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School Board approves revised General Fund Budget for FY 2016

By Bill Short

Millington Schools logoBecause its allocation was decreased by the city, the Millington School Board approved a revised General Fund Budget this week for the 2016 fiscal year.
Board members took the action Monday night during their regular monthly meeting on a motion offered by Chuck Hurt Jr. and seconded by Larry Jackson.
The motion was passed by a 6-1 vote, with board Vice Chairman Greg Ritter dissenting.
During discussion shortly before the vote, Chairman Don Holsinger said the revision is designed to “meet the requirements” of what the city gave the board. That is $500,000, plus $233,000 to cover the payment to the Shelby County School System for Millington’s four school buildings.
By identical 4-3 votes, the Board of Mayor of Aldermen approved the first and final readings of the city’s 2016 Budget Ordinance on June 9 and 15 with an $870,000 decrease in the school system’s funding request.
Although the “bulk of that shortage” was taken out of the system’s capital outlays, Holsinger said there are “a bunch of other small changes” reflected in the revised budget.
“That was due to some changes to the salaries that were required because of the salary structure we approved last month,” he noted. “It required some changes to it that ended up costing us about $40,000 for benefits and salary changes.”
Bruce Rasmussen, supervisor of Financial Services for Millington Municipal Schools, said the board’s first annual payment to the county school system was made “about the third week” of October 2014.
Dr. David Roper, superintendent of the municipal school system, said the county would assess a “penalty” if the board “missed” one of the payments.
Ritter said the agreement is with the school board, not between the county school system and the city board.
But while citing his belief that both boards signed the “paperwork” for the agreement, Holsinger said the city is also “on the hook” for it.
Board member Louise Kennon wondered whether this is a “legal question” now. Although the city board has agreed to make the payment, she said the school board is still “legally responsible” for it.
“If they insist on doing it,” she noted, “we need some kind of guarantee that it will be done and done on time.”
When both Jackson and Kennon said they thought the agreement was that the money has to come from the school board, Holsinger promised to “check on that and report back.”
Because the payment is due by Nov. 1, Ritter recommended that the school board “cut a check and get reimbursed” by the city board.
On a motion offered by Kennon and seconded by Hurt, the board adopted a resolution recommended by its attorney Steve Shields. The motion was passed by a 5-2 vote, with Ritter and C. J. Haley dissenting.
The resolution states that the board believes the “funding denied” to the school system “rightfully should be allocated” to it.
It acknowledges that the system’s budget has been adopted “as funded” by the city board. But it notes that the school board “reserves its right” to pursue additional funding by “any legal means that are necessary and permitted.”
Shortly before the meeting was adjourned, Holsinger recited a statement he prepared as a response to the press release published in the July 2 edition of The Millington Star.
Submitted by the city administration, the press release addressed the school board’s June 23 vote to seek legal counsel on retrieving funds generated by the half-cent sales tax increase.
Holsinger said the school system has decided not to be drawn into a “media argument” on this matter. But he believes the school board has a “responsibility” to address some of what it considers “inaccuracies, omissions and misstatements” that were made in the press release.
He cited the city’s statement that it will provide approximately $800,000 to address the “inadequate drainage and deteriorating road conditions” around Millington Central High School.
While calling this the city’s “responsibility,” Holsinger said “in no way” can it be considered either direct or indirect school funding.
“This would be like saying that, since the Millington Fire Department would provide fire protection to the school,” he noted, “the cost of the fire department is indirect funding to the schools.”
The board chairman also cited the city’s statement that it provided $800,000 in the 2015 fiscal year to create a “fund balance” for the school system.
“What is not explained is that it was provided to us for fund balance under the stipulation that it still had to be there at the end of the year,” he said. “We could use it for temporary cash flow, but could not expend any of it for school operations in FY15.”
Holsinger labeled as “quite misleading” the city’s statement about funding it is required to provide for school operations. He said it refers to Maintenance of Effort, which is calculated as an amount equal to a 15-cent tax levy on each $100 of taxable property.
“According to the state law that allowed the creation of new school systems,” he noted, “this rule is not in effect until FY17. Because of this, there was no specific figure established for FY14, 15 or 16.”
The board chairman said Tennessee Code Annotated Section 67-6-712 states that at least half of a Local Option Sales Tax must go to schools. So, with a $1,415,000 collection estimated for this year in Millington, he said the minimum school funding required from this source would be $707,500 for the 2016 fiscal year.
Because the $733,000 allocation is only 3.6 percent above that amount, Holsinger called it an “exaggeration” when the press release stated that the city is providing “well above what is required.”
He said the school system was “very satisfied” with the funding it received in the 2014 and 2015 fiscal years. And he expressed hope that it can “entertain a conversation” between representatives of the two boards to “properly explain our needs and plans for the future.”

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