The Limestone County School Board will fall more than $1 million short of its fund balance goals despite teacher unit and departmental cuts earlier this year, according to the 2019 budget presented Tuesday.

The already critically low fund balance would see an increase of only $600,000 by the end of the 2019 fiscal year. This would leave the account with an estimated 40 percent of total monthly operating expenses, even with conservative projected spending.

It also falls significantly short of the $1.7 million the district had hoped to put toward reserves. State law requires all public school systems to have enough money in reserve to operate for one month.

For Limestone County, that figure is now approximately $6.5 million.

According to Board Member Bret McGill, much of the discrepancy is due to unexpected costs resulting from the 2.5-percent school employee raise approved by the Alabama Legislature in February.

Kimberly Hubbard, the system’s chief financial officer, said the state will only cover raises for 9-month employees, leaving local systems on the hook for employees who work more than 187 days, such as central office secretaries and locally funded teacher units.

This gap in state funding means the district will have to pull approximately $100,000 from its general fund each month to cover the additional raises, or around $1.2 million per year.

Superintendent of Limestone County Schools Dr. Tom Sisk also noted the system had to pay more than $200,000 to the state for a 10-mill match and account for several items left off of last year’s budget, including legal fees.

According to the website www.alabamaschoolconnections.org, “applying a standard formula to information gathered from county revenue offices, the value of 1.0 mill is determined for each system and then multiplied by 10 to determine the local system’s contribution to the Foundation Program. This amount is then subtracted from the amount budgeted in the Foundation Program total each year for that system. The balance is the state’s share from the ETF (Education Trust Fund).”

“When you take all of those things into account, you can see how they eroded how much we could put toward the fund balance,” Sisk said.

McGill added he is “cautiously optimistic” that increased local revenues will actually bring in more money than Hubbard projected.

“She did what we wanted her to by projecting revenues lower than they’ll probably be, but we are hopeful that there will be an increase in revenue above what has been projected. This will allow us to make up that $1 million,” he said. “We have been assured that any additional revenue that does come in will go toward restoring the fund balance.”

Sisk added he is hopeful the county will see an increase in their share of a local sales tax they split with Athens City Schools. The tax is divided proportionally according to each system’s Average Daily Membership. Athens City School is already reporting an estimated increase of 200 students, but Sisk is confident growth at Alabama Connections Academy, a virtual school program based in Limestone County, will translate into a greater portion of the pie.

Currently, Hubbard projects total revenues for FY 2019 to be $78.4 million, which includes funding from state, local and other sources.

Expenditures, including instructional services which account for 81 percent of yearly costs, are projected to be $70.6 million. The system will pay $8.4 million in debt service and has the potential to spend $1.2 million on capital projects.

The system started out with $1.9 million in its fund balance and will end with $2.5 million.

According to the Alabama State Department of Education, the state will provide LCS $59.9 million in funds, up $2.8 million from the 2018 fiscal year. The additional funds will go to instructional support, technology, transportation, library enhancement, school nurses, professional development, at-risk programs and capital purchases. The state will also fund 50 more teachers at ALCA.

Overall, Sisk is pleased with this year’s budget.

“We are not growing as fast as we hoped, but I am pleased we have a budget that is solid and is showing an upward trend despite of additional costs to operate,” he said. “It is adequate to take care of our kids the way we need to, not necessarily the way we want to. We are still able to support our programs and provide technology to our students, although we are not growing as much as we wanted to.”

The board will have a second public budget hearing Sept. 11 at the Clinton Street Courthouse Annex in Athens.