The Franklin County Board of Education will consider approval of a $1.2 million line of credit at its July meeting in order to meet a financial shortfall for the remainder of the fiscal year.
Franklin County Schools Superintendent Greg Hamilton said he has spoken with officials at CB&S Bank about establishing the line of credit. Hamilton told the board Tuesday the action was necessary to carry the system through September 30, 2017, the end of the fiscal year.
“We need this to get through the year. We'll have a better revenue stream next year due to the increase in student population,” Hamilton said. “We've made major cuts and transfers across the county to save us money next year. We'll definitely be in better shape next year but at the moment we're not.”
Alabama law requires public school systems to have a reserve fund equal to one month of expenses, $2.2 million in the case of Franklin County Schools. The system does not have any reserve on-hand. Superintendents of systems without the reserve must attend an annual meeting, Hamilton said, with state officials to outline their plan to build a reserve. Hamilton attended such a meeting in February, one month after he took office.
“My goal this fiscal year is to pay the bills and get everyone a check. I know our finances will be better next year with the cuts and the increased student enrollment,” Hamilton said.
The system increased its enrollment by more than 200 students after Russellville City Schools imposed a $600 annual tuition for students living outside the Russellville city limits. Most of those new students enrolled at Tharptown and Belgreen Schools. State funding is based on the enrollment of the previous school year, so the system was not funded last year for those new students.
The Franklin County Board of Education approved a resolution Tuesday to develop a plan to establish and maintain a minimum general fund balance equal to one month's operating expenses.
“Our resolution is to get there through cuts, transfers in funded positions, our incentive plan and to pick up more revenue in the upcoming year through the extra number of students,” Hamilton said.
