SAVANNAH, GA (WTOC) - Savannah-Chatham County Public School System leaders are looking at ways to better manage their budget this new fiscal year.
This meeting comes just a month after the Board of Education voted to take out a $21 million loan, just to be able to cover payroll.
Last month, the board took out a tax anticipation note, which is a loan that will be paid off once the school district collects the money they will receive from property taxes. That money is expected to come down in December.
When it does, the loan will be paid but it will have cost taxpayers nearly $150,000 in interest alone.
“Timing got us this year, because the cash reserve wasn’t as high as we needed it to be, but it was more of a timing issue. If we were able to collect taxes, more than the two big deposits in a year...if it was three big deposits in a year, or quarterly...we wouldn’t be having this discussion," said SCCPSS Chief Financial Officer, Larry Jackson.
School board officials say there wasn’t enough money this year to cover new state mandates and rising costs in areas like employee benefits, healthcare and retirement.
“We have built a budget annually, except for this year, that depended on fund balance," said SCCPSS Superintendent, Dr. Ann Levett, during the meeting. "And that has taken its toll each year. I think it’s also important that the people have a full understanding of funds and how they may be used.”
Even though the district increased the millage rate by 2.25 mills, taxes wouldn’t be collected in time to cover the shortfall.
The last time the school district had to take out this type of loan was in 2009.
Some on the board say utilizing the TAN is a fairly common practice in government, but others disagree.
“Contrary to some of my colleagues, I do not think that TAN’s are not standard operating business, and I would like to not be spending our money and our time on that," said 1st District Board member, Julie Wade.
The school district's finance team explained that the fund balance helps protect educational opportunities in the event of a financial disruption, serving as a mechanism to preserve a balanced budget.
As that fund drops and expenses grow, then you have a recipe for a cash flow concern.
Board members stressed during the meeting, along with several others, that when discussing best budgeting practices and priorities moving forward, that the public needs to be involved.
Here’s a look at the five objectives the school system has in place for developing budgets:
-Goal one is to ensure all students are college and career ready.
-Goal two is to provide a supportive learning environment that is conductive to teaching and learning.
-Goal three is maximizing family and community engagement that contributes to the advancement of student success.
-Goal four is to build a professional capacity to help achieve a premier student-focused workforce.
-Goal five is to maximize resource stewardship and fiscal responsibility.
The next meeting for the committee will be Dec. 10.