The budget development process for the 2009-10 school year was the main topic of discussion at Tuesday night’s Mount Airy City Board of Education meeting.

“We’re in uncharted waters,” said Dr. Darrin Hartness, superintendent, before beginning his presentation. “There are some critical questions we have to have answered by DPI (state Department of Public Instruction) and the government.”

For the 2008-09 school year, the Mount Airy City Schools funding from the state, federal grants, the local current expense fund, the capital outlay fund and the child nutrition fund totaled $17,279,286. That does not include the $1.9 million for the commons project at Mount Airy High School, which was also part of the year’s budget.

The state of North Carolina provided $10,358,132 of the total monies. That funding went to personnel, including classroom teachers, teaching assistants and other instructional support and building administration. It also went to a number of other programs including textbook purchases, classroom supplies, ABC bonuses and children with disabilities.

“That’s not real common in America. We’re heavily dependent on the state,” said Hartness of the 60 percent of the budget that comes from the state.

Federal grant funds accounted for $1,339,650 of the 2008-09 budget. The majority of that money went to Title I and Title VI-B which deals with exceptional children. That money accounts for about eight percent of the budget.

The local current expense funds are granted to the school system by the Surry County Board of Commissioners and totaled $3,704,619 for the current school year. That number includes the current expense appropriation, which was about $1,125 per student. It also included the 10-cent city school tax, out-of-district tuition and other programs.

The child nutrition fund totaled $1,311,368, or eight percent of the budget. The capital outlay fund totaled $565,517, or about three percent of the budget.

Of the total budget, $12,295,179, or about 71 percent, went to personnel, the biggest expense by far. That number is because of the nature of a school system and its need for a large number of employees. Of that 71 percent of the budget, about 60 percent went to teachers.

Reversions asked for by the state also played a role in the budget for the 2008-09 school year. In November, the state asked for a 0.075-percent reversion, which came to about $65,000 for the city school system. An additional reversion was expected in February, but the state decided to use the second-quarter lottery funds and the Average Daily Membership Corporate Income Tax, or the school construction funds, to address that shortfall. Due to that decision, about $50,000 in construction monies was withheld from the city school system.

“This is not going to affect the commons project,” said Hartness. “But it will affect the cash flow for other projects in the county.”

With the figures from the 2008-09 school year in mind, administrators have begun to make projections about the 2009-10 school year and what type of funding will be available and will be necessary to keep the school system operating as it is now.

There is a possibility that salary increases will be based on experience, with licensed classroom teachers and classified staff receiving a salary increase with each year of experience. There is also a projection for utility increases of about $21,000. In 2005, the General Assembly passed legislation stating that schools could not apply for sales tax refunds. With the continuation of that legislation, which is not expected to be overturned this year, the school system will lose $25,000 to $30,000 in revenue.

The presence of Millennium Charter Academy will also continue to have an impact on the Mount Airy City School System. There are 179 students enrolled in the charter school, causing $1.3 million to be diverted there each school year.

The state planning allotment is based on the number of students the Department of Public Instruction expects to be enrolled in the school system each year. Because of the decision by the state to push back the date for enrolling in kindergarten, there will be a statewide decrease in enrollment in that grade in the 2009-10 school year. There will also be a statewide boom in the same grade for the 2010-11 school year. Because of that decrease and the projected decrease in other grades, DPI has projected a decrease of 54 students, creating a decrease of $232,552 in initial allotment funds from the state.

In addition to those cuts, the state DPI has also presented proposals for a three-, five- or seven-percent budget cut. For the city school system, a three-percent cut would total an additional $219,334, a five-percent cut would be an additional $393,553 and a seven-percent cut would take an additional $705,487.

Given these facts, the best case scenario, without factoring in federal stimulus money, would result in a $332,552 reduction in the budget for the city schools. The worst case scenario, without factoring in federal stimulus money, would result in a $1,038,000 reduction in the budget for the city schools in the coming school year.

There are two unknown factors that are keeping administrators from creating a complete budget for the 2009-10 school year. It is not yet know how Gov. Bev Perdue will divide the stabilization funds from the federal stimulus money among the education entities in the state, including K-12 education, community colleges and four-year colleges. The second consideration is the restrictions of funds for Title I and IDEA, the funds for exceptional children, from the stimulus money. That is about $832,000 for Mount Airy City Schools.

The city school system began making adjustments during this school year to try to compensate and prepare for next year. The administrators have created about $130,000 in savings already by carefully considering open positions due to retirement and resignation and preparing to serve fewer students. The hope is to continue to maintain the class sizes that are in place as they all fall below the state maximum for class size.

Administrators hope to develop a preliminary budget by the March 31 board meeting and will hold a public hearing before going to the county commissioners in April.

“There’s so many unknowns you can’t quantify anything,” said David Rowe, board member, after the presentation.

In other items on the agenda, Bryan Taylor, assistant superintendent, gave a construction update on both the commons project at the high school and the concessions and restroom facility at the middle school. About 75 percent of the footings for the commons project are in place with the remainder projected to be completed by the end of the week. Contractors will then begin looking at installing the flooring and having the steel delivered to begin the framework.

Blue Ridge Enterprises has been hired as the construction agency for the concessions and restroom facilities at the middle school. The project is being funded by the athletic grant money from the county commissioners, and the project is projected to be within budget.

The background checks for the Friendly Neighborhood Dental program have also been completed, and Taylor will begin formulating a plan for that service to begin soon.

Hartness met with the Surry County Economic Development Partnership’s leadership and other administrators from the county school systems to discuss how the educational entities in the county can help with economic development. The group has decided to have regular meetings a few times a year to continue to stay up to date and provide information about programs in the schools.

Monday marked the first day this school year the city school system was closed due to inclement weather. That day will be made up on March 16, a date previously set aside as a teacher workday. June 12 will become a teacher workday.

Contact Morgan Wall at mwall@mtairynews.com or 719-1929.