The DeKalb County School District today announced a 35-percent increase in its projected surplus for Fiscal Year 2014, reporting an additional $10.9 million in projected reserves over the $20 million surplus previously reported.
Superintendent Michael Thurmond cited an increase in revenue collections as well as lower expenditures to produce a projected FY14 fund balance of $30.9 million.
“The additional $10.9 million in reserves demonstrates that we are making significant progress in stabilizing the finances of the DeKalb County School District,” said Mr. Thurmond. “Our goal is a fund balance of $66 million. We’re just halfway there, but we are confident that we will reach that milestone.” When Mr. Thurmond was appointed interim superintendent in February 2013, the general operating fund balance stood at only $100,000.
Earlier this year, the district announced an anticipated surplus of $20 million in a budget that made new investments in instruction, technology and school safety. The FY14 budget also eliminated furlough days, and provided the first pay raises to teachers and staff in six years.
“We’ve maximized existing revenue streams, reduced legal expenses and have gained better control over personnel costs,” said Dr. Melvin Johnson, Chair of the DeKalb Board of Education.
“We now have more accurate projections of our costs, and we’re avoiding the overspending that occurred in the past. There has been a tremendous turnaround in legal expenses alone, allowing us to shift those dollars from courtrooms to classrooms.”
“We’ve made significant progress in a short period of time,” said Mr. Thurmond, “and we have every expectation of attaining full financial health for the DeKalb County School District.”
Ok. Well and good. And a far cry from where we were in 2012 [broke]. But keep in mind, this increase is essentially a windfall. When property values decreased during the Great Recession, the previous board increased the millage rate on property taxes in order to generate the revenue budgeted. In fact, the overall operating budget increased by $9 million FY 2013 – the year after that tax increase and $19 million more in FY 2014. Now that values have returned to where they were previously, this board did NOT roll back the millage rate. Instead, they are enjoying the windfall of increased tax collections due to increased property values plus an increased millage rate. In fact, the estimated operating budget for FY 2015 is projected to increase yet again, by another $17 million, much of it due to property tax increases. Overall, the school district has collected an increase of at least $45 million in revenues over three years, all while crying poor.
Simply put, FY14 local revenue was about $25 million more than anticipated. And the school district also received $7.5 million in the Heery settlement which is considered revenue. Together, they nearly make up the $30 million in additional revenue.
And yes, while we are pleased that the Heery case was settled and we won’t be getting billed by King & Spalding for that case anymore, we remain concerned that we still employ too many lawyers and our legal fees budget will once again end the year in a deficit. We now have one main legal firm, Nelson Mullins Riley & Scarborough LLP, as General Counsel at an earned retainer rate of $65,000, per month, plus expenses, along with several others contracted for specialty work according to Ron Ramsey’s report in the August 4, 2014 minutes, in addition to Thurmond’s own hiring of McKenna Long & Aldridge to the tune of $50,000 a month for ‘board governance training’. As far as we can tell, we have paid them over a half-million thus far for this training. Yet, still, word from the administration remains, “we can’t afford a full forensic audit.”
Also, while those ‘controls over personnel costs’ have mostly meant cuts to teachers and school staff, not administrative personnel, please keep in mind, they have not even uttered a word about reinstating the contributions taken away from teachers’ pensions, which account for millions in budget cuts. Annuity pension contributions that were promised decades ago in exchange for agreeing to forgo Social Security — were cut completely in 2010. Now, all teachers have is the state’s Teacher’s Retirement System for their retirement savings – no annuity and no Social Security. And yet, in spite of these horrific cuts to teachers and staff, our board remains proud of their ‘fiscal’ actions.
It ain’t right. We take in plenty of money to pay teachers well and to attract the best and brightest teachers into our classrooms. Some serious budget adjustments, prioritizing and consolidations still need to occur. While it’s true that some legal fees have been reduced, tax collections have increased and teacher cuts remain in effect, resulting in these new budget increases. Bottom line: an awful lot of heavy work is yet to be done in order to create a sustainable, successful system in perpetuity.
According to the FY15 budget, General Fund revenue has been going through the roof the last few years:
FY2012: $755 million
FY2013: $764 million
FY2014: $785 million*
FY2015: $802 million**
*FY14 revenue is extrapolated from June 2014 actuals. **FY2015 is estimated in the budget. Note: FY14 local revenue was about $25 million more than anticipated. The school district also received $7.5 million in the Heery settlement which is considered revenue.