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Surrell: Cash flow problems projected
by Reggie Ross, Staff Writer
May 15, 2014 | 107 views | 0 0 comments | 36 36 recommendations | email to a friend | print
NORTH CARROLLTON -- For the second time in as many months, the Carroll County School Board heard from state-selected business manager Bo Surrell on where the district stands financially.

Surrell highlighted the district’s cash flow and the fund balance. With eleven days on the job, Surrell, who was appointed by the Mississippi Department of Education, said the deficit currently plaguing the district can be chipped away gradually.

Surrell informed the board that with his May and June projections, the district will likely have cash flow problem for July and August. He urged the board to transfer money from 16th Section to pay for those months.

At the start of his presentation to the board, Surrell reminded them and an audience of over 30 people that he was appointed by the state after a true deficit of $35,463, described as a booking error by Surrell, was found by an audit of the school district earlier this year.

Surrell said he, along with business manager Mimi Alldread, has worked on a projected budget for the 2014-2015 school year, and if conserved and met, the district could see a drop in the deficit.

The deficit, money borrowed from the 16th Section District Maintenance Fund, is currently $1.4 million, money that Surrell said the district owes itself, but said he sees it dropping in a matter of time.

“We looked at this really hard,” Surrell said. “If the projected budget is met, we can see the reduced deficit of $1.4 million to $811,000. How this happens is being conservative on expenditures and payroll and benefits. Those are significant.”

Surrell said since his arrival, expenditures have been at a minimum.

“There have been very few purchase orders made since I’ve been here, and the superintendent is making only 25 percent of his salary,” Surrell said. “This has saved the district a lot, and we’re hoping like crazy that we can get there.”

In other findings, Surrell said the projected savings at George Middle School looked to be around $170,000 with the departure of three teachers. Surrell said Marshall Elementary is at the minimum number of teachers required, and projects a savings of over $100,000.

Revenue of sources

Surrell showed the board members and audience pie charts of revenue sources to the district. His focal point highlighted both funds from the state’s Mississippi Adequate Education Program (MAEP) and the local school tax levy.

“Both the local and state funds make up 76 percent of your budget,” Surrell said. “When you lose those dollars, it affects your budget.”

Of the local funding, Surrell said 91 percent of it is made up of ad valorem money, and MAEP dollars make up 92 percent of the state funds.

In comparison to 13 other school districts with similar standings, Surrell said the school district was next to last in collections.

“In 2009, the Board of Supervisors did not pass the school levy and the millage rate, affected the school,” Surrell said. “The district received less ad valorem than they did six years ago. Along with MAEP cuts and increases in expenses, that created the perfect storm. Ad valorem taxes are the primary sources of any school district; it doesn’t matter if it’s Carroll County or Gulfport.”

According to Vice President of the Carroll County Board of Supervisors Terry Herbert, the county is required by law to give the school district any amount asked, up to four percent.

“We don’t have a choice, by law we can’t refuse the school,” Herbert said. “We’ve never refused them anything.”

Recommendation

“I’m looking at everything to cut,” Surrell told the board following his presentation.

The longtime Grenada School District business manager and one time Mississippi Business Official of the Year, Surrell told the board as much staff reduction as possible will be required to get back on the right track. One of the areas he suggested was the suspending of the board attorney.

“Now I said suspend, not eliminate,” Surrell said. “Before I came here, this was one of the first times I saw the board attorney give advice in a meeting, and that is something great to have.”

Surrell also recommended that the board request a four percent tax increase from the county until everything is stabilized.

“When you look at the expenses, this district is running a low bus fleet,” Surrell said. “Without unprecedented cut, it’s hard to strive. I’m a taxpayer, and I’m sensitive to paying taxes. I’m also sensitive to the integrity of the finances of the school district. The problem here is that there is no leeway.”

Surrell is required to spend three months in the school district, and at the end of his tenure, he will report to the state board of education about the district.

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