Despite an increase in state and local revenues, a $719 million budget approved last week shows the Mobile County Public School System bringing in just $1 million more than it’s scheduled to spend in the coming year.
Approved by the Mobile County school board last week, the FY 2015 budget shows a beginning fund balance of $165 million, but even after an additional $630 million in revenue, the system in on track to end the year with only $75 million in all five of its designated funds.
According to Chief Financial Officer Dinish Simpson, the general fund is projected to end with $26 million — only 74 percent of the one-month reserve systems are required to work toward by the Alabama State Department of Education (ALSDE).
According to Simpson, that’s down from last year’s ending fund projection, which was still only 80 percent of the $35 million is takes to operate the school system each month.
The biggest expenditure this year is the salaries of the 3,218 teachers, which together with the entire instructional staff will cost a total of $276 million. That does not include support staff or administrators, which create an additional $55 million in salary cost.
Still, some groups in the system were denied requests for salary and staffing increases, and according to the 2015 budget, the projected salary cost for non-teaching employees is down $1.4 million compared to a year ago.
During the public hearings that preceded the budget’s approval, a painter told the board his department, which maintains routine painting at the system’s 89 schools, would only have six employees by the end of the year.
AEA Representative Jessie McDaniel also addressed the board on behalf of a group of administrative secretaries requesting new salary ranges for their positions.
“It was alarming to me that at the board retreat last month, very few recommendations were being seriously considered,” McDaniel said. “I assure you, you’ll continue to hear about these categories because these folks are not being paid what they deserve.”
Though the costs for employee benefits will actually increase to the tune of $4.2 million this year, that’s mostly due to a rise in heath insurance costs.
By this year’s numbers, the system gets about half of its funding ($313 million) from state revenues, 26 percent from local property and sales taxes and the rest from the federal government and various “other sources” including income generated from the land the system owns in Mobile County.
Tommy Sