By Lisa Witt

Under the School Fiscal Accountability Act, Alabama public school systems are required to “develop a plan to establish and maintain a one-month minimum operating balance”.

Due to proration of state funds in FY 2009 and FY 2010, this has been especially difficult for most systems, causing a record number to fall below the required one-month threshold. For the fiscal year that ended September 30, 2009, 56 of the 132 Alabama public school systems did not meet this requirement. Russellville City Schools was included in this group.

As a result of proration, RCS lost $1.4 million in funding for FY 2009, and will lose $900,000 for FY 2010. With these significant losses in funding, it has been almost impossible to maintain a one-month’s reserve.

The following are items included in our plan to improve the financial condition of the Russellville City School System, and in doing so, increase our one-month’s operating balance.

1) County one-cent sales tax

Our county recently passed a temporary one-cent sales tax, which will be in effect from January 1 until the general election in June when the tax will be voted on by the public. We are actively working to get this tax passed, as it would bring in an estimated $800,000 per year in additional revenue for our system.

2) Funding from the city of Russellville

Maintaining our designated level of funding from the City of Russellville has been an ongoing issue for us over the past several years. At this time, we are receiving our 38.33 percent share of the three-cent sales tax, and we will continue to work with our local officials and city council to maintain this funding. It is crucial to our financial stability.

3) ARRA Funding

We chose to use our ARRA funding primarily for personnel expenditures. This allowed us to retain personnel that we may have lost otherwise. We used half of our ARRA funds for 2009-10. Therefore, we will have the remaining half to budget for personnel expenditures in 2010-11.

4) Staffing

In an effort to reduce costs in the 2009-10 year, we cut our staff back to only 1 local teaching unit.  While this has helped us with our financial position, it is not something we can do long-term without seeing negative consequences. As we budget for 2010-11, we will again make cuts where possible, while trying to balance student needs with financial realities.

5) Operating expenses

As part of our overall financial strategy, we are continuously looking for ways to reduce our operating expenses. For example, our principals and staff were asked to take energy saving measures to reduce utilities expenses. As a result, our utilities expense is down from last year (fiscal YTD through February) by $29,585 or 11.6 percent.

We will continue to proactively reduce other such expenses such as professional development and maintenance items.

6) Federal funds

We are already using the largest portion of our federal funds for salaries and benefits, but we will look for ways to maximize that further, within the constraints of the Federal guidelines.