Inflation pressures Raleigh County schools' reserves

May 25—The same rising costs in utilities, fuel and food experienced by households across the country have caused Raleigh County Schools to dip into its reserve funds to balance its budget for the coming fiscal year.

Darrin Butcher, treasurer and CSBO (Chief School Business Official) for Raleigh County Schools, said the district's 2023-24 fiscal year budget includes an allocation of $3.9 million from its reserve funds to offset anticipated inflationary costs.

While this is a problem Raleigh Schools can absorb for the coming fiscal year, Butcher said this is not a sustainable solution for the county.

"When we're trying to balance a budget, and we have to use reserves to balance our budget, we have to be cognizant that, that number doesn't get too big," Butcher said in an interview with The Register-Herald on Wednesday.

"For us next year, it's $3.9 million. That is a reason for concern, but in the short term, we can deal with that. But in the long term, we would need to make cuts, either in staffing or costs or whatever to keep that number kind of consistent."

The budget for Raleigh County Schools 2023-24 fiscal year (FY), which runs July 1, 2023 to June 30, 2024, was approved Tuesday during a regular school board meeting.

The total budget for FY 23-24 is projected at $208.3 million, with more than $97 million in revenue from the state, about $48.6 million from local tax dollars and about $33 million in federal funding.

Raleigh Schools spends the most funds on instructions services which cost about $72.7 million and accounts for 34.94 percent of the district's expenditures.

Other line items receiving a significant percentage of funding includes building improvements — $27.65 million, special education — $17 million, operations and maintenance of plant — $16.62 million and student transportation — $14 million.

Raleigh County Board of Education member Richard Snuffer said Raleigh Schools is in a better position financially than most county school districts, but that may not always be the case if costs continue to trend upwards.

"We can weather those for a while," Snuffer said. "We keep at least a 10 percent or more reserves — we've had up to a 20 percent reserve for times just like this. . . But if things continue, then that would be a concern of ours. We just have to address it as it comes."

Nearly every expenditure in Raleigh County School's budget is expected to increase from the previous fiscal year.

For its child nutrition program, $8.269 million has been allocated which is $496,000 more than the 2022-23 fiscal year which runs runs July 1, 2022 to June 30, 2023.

The budget for student transportation is increasing by nearly a million dollars for the coming fiscal year.

Butcher said the figures for FY 22-23 are still just an estimate and the actual numbers will not be fully realized until after the fiscal year ends on June 30.

While rising costs are still a major concern, an influx of federal funds brought on by the Covid pandemic is allowing Raleigh Schools to take on more school building projects at one time than normally would be possible.

From the nearly completed construction of the new Stratton Elementary School to construction at Park Middle School that will soon begin for a new gym, Butcher said the district is taking on more projects at once than he's seen in the 14 year's he's worked there.

Just to name a few, Butcher said projects are going on at Woodrow Wilson High School including new widows, lab renovations and upgrades to the stadium.

Playground upgrades are taking place at several elementary schools from Shady Spring to the new Stratton. The playground at Stratton will cost roughly $832,000.

New gyms are being constructed at Park Middle School and Shady Spring Elementary School. Shady Spring Elementary is also getting an update to its kitchen and front entrance.

The Academy of Careers and Technology (ACT) is having new windows installed and HVAC upgrades are taking place in gyms at Mabscott Elementary, Independence Middle and Shady Spring Middle.

Bradley, Cranberry-Prosperity and Hollywood Elementary Schools along with Independence Middle are also having roofing work done.

"Most of those major renovation projects at Shady Elementary, Woodrow and ACT and the HVAC projects, are using a combination of ESSERF and county funds," Bitcher said.

He added the county is taking on more projects that it normally would because the ESSERF (Elementary and Secondary School Emergency Relief Funds) must be "fully encumbered" by September 2024.

"That's why you're seeing a lot of construction projects that are going on right now in the county," Butcher said. "Typically, we don't try to undertake this many projects, but we also want to be wise with our dollars and get those spent before our grant timing runs out."

Butcher said Raleigh was given about $51.2 million in ESSERF which was part of a stimulus package passed by Congress during the pandemic.

He said those funds also went to "addressing learning loss" such as after school programs and to hire additional staff. It was also used for school-based health programs and to purchase technology devices for students and teachers.

Raleigh County Board of Education President Larry Ford said being able to afford so many school building projects is a luxury they are not taking for granted.

"It's wonderful that we're able to continue to improve all of our buildings with whatever resources that we can get," Ford said. "We try to spend the money wisely. . . I can remember back even before I was on the board, there have been times when the budgets were so tight that buildings would be leaking. The resources just weren't there, but we're in a very, very good financial shape right now."

Raleigh County Board of Education member Jack "Gordie" Roop said the county is blessed that it can afford to upgrade so many of its school right now but added that it's likely they'll have to "tighten our belts" in the near future, especially when time is up on ESSERF.

Future funding concerns will also depend on student enrollment which has been on the decline in Raleigh County and West Virginia.

Snuffer said student enrollment in Raleigh County seems to have leveled for the time being.

"Our student enrollment basically has leveled, I think it maybe even increased by a few students," Snuffer said. "But we're worried about that in the future because the Legislature's kind of incentivize people to put their kids in private schools or other things through the Hope Scholarship."

He added that fewer students means less funding from the state.

Another area of concern for the FY 23-24 budget relates to state funding for PEIA.

Butcher said a supplemental appropriation from the state for PEIA premiums has yet to be allocated by the Legislature.

"If that doesn't go through, then the amount of funds that will be necessary for us to balance our budget increases from $3.9 million to $6.7 million," he said. "So it's a pretty big deal for county boards to get the supplemental appropriation."

The Register-Herald reached out to representatives with the Legislature for clarification on the PEIA supplemental appropriation and was informed by Jacque Bland, director of communications for the West Virginia Senate, that, "For PEIA, the funding to cover the additional cost to the county boards of education is already in place, but will require the Legislature to come in to provide a reallocation of spending authorization to PEIA. The Legislature has been in communication with the governor's office about this issue, and we look forward to addressing it the next time the governor calls the Legislature into an extraordinary session."