The Limestone County school board issued a joint statement Tuesday addressing recent concerns over the district’s budget troubles.

Board member Edward Winter read the statement before a packed house during a regular meeting at the Limestone County Career Technical Center. The document was also posted Wednesday to the Limestone County school system’s Facebook page.

In the document, which was approved by all seven board members, the board takes “all responsibility for the current financial situation of Limestone County Schools.”

The document goes on to outline how the board ended up having only 38 percent of a one-month’s operating budget in reserve. State law requires all public school systems to keep in reserve the equivalent of at least one-month’s worth of operating expenses. For Limestone, that is $5.9 million.

New construction projects, including a $33 million elementary school in Lester, construction remodels at several county schools, the purchase of MacBooks, iPads, network cabling and safety measures such as SafeDefend and School Resource Officers are listed as “items that contributed to the lowering of the general fund balance.”

During a telephone conversation Wednesday, board member Brett McGill added that the lawsuit over how areas school districts could divide tax revenue from annexed land, the loss of students to the Athens Renaissance School and an overall decline in student enrollment also cut into how much money the district brings in.

“The bottom line is that as their virtual school (the Athens Renaissance School) grew, our portion of tax revenues dropped,” McGill said. “But now we’ve offset the enrollment at Renaissance with the Alabama Connections School.”

Alabama Connections is a virtual school based in Limestone County. Started in the 2017-2018 school year, the county is allowed to count the students enrolled there for the purpose of determining their share of local tax revenue — a pool of money that is divided proportionally between Athens City and Limestone County schools.

McGill went on to say, “we knew how much those projects were going to cost, but we didn’t anticipate the tax situation with Madison (and several other districts) or the state funding shortage (because of decreased student enrollment),” McGill said. “Those (projects) were the things our excess cash flow was going to fund.”

In the statement, the board said it could have “made cuts along the way” because of the decline in enrollment in 2015-2016, which doesn’t have a financial impact until 2016-2017, but “anticipated growth in the economy caused hesitancy to make reductions during this period.”

However, the board was faced with less-than-expected tax revenue from surrounding industries due in part to several Tax Increment Financing districts (TIFs) leaving them with less money in the bank than they had hoped.

The document also addressed the numerous mistakes made in the fiscal year 2018 budget, which the board approved last September at the recommendation of Limestone County Superintendent Dr. Tom Sisk.

As previously reported by The News Courier, more than $2 million was left off the budget for items such as debt service, transportation and the finance department. The money to cover the missed expenses was pulled from already depleted reserves, leaving only enough to cover less than a half-month’s worth of operating costs.

The board addressed the fund balance issue in the statement as well, stating they were able to maintain a one-month’s operating budget “for many years until FY16.” But things started going downhill in FY16 when the fund balance dropped to $2.2 million and even further in FY17 to approximately $900,000. The board said they have $1.5 million in excess revenue over expenditures, which combined with the $900,000 left over from last year will allow them to finish off FY18 with $2.4 million in the fund balance. That number is still $3.5 million short of where they are supposed to be.

Despite the shortage, McGill believes the proposed cuts and cutbacks will help them eventually restore the fund balance.

Winter, however, is adamant the board avoid making proposed cuts to the county’s digital one-to-one initiative. The initiative allows student in grades 4-9 to have access to their own laptop computer.

In the statement, board members also said they “recognized inconsistencies in the budgeting process last summer and those inconsistencies ultimately led to the hiring of the new Chief School Financial Officer.”

The search for a new CSFO to replace Ann Swanner, who retired in December 2017, began in November. Kimberly Hubbard was hired in late January.

During the meeting, the board approved the amended FY18 budget, which adjusted for the more than $2 million in missed budget items and the addition of $1.7 million from first-round cuts. The first-round cuts include departmental reductions and the scaling back of travel expenses for the board and superintendent.

The board also voted to allow the district to open a line of credit, but they did not discuss how the borrowed money could be used.

“We will have to come back on the 10th or 24th (of May, during a future board meeting) to provide guidelines on how the central office can spend it,” McGill said. “I think it’s smart in case the state pays late, we’ll be able to pay our teachers.”

The board tabled the CSFO’s request that they approve a proposed plan that must be submitted to the state outlining how the district will restore the one-month fund balance.

“I think the state requires us to do an amendment if the budget isn’t balancing or if you don’t have one-month’s contingency,” McGill said. “We tabled it because there was some vagueness and ambiguity in getting that fund balance restored. We want a better understand of our digital one-to-one and where the cuts are going to be made before we approve the plan.”