Schools to lose $1.2 million

Alexander City BOE believes it will be able to make payroll without borrowing money this year

By Laura Johnson | Alex City Outlook

Published Wednesday, October 28, 2009

The Alexander City School Board learned from a recent state report that the 7.5 percent proration announced earlier this school year would result in a $1.2 million loss in its annual budget.

Prior to the report, the school system had only a tentative knowledge of how much money they would lose. Now that they know the exact amount, officials have calculated the numbers into the budget and have found a sense of relief, for now.

“If we are very, very careful, we should be OK,” superintendent Lou Ann Wagoner said. “If proration is increased, then we will have to examine our expenses even more closely.”

The news means that the school system will be able to make payroll and pay their bills, but if proration is increased by even a half a percent, it could create serious problems.

“We are going to do everything we can to make it, but if the increased proration is anything more than 7.5 percent, then we’re going to have to borrow money,” said Rhonda Blythe, chief financial officer for Alexander City Schools.

The schools system’s standing is still strong when compared to others in Alabama who are already borrowing money to make payroll, Wagoner said.

Part of the reason the school system is doing comparatively well despite the $1.2 million blow is because of its reserve fund. It currently holds about $1.3 million and while it will cushion the school system’s budget this year, it will also be depleted by May.

“We are doing a lot better than other schools, but we are still in a very difficult position,” Wagoner said.

School administrators are consulting administrators at the state level about how they will move forward into the next school year with a depleted reserve fund and are focusing on the financial standing of the year and its strengths.

“We are hoping that as long as everything goes OK we will be able to pay everything, but we may not be able to pay everything on time,” Blythe said. “But we should be able to make this year.”

Blythe said the school system may not be able to pay them on the 30th of each month as they usually do. Instead payment may be delayed by a few days some months because the school system will have to wait to receive its monthly state allocation.

Blythe said part of the reason the board’s financial standing is doing comparatively well is because staff members elected to reduce spending and conserve energy last year.

She said because of those employees’ efforts, the school system spent almost $400,000 less than budget, meaning the system’s reserve fund was originally expected to hold just $985,382 at this time but instead holds $1,372,980.

“We are better than we thought we would be, simply because when proration was announced we all tightened our belts,” Blythe said. “This couldn’t have happened with one or two people, it had to be a system-wide thing.”

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