The Transylvania Times -

School Attorney Refutes County Official's Claims


May 20, 2019

In a letter written to the Transylvania County Board of Education dated May 9, school board attorney Christopher Campbell refuted many of the comments made by Transylvania County Finance Officer Jonathan Griffin regarding the school board’s proposed budget that was submitted earlier this month.

In an email dated April 30, from Griffin to the county commissioners and County Manager Jaime Laughter, Griffin wrote, “The document submitted by the Superintendent is not a budget.”

But in his letter, Campbell wrote, “In short, the historic format used by the Transylvania County Board of Education to submit its funding request to the county each year conforms with the law.”

In his email to the commissioners, Griffin wrote state law requires school boards to present their budget in a uniform format that accounts for all types of funding, including state, federal and local funding, but that the budget presented to the commissioners only presented the local portion of the Transylvania County Schools budget.

“Your role as county commissioners is to pick an appropriate number on top of the state and federal funding necessary to provide a system of free public schools, not to decide on how much of a ‘local’ request is worthy of funding,” wrote Griffin.

Since the budget submitted by the Board of Education did not include state and federal funding, according to Griffin, “the Board of Education and the superintendent have not submitted a document that meets the standard of a ‘budget’ and therefore have not fulfilled their obligations under law to submit a budget to you by May 15.”

Before delving into the specifics of Griffin’s claims, Campbell noted in his letter to the school board that the “Board of Education is a separate entity of local government and not a department of county government.”

He explained there is a difference between “budget preparation” that begins in May and the adoption of a “final budget” by the Board of Education, which usually occurs after June 30 due to state and federal funding.

According to Campbell, there are four factors that drive the budget process between the Board of Education and the Board of County Commissioners.

General Statute 115C-427 says the superintendent must prepare a budget message that contains the educational goals and explains the reasons for changes from the previous year regarding educational or fiscal policy.

Campbell wrote that in his 22 years of working with more than 20 school boards, school boards present county commissions a budget message that identifies the percentage of overall revenue sources and a general description of how those funds would be used.

“After that,” wrote Campbell, “the detailed focus for the budget and budget message is always ‘what changed from last year’ and specifically, ‘what additional dollars are needed from the county and why.’”

The second factor, according to Campbell, is General Statute 115C-429(b), which states the county commission must complete action on its budget on or before July 1, and “determine the amount of county revenues to be appropriated in the county budget ordinance to the local school administrative unit for the budget year.”

“Thus, by law, the county does not approve the overall Board of Education budget or budgeted uses of federal and state funds by the Board of Education,” wrote Campbell. “Instead, the county ‘appropriates’ local dollars to the Board of Education in the county’s budget based on the information received from the school board.”

Campbell wrote the county commissioners could seek “additional information” from the school board, but that information would not include a “complete final budget” because state and federal revenues are not known until after the Board of Education submits its local request to the county.

The third factor, Campbell wrote, is General Statute 115C-432, which states “After the board of commissioners has made its appropriations to the local school administrative unit (after any budget dispute process), the Board of Education shall adopt a budget resolution making appropriations for the budget year in such sums as the board may deem sufficient and proper.”

The final factor, according to Campbell, is the state budget may not be known until after June 30. As a result, school boards often pass a “continuing budget resolution” which allows them to spend money based on prior years until the state adopts a final budget.

“In conclusion,” wrote Campbell, “the statutory progression creates a simple and straightforward two-step process: 1) using a budget request and budget message, the Board of Education tells the county what has changed financially from the prior year and why the board needs the money requested from the county; and 2) after the county makes its appropriations to school operating and capital, the Board of Education passes a final budget or utilizes a continuing resolution until all state and federal funding levels are known and then adopts a budget.”

In addition to having different views on whether or not the Board of Education complied with state statutes regarding its budget, Griffin and Campbell also presented different advice on what can be funded and how much should be funded.

Griffin noted the school board request for current expense funding is $582,196 higher than last year, an increase of 4.78 percent.

Griffin specifically noted the increases for retirement and health insurance for locally paid employees.

