Reserve account concerns members
By Phyllis Moore
Published in News on February 5, 2008 2:02 PM
The school system's fund balance should be higher and target dates are needed for construction projects, school board members said Monday night.
Board member Rick Pridgen raised the fund balance question with Penny Lanier, senior accountant with Pittard Perry & Crone, which audits the district's books, asking where the school system fell compared with other school systems.
"There's no state statute. There's no definite answer," she said, before adding that, "When you do research, they say anywhere from three to six months in reserve of the expenditures, but there's nothing that's concrete.
"As it stands now, you do not even have a month's worth in reserve, so it doesn't look good."
There's definitely "some need for improvement," Mrs. Lanier said, suggesting that shoring up the reserves would be wise.
"It really does concern me that our fund balance is as low as it is," Pridgen said. "Of course, we all know the reasons behind that, but I really have a lot of concerns, a lot of fears if we have something happen to us, such as a hurricane. Where are we going to be and how soon (can we) get back up?"
Pridgen said he had the opportunity to travel to Florida and talk with those who experienced a hurricane that "wiped out some of the schools down there."
"There were a lot of things they just were not prepared for, that come up at that particular time -- making payroll when you don't even have a computer to do it," he said.
For Wayne County to be "sitting around with one month of our operating budget" while other schools have three or four months of funds in reserve could be a problem down the line, Pridgen said.
"I really think that we need to make another appeal in the future to our county commissioners to take serious consideration that our fund balance needs to be higher than it is," he said. "We need for all entities that are involved to realize the things that could happen to us."
Superintendent Dr. Steven Taylor said he understands the concern.
"We would like our fund balance to be higher," he said. "Over time we have spent down the fund balance. We're at the point where we can't go any lower."
The current rate, however, is in line with what was recommended by Evergreen Solutions, a consulting firm hired by the county commission to do a study of the school system.
Nevertheless, Taylor said, "It's one of the points we feel like we could be at more than was recommended."
Several members also took issue with the status of funding earlier promised by the commission for a portion of the building projects around the county.
"We have got $23 million now in the bank, so to speak, it's definitely earmarked to pay for this $23 million program that we have going," board member Pete Gurley said. "Why have we got to wait three or four years to start? Why can't we start immediately, come up with some source of funding?"
Gurley said he cannot understand the need "to buy that much time."
"It seems to me have that we have already got this part of our program funded," he said. "That's a done deal, the money's in place, that we ought to begin immediately with some of these projects. I would like to see us talk to the commissioners in these terms so that hopefully we can go ahead with the next phase of the building program. There's no need for us to wait, I don't think."
Board member George Moye agreed, "but of course it's not in our hands. It's in the hands of the funding agency -- the county commissioners -- unless we get some help from the state."
Board member Dave Thomas said action is needed, suggesting an option he believes the public will support.
"When the referendum comes out (quarter-cent sales tax), if the commissioners will commit what percentage we will get, I think it will pass," he said. "But if they don't say where it's going, it will be a trying time to get it passed because people won't trust where it's going to be spent."
Board Chairwoman Thelma Smith said she had heard that negotiations for the next step "will not wait, that they're going to immediately start, these projects are on the way" and had gotten the impression that "it's not going to be at the end of the three years."