The Newport Independent School District is working on decreasing its current budget deficit of $1.9 million before it officially gets submitted to the Kentucky Department of Education.
The school board met during a work session on Oct. 2 to discuss the actions it has already taken to decrease its deficit and what actions are still available. The total budget deficit is $1,963,993, which Newport Independent Schools Finance Director Jennifer Hoover said was the worst-case scenario.
That number comes from total projected revenues of $17,766,986 and total expenses of $ 19,730,979.
The conversation was carried over from a Sept. 11 work session, the meeting minutes of which show that Hoover said she would ask the board to transfer $1,639,960 from the investment account to balance the budget before submitting the working budget to the Kentucky Department of Education.
This would leave the district with a contingency of $437,500 or 2.14%.
“It does put us in a financial strain because it takes away our backup, our fallback, in emergencies,” Newport Board of Education Chair Ramona Malone said. “If something should happen, we won’t have that money to fall back on. So that is a concern, and it reduces our contingency to 2%, which is concerning for me as well. My concern is that we want to make cuts, but we do not want to operate where we can’t do what we need to do for our children; that needs to be our priority.”
The budget is due to be submitted to the department of education by Friday, Oct. 4; however, Hoover said she asked for an extension.
The discussion from the Oct. 2 meeting focused on finding ideas for decreasing the budget deficit without borrowing as much money from the investment account. Because it was a work session, no action was taken. The board set a special meeting date for Oct. 16 at 6 p.m. to take a final vote.
During an August regular board of education meeting, the school district set its new tax rate at $7.68 per $1,000 of assessed property value. Four proposals for the 2025 rate ranged from the compensating rate of $7.68 on the low end to the highest proposal of $8.84. The school board took a lower rate than Newport Independent Schools Superintendent Tony Watts’ recommended.
“I brought to you all a recommendation regarding the tax rates,” Watts said. “We can argue about what that amount would have been, but we can all say that it wouldn’t have been as bad if we had taken my recommendation there.”
One solution Watts suggested was selling its billboard lease to Landmark Dividend, which would bring in $725,000. The district owns the land and leases it. Norton Advertising owns the billboard. The billboard is on Newport High School property.
Watts told LINK nky that Newport Independent Schools attorney Brandon Voelker is looking into the idea, but he isn’t sure that the Kentucky Department of Education will allow it.
Watts also mentioned possibly partnering with the city to sell a bus lot on Route 9 for roughly $500,000.
“So those two recommendations I’m making, if that works out, will give us a head start on repaying the money that we’re asking to borrow,” Watts said.
He said the district wants to return at least $200,000 to the savings account by the end of the year.
Watts also listed items from his budget that had already been cut, reflected in the $1,963,993 deficit.
He said the beginning-of-the-year T-shirts were cut for $9,500, and Christmas T-shirts were cut for $9,000. Last year, he said the district spent about $2,470 on teacher appreciation and would still be doing something this year, but with cutbacks. Watts said the end-of-the-year celebration cost them about $5,500 last year, and he would try to find a sponsor for this year. This totals $26,470.
Watts also said he plans to not take any travel or car mileage reimbursements. He said he would save the district roughly $1,000 by taking a district vehicle versus his own. He also said he would cut his travel expenses by approximately $5,500 per diem.
The district is also currently in a hiring freeze. Newport Board of Education member Aaron Sutherland requested a review of all filled and unfilled positions and to be provided recommendations on eliminating any non-essential positions by Dec. 31.
There are only two unfilled positions in the district currently, and Hoover said she has those reflected in the $14,120,000 payroll budget.
“We have to decide, are we willing to give up our reserves and all the cash on hand so we can pay for people’s lunches and do other things that may or may not be necessary,” Sutherland said. “We’re being told that these are the most cuts that they can do. But it’s not enough. It’s not enough because what happens next year when we have the same expenses? We don’t have the money to do this.”
Sutherland challenged the superintendent and staff to create a budget within its revenues or close to it because he would not authorize the current proposals.
“I know we’re in a pinch here,” Newport Board of Education member Sylvia Covington said. “I know we got to squeeze the budget, but we also need to think about the services that our children need and the staff to give our kids these services.”
Another topic of discussion was Hoover’s cushioning of the budget for retirement purposes.
The district has 12 people indicating retirement. They are required to pay out the remaining sick and vacation days to each retiree and have budgeted in the case that all 12 choose to retire. Hoover said only two of those 12 have submitted official paperwork.
The board discussed removing those line items from the budget report and just keeping them on the balance sheet.
Hoover said if they removed the $800,000 she had budgeted, it would bring the deficit down to $1.1 million.
“So the $800,000 that I have budgeted there would still be sitting in the investment account, and then at the end of the year, if we were to need it, which hopefully we don’t, because we’ve been able to cut additional expenses, and we’ve got extra revenues that we think are coming down the pipe, but we can’t account for now, and we may not even need it,” Hoover said.
The budget breakdown as of Oct. 2 can be viewed here:
2_GFWorkingBudgetBreakdown_0 by webeditors on Scribd
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