The Newport Independent School District will transfer $1 million from its investment fund to balance a budget deficit of $937,930 before sending it for review to the Kentucky Department of Education.
The school board met during a work session on Oct. 16 to discuss the final budget before sending it for approval. The conversation was carried over from the board’s discussion at an Oct. 2 work session, where it discussed how to decrease a budget deficit of $1,963,993.
Newport Independent Schools Finance Director Jennifer Hoover said the additional $12,070 from that $1 million being transferred will go into the school’s contingency.
The deficit of $987,930 comes from the school district’s revenues of $17,766,986 and expenses of $18,754,916. This would leave the district with a contingency of $425,000 plus the $12,070 carried over from the investment fund.
To reduce the budget, Hoover said she removed the remaining sick and vacation day line items from the budget for possible retirees. Those numbers included $350,000 in sick leave liability payout and $283,000 in vacation liability payout. Hoover told LINK nky that she also removed amounts from other areas of the budget including estimated athletic stipend amounts to reduce the deficit.
She clarified that the district has the money for the sick leave and vacation payouts; they are just not budgeting it for right now. The district has 12 people indicating retirement and is required to pay out the remaining sick and vacation days to each retiree. It had previously budgeted in the case that all 12 chose to retire. Hoover said only one of those 12 has submitted official paperwork.
“There’s a lot of misconceptions going around about it [sick leave.] At no point was teacher sick leave ever in jeopardy,” Hoover said. “What we had briefly discussed in the prior meeting was removing it as a budgeted line item at this time and leaving those funds that would be used to pay out any sick leave or vacation leave at the end of the year in the investment account.”
The $425,000 contingency is the school district’s beginning balance for next year if they do not incur any additional revenues or expenses.
“This year, we have a $2,063,000 beginning balance; next year, we’ll probably have a $425,000 beginning balance,” Newport Board of Education member Aaron Sutherland said. “So we’re going to have to make some pretty deep cuts next year, based on the fact that we’re going to have a million and a half less dollars.”
Newport Board of Education Chair Ramona Malone said that next year, the school board will be alerted about any budget changes as they occur. For example, Malone said that if budget line item two has $30,000 available and all the money from line item three has been spent, the money from line two can’t be moved to line three without board approval.
“When the board approves the budget, it approves all line items, and so any spending over that budget needs board approval,” Malone said. “So, we just want to make sure that we understand that, and we talked to Miss Hoover and to the auditor; they’re also going to assist us with monitoring the budget because it is a tight budget.”