa Greene said she thinks the school system can take care of that $4.4 million on their own, noting that the issue is more about cash flow due to the timing of the projects.
She explained that timing estimates put the beginning of the school renovations project at the summer of 2022 with an aggressive estimate of 18 months for completion. Greene said she believes the collection of higher than expected sales taxes by the school system is enough to fund the $4.4 million by the time the funds are actually needed.
“When we get to the next phase, then we’ll have to look at a bond issue or other financing options,” Greene said, adding that she believes the first step can be absorbed by the school system.
Greene stressed that if the school system is going to be expected to use its fund balance for a massive capital project, the county commission would need to commit to helping the school system maintain its fund balance at a minimum of $3 million in order for the school system to have the funds it might need.
“They need a commitment from us that we are going to get this first phase done,” Greene said. “They need some kind of commitment from the county commission that we are on board for the difference if their fund balance gets below $3 million.”
Commissioner David Wamble, who formerly served on the school board, stressed how important the school system’s fund balance is, noting that big yearly expenses like buying buses are paid for using the fund balance.
Other big expenses expected to be coming over the next few years include state-mandated teacher raises and roofing projects that are not part of the school renovations plans.
Director of Finance Beth Moore-Sumners said, based on the timing of the school renovations projects, she agrees with Greene concerning using the school system’s fund balance.
“I think we need to take Mrs. Greene’s approach and give the school system a commitment that we are going to get this first project going,” Moore-Sumners said. “I don’t think we should start issuing debt until we see what the cashflow is.”
Greene added that there are some schools projects that the county could possibly cover with grant funding, but noted that the rules for the grant funding have not been released.
The budget committee voted unanimously to recommend the full commission make a commitment of funds that would maintain the school system’s fund balance at a minimum of $3 million.
In other business last week, the county commission’s budget committee:
• Voted to recommend the county absorb a 4 percent increase in employee health insurance premiums at least for the remaining seven months of the current fiscal year, at a cost of approximately $39,000.
• Heard the application for non-profit organizations seeking appropriations during the annual budgeting process has been reduced to two sheets for the full commission to consider.
After making a few revisions, the budget committee voted to send it to the full commission for final approval.
• Heard that, due to increase in population in the 2020 census, the county general sessions judge salary will increase and the county will be required to pay General Sessions Judge Chip Richardson retroactive to the beginning of the 2020 census, which comes to $47,000 in back pay.
“This is not anything he has done,” Giles County Director of Finance Beth Moore-Sumners stressed. “We had a few more numbers in the census data and that puts him into another category. It is nothing he’s done. We have to pay it. There’s no other choice.”