In response, Campbell reiterated previous statements by Superintendent Jeff McDaris and Norris Barger, director of business services and plant operations, that the school system pays the higher paid teachers with state revenue. Local funds are used to pay teachers who receive the lowest pay.

“However,” wrote Campbell, “when the state gives a raise to employees, Transylvania County Schools must match that raise by law from local dollars. Moreover, increases in the retirement and health care contributions for these employees must be matched from local dollars, as well.”

He also added that having teachers paid by local funds is a “common practice across the state.”

In his email to commissioners, Griffin said, “We have never received clarification as to why they have said both this year and last year that the K-3 class size mandate is not funded and requires cuts from elsewhere.”

Campbell wrote there are four areas that are “putting significant pressure on local school budgets.”

Those areas are the mandatory lower class size for grades K-3, school safety, special education and mental health.

He also noted that “the enrollment of a handful of new students at the time school begins in August or September can force the Board of Education to hire new teachers at one or more schools since the law caps the number of students that can be included in certain classrooms.”

On the other hand, a decrease in enrollment does not necessarily result in an equal decrease in expenditures.

“Fewer students in a future year may or may not result in fewer teachers needed based on class sizes,” he wrote. “Kids do not enroll or leave in ‘class-size’ increments.”

Campbell also stated the state of North Carolina does not fully fund special education. Since the school system is bound by law to meet those students’ needs regardless of state funding, at times “local money must be used to meet the needs of these students.”

In regard to the impact of charter schools on the budget, Griffin wrote, “County school systems are required to pass along all locally received funding on a per capita basis to charter schools based on enrollment. An increase at all necessitates proportional increase in money passed along to Brevard Academy. I do not believe you have the legal authority to fund this.”

Campbell, however, wrote, “When the county funds the Board of Education, it also funds charter schools because a pro rata share of local dollars follow each child living in Transylvania County whether or not these schools are located in the county.”

As school admin-istrators have stated at previous board meetings, approximately two dozen students whose residences are listed in Transylvania County attend charter schools outside the county. Local funds for those students, as well as local students who attend Brevard Academy, “pass through” Transylvania County Schools.

Campbell also stated “the funding scheme for charter schools does not consider students who were never enrolled in public school (i.e. former private school/home school students), which dilutes county funding even further.”

Griffin also questioned the school board’s request to appropriate funds for the child nutrition program.

“It is unclear under the law whether or not it is legal for you to appropriate funds to a nutrition fund,” wrote Griffin. “A school’s nutrition fund is an enterprise – it should be run with business practices in mind and it should pay for itself the same way a water and sewer system or solid waste system should.”

Campbell, however, said, “School boards face significant pressure in maintaining ‘enterprise’ fund operations based on the critical needs of children. Child nutrition is a crucial function of public schools and a part of the school ‘operations’ referred to in General Statute 115C-426(e).”

Campbell noted the child nutrition is primarily paid for by federal funding or students paying for their meals. However, if those funds do not cover the costs of the child nutrition program, he said, “it is not illegal for the Board of Education to make up a short fall using local dollars.

“In fact, the ‘enterprise’ fund of child nutrition is already directly subsidized by federal dollars, thus the use of government funds to feed kids is a basic concept.”

As for the capital funding requests from the school board, Griffin said he finds the budget for the next five years “concerning.” He said the budget in February called for $98 million in expenditures, of which $68 million would be covered by the bond passed in November.

But he also said the budget was revised down to $75 million, which “should raise questions about whether or not the facility needs outlined initially were truly legitimate needs if so much could be written off over the course of three months.”

When asked about the $75 million figure, McDaris said he was not sure where Griffin got that figure.

As for capital funding from the county commissioners, Campbell wrote, “By law, the county must use a certain percentage of local sales tax on school capital or debt” but that amount rarely covers the capital needs of the school system.

According to Campbell, the Board of Commissioners and Board of Education should discuss and decide upon the use of lottery funds, but “lottery funds do not have to be included in the capital funding budget request from the Board of Education to the county each year.”


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