Russellville City Schools BOE approves operating budget

The Russellville City Schools Board of Education approved its operating budget Sept. 9 after hearing a detailed breakdown from Chief Financial Officer Lisa Witt.

Witt reported total revenue of $36.6 million and expenditures of $41.3 million. She explained the difference relates to the ongoing construction at Russellville High School.

Witt explained school systems across the state take attendance on a certain day in the fall, and that enrollment number is used to determine funding received from the state the following year. Because of COVID-19, Russellville City Schools had an unusually low number to report this past year, as did many other school systems. As a result, the school system lost 2.5 teacher units; however, thanks to state-provided one-time funding through the Teacher Stabilization Fund, RCS gained back 3.5 teacher units, for a net positive.

“We’re also getting funds for advancement and technology, and this is our fourth year in a row to get these funds,” Witt added. “The biggest focus for this money in past years and for next year is for capital and maintenance projects, though it can’t be used for new construction.

“We’ve been able to do a lot of small to medium projects that might have otherwise stayed on the capital plan for much longer.”

Witt also noted the expense of $70,000 per year for property insurance premiums, as well funds to pay for the school resource officers. She explained those items would normally have to be paid for with local money, but the additional funds for advancement and technology make that unnecessary.

She said that while it’s not considered an ongoing line item, RCS is likely to receive the money for a few more years.

“We’re also receiving proceeds from a state level bond issue that was done this year,” said Witt. “This is the first state level bond issue for public schools since 2008, and it’s one we don’t have to pay back.

“Our share is $3.4 million dollars, and we’re going to use the whole amount for the high school construction project – a little bit on Phase One, which is going on currently, and the bulk of it on Phase Two.”

Witt said federal revenue is up because of money received from COVID-related provisions, including the CARES Act and ARFA.

“The first allocations were geared toward detecting and preventing COVID and to facilitate virtual learning,” she said. “We also bought a lot of masks, face shields, hand sanitizer, disinfectant thermal cameras and other cleaning supplies. Additionally, we paid for substitute workers when workers had to be out due to COVID-related issues.”

Witt listed additional expenses covered under those funds as extra nurses, custodians and a technology assistant, as well as the purchase of 1,200 Chromebooks to help students with virtual learning. She said some of those funds can still be used.

Funds will also be directed toward after-school and summer learning programs, in addition to the 21st Century program that’s already in operation. Several classroom teachers and extra teachers and aides have also been hired. “A lot of our hiring has been for temporary positions,” said Witt.

Every penny of state and federal funding must be spent for the designated purpose during that timeframe or else returned. Witt explained that’s why there’s no real way to accumulate funds over time from the state and federal money.

“Local money is where we have some discretion and the ability to save for a large capital project,” said Witt. “It’s what you have to have if you want to provide anything outside of the very bare basics.” She explained that among the extras are advanced placement classes and extracurricular activities such as band, athletics, robotics and rocketry.

“We want to be an excellent school system and continue to offer these activities,” explained Witt. “We don’t want to offer only the absolute basics.”

For RCS, local money includes sales tax, ad valorem tax and the support received from the City of Russellville every year. This year, there is a new source of local revenue made available from the Simplified Sellers Use Tax, based on a law passed at the state level for a flat 8 percent tax on online sales. Collected at the state level, most of it is then pushed to cities and counties.

“At that point,” explained Witt, “it’s between the cities and counties and the local school boards as to how much, if any, of that goes to the schools, and that has been a very controversial and heated topic some places.” She said RCS is fortunate in this area thanks to an agreement reached early on with the Franklin County Commission to share in the SSUT for Franklin County. Under the agreement, the county commission keeps one third, and the remaining two-thirds is split between Russellville City Schools and Franklin County Schools, based on student numbers.

Witt said the first check for RCS was received in January, and the budget for the new year will be their first full year of benefiting from that tax. She said $160,000-$170,000 is expected for the year, and that number should continue to grow as people continue increasing how much they buy online.

Witt said personnel expenses are the largest component of expenditures, up 11 percent over the previous year’s budget “mostly due to all the new hires with the federal money we have.”

She reported 362 on staff, up 44 from the previous year. Among them, 218 are certified, and 144 are support staff. Support staff includes child nutrition and transportation, as well parks and recreation.

“Our biggest project at present is the construction at the high school,” Witt said – the two-story addition to the front of the school that will connect the cafeteria and media center, as well as add 15 classrooms, two science labs, a storm shelter and new administrative offices. Witt cited estimated completion to be spring 2022, noting that the plan is to have students in the building by fall 2022.

Witt said the project cost is $12.3 million – $10.7 million of that for the contractor. “That piece was funded by the bond issue we did with the city,” said Witt, “and that leaves $1.6 million that we are absorbing into the general fund, capital outlay and some from the state bond. We knew up front that quite a bit would have to be absorbed into the general fund.”

Witt said she has been working to build up the general fund to help defray the impact of this expense. She said the second phase of the high school construction project is for renovation of the career tech area and the addition of four classrooms; the plan is bid that project around March or April 2022. She said the bidding process will be “trickier,” with the increased cost of building because of COVID-19.

“We’re unsure what to expect on that front,” said Witt, “but our up-front estimates project around $3.5-4 million dollars, with the current allocation at $3.6 million, with the bulk of that being paid by the state bond. So, it should not be as big of a hit to the general fund as Phase One.”

The RCS October board meeting will be Oct. 28 at 8 a.m. in the board room.