Caldwell School Board Faces Tough Budget Choices

Oak Hill School could be closed to avoid drawing down Fund Balance

By Michael M. Barrick

LENOIR, N.C. — Since auditors warned the Caldwell County Board of Education in late 2019 that it needed to quit dipping into its Fund Balance (savings account) to supplement spending, Superintendent Dr. Don Phipps and his staff have been charged with finding $2.5 million in savings for the 2020-21 school year. In a recent in-depth analysis of public school budgeting based on interviews with Phipps, we reported that dropping enrollment, the state budget impasse and other factors are stressing the school system’s budget.

Dr. Don Phipps

Regardless of the causes, it falls to the seven members of the Caldwell County School Board to make the tough budget choices needed to reach that goal. Yesterday, in a special budget session of the school board, Phipps presented a proposal that could yield the school system $2,491,089 in cuts and/or savings.

None of the choices are likely to be popular among board members or the public; no decision, however, will be more challenging — and likely controversial — than the option of closing Oak Hill School. However, it also offers the largest chunk of savings — nearly $1 million.

In our previous interview, Phipps said, “It is the school that we have 9.3 total positions above what the state allocates money for.” He continues, “Are there other things we can look at? Yes. As we have prepared for the building of this budget, our district-level team has considered many options to include in our budget discussions. We wanted to provide our board with as many options to consider.” He continues, “We are proposing many things and the Oak Hill conversation is one that we need to have. Not an easy one, but a necessary one.” He adds, “We are not discussing other facilities at this time.”

While in the first interview Phipps acknowledged that he was considering the option of spreading the $2.5 million cuts over two years, he said today that providing the school board options to complete the cuts this coming year was “based on the feedback of the audit. They suggested strongly that the budget building team come back to the board this year with a budget that doesn’t use any fund balance. It’s safer not to touch fund balance at all. That’s why I did it.”

During the board meeting, which was streamed live, Phipps offered the following options for cutting costs by a total of $1,506,095:

  • $46,112 Programs/Agencies
  • $100,000 Transportation
  • $657,983 Personnel
  • $200,000 Departments
  • $502,000 Indirect Costs

Closing Oak Hill School would save an additional $984,994. If the school board chooses to accept every proposal, the cuts would total $2,491,089, reaching 96 percent of its goal.

Oak Hill Yellow Jacket

Phipps acknowledges that none of the options are desirable, but necessary to consider if the school system is to meet the auditor’s recommendations. He also cautions that more work remains. “This is my first pass at it. I wanted to give something that is helpful and meaningful to the board. It’s their first opportunity to see the budget.”

In addition to proposed cuts, Phipps pointed out that the school board has to operate while dealing with several unknowns, including the state budget, low wealth funding for the next school year, the appropriation from the county commissioners and fixed cost increases of $143,000 for locally paid employees. He also points out that the impact of the pandemic is unpredictable and could lead to unexpected costs and possibly even savings.

During yesterday’s meeting, the board voted to direct Phipps to assess the pros and cons of closure and non-closure of Oak Hill School. He says the study would be “comprehensive.” He explains, “We will look at capacity numbers, pattern numbers (where students go), bus routes, when children would get on buses, long term capital needs out there and more.” He continues that these consider the closing only from “an economic perspective.” He adds, however, “The one that is hard to quantify is the community response. People identify with the K-8 school. They like the environment. It is central to the community. There is concern that closing it will alter the community.”

To get a better measure of the intangibles associated with the closing, the school board is planning a meeting next Tuesday (Mar. 31) at 6:30 p.m. to hear from the community. However, because of the Coronavirus pandemic, Phipps says the board will meet without the public present. The public will be provided with other ways to offer comments. Though he says exact details are still being worked out, he expects, “People can send in a comment to be read into the record as if they were speaking from the podium. Or if we can contact them via telephone, the board will hear in person what they would say, again as if they were at the podium. It will be streamed as well.”

As for the decisions facing the board, Phipps says, “I know the board will consider all we provide to them. At the end of the day, they will do what is best for the school system.”

© Michael M. Barrick, 2020

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