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Officials say board knew of levy limits

CHARLESTON, W.Va. -- Kanawha County school board members knew of the possible budget repercussions when they supported a flat revenue cap on an excess levy last year, Superintendent Ron Duerring said.

"We had discussions and meetings and talked one-on-one. We knew the capped excess levy was causing issues with no additional revenues coming in. So we stated that up front," Duerring said Tuesday in a phone interview.

Some board members seemed shocked at the financial status of the school system as presented by Duerring at a recent board meeting.

Duerring worked with county treasurer Harry Reustle to create a report showing a $4.5 million deficit as of the first day the new excess levy takes affect.  

During a January 2012 meeting, the board voted 4-0 to give voters the chance to approve a five-year cap on the amount of money the school system could receive through a property tax in addition to its regular levy.  

Kanawha County voters must periodically approve the excess levy.

In May, voters approved the capped levy amount - a flat $44.2 million annually from fiscal year 2014-19 — by nearly 66 percent.

The current excess levy as well as previous levies have been "capped" but not in the same way. The revenue generated has been allowed to rise over the five-year term until it hit a specified level.   

Although board member Becky Jordon wasn't at the meeting when the board voted to support the flat cap, she told the Daily Mail Monday that the majority of the board regrets that vote.

Board member Jim Crawford said that if he had known of the $4.5 million projected deficit last January, he would have favored a higher levy cap.

Reustle said he couldn't remember what he discussed at that meeting but it's typical to talk about projections during levy discussions. But such projections tend to be focused on the money coming in from the levy, not general county costs, he said.

"The emphasis is on the revenue side of the coin," Reustle said. "So when (projections) come up at the excess levy discussions, there are projections for the next five years . . . There's not much focus on the expenditures side."

Reustle worked with Duerring in late June to compile the report that included the data presented this fall but said he couldn't remember what numbers were presented at the January meeting last year.

Reustle meets with Duerring every month to discuss the financial well-being of the school system. Additionally, Reustle plugs the last month's data into a formula that projects total revenues and expenditures by the end of the budget year. That information is then taken to the board.

He has done this monthly for years and is confident such information was presented to the board.

After nearly two decades as school system treasurer, Reustle said nothing surprises him as far as budget projections go. There are always forecasts showing what would happen if the school system did nothing to change its finances, and as such they're always changing, he said.

"In response, the board and superintendent start taking action to try and minimize that deficit forecast," Reustle said. "They don't sit still with that type of thing."

Jordon recently asked Duerring to call a special meeting to discuss budgeting. She told the Daily Mail Monday she supports an additional levy and believes the majority of the board does as well.

Board President Pete Thaw does not. He has fought for the flat cap on the levy for the 14 years he's been on the board and thinks there's a push from the state level to remove the cap.

On Monday, he told the Daily Mail the board supported the cap last January and questioned the motives for the current shift in thinking.   

"A year ago, the board and the administration discussed what levy to present to the people. Everyone took part in that discussion. What came out of it is what was presented to the people in May of '12," Thaw said Monday, adding that the levy passed easily.

"Now what's changed? Have the figures changed, or has the political climate changed?" he continued.

Duerring said it's tough to look too far ahead but said he cautioned board members last January that there could be trouble. The flat-cap levy starts in 2014 and runs for five years, meaning the board is setting policy for seven years; Duerring pointed this out to board members last January, the Daily Mail reported at the time.  

Federal funding is always tough to anticipate, Duerring said. Recent cuts in federal spending — Medicaid reimbursement, for example — and uncertainty surrounding other programs like Title I lead to the sobering predictions, Duerring said.

He thought the board might have relied on federal funding streams when making its decision to put a flat levy before voters.  

Thaw is confident the county can trim its budget. Duerring said 85-87 percent of the budget is for fixed costs like salaries and benefits so cutting will be tough.

He'll present some of his suggestions for cuts or budget changes during the special meeting Jordon requested. The meeting is set for 6 p.m. Feb. 11 at the board offices on Elizabeth Street.

Contact writer Dave Boucher at 304-348-4843 or david.boucher@dailymail.com. Follow him at www.twitter.com/Dave_Boucher1.


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