As it has been for the past two years, when Fulton Public Schools Superintendent Jacque Cowherd presented the school board with financial projections through 2013 during Wednesday night's meeting, the picture was not pretty.
According to his presentation and the letter included in the board packets, the district will have to approach its patrons sometime in the next two years for a tax increase to help fund school coffers.
"A tax increase is required! The issue is when and how much," Cowherd wrote in the letter, a point that was repeated Wednesday.
He started off with a brief review of the district's current fund balance reports.
"The bad news is operating revenue is down about 5 percent. The good news is expenditures are down about 10 percent. We continue to be strong in cash," Cowherd said. "The concern down the road is, as you can see the decrease in state and federal funding, maintaining our cash flow."
He walked the school board through the revenue projections for fiscal years 2011, 2012 and 2013, emphasizing that "I want to stress to you this is a first draft projection."
Pointing out that it is slated to take approximately $3.1 million to fund the state formula in 2011, but only $3 billion is projected to actually be funded by the state, combined with a predicted drop in gaming revenue, the net operating balance for the district would be $543,839 assuming the district would receive funding through the Federal Jobs Bill in 2011. With the state projected to fund an optimistic 90 percent or - according to Cowherd - more realistic 83 percent of the formula in fiscal year 2012 and 80 percent of the formula in fiscal year 2013, that net amount decreases to an approximately $2 million deficit in 2012 and a $2.88 million deficit in 2013.
According to Cowherd's preliminary projections, the district needs to adjust expenditures (or increase revenues) by more than $3 million to maintain a 17 percent operating balance.
"We should have reserves of about 22 percent. If we didn't make any changes to our expenses, your reserves run down to about 13 percent in fiscal year 2012, and you deplete it all by 2013," Cowherd said. "I'm just trying to give you a picture (of what we'll be dealing with)."
He told the board it would have to seriously consider a tax increase to help counterbalance some of the lost revenue. According to Cowherd, every 1 cent of the tax rate is equal to approximately $15,446 in revenue for the district (taking into account taxes that are not collected). He presented a chart to the board Wednesday showing that 11 cents would generate $170,135, 21 cents would generate $324,803, 35 cents would generate $541,338 and 49 cents would generate $757,874.
"(We need to) take a look at our budget and try to get some kind of balanced bid in fiscal year 2012, and while we do that, look at a tax increase," Cowherd said, suggesting the district put a tax increase for Fulton Schools on either the November 2011 or the February 2012 ballot. "We have to have that levy in place by the end of August 2012."
"So you're saying in order to keep 17 percent reserves ... if we don't get some kind of tax levy, we'll have to cut nearly $3.5 million in the next two years?" school board member Lisa Pierce asked.
"That's about as bare bones as it can get," Cowherd replied. "That's all the good news I have."
Also on the agenda at Wednesday night's meeting was an appearance by two parents of Fulton High School cheerleaders.
David Hunter and Dan Tucker had submitted a written request several weeks ago to appear before the board that stated, "The parents of the FHS cheerleaders request that they be heard by the school board after cheerleaders were all suspended without informing parents or any fair hearing."
During the meeting, however, both parents said the situation had been settled and they had no complaints.
"I think the situation was handled and we salvaged our season," Hunter said. "I've heard many good comments that despite a rough season, the cheerleaders help keep up spirits."
Tucker made a similar statement.
"About three weeks ago we had a problem with the cheerleaders. I want to thank you all for your handling of this situation," he said. "You handled it quickly. Thank you for your service. Thank you for taking care of this situation."
The board made no comment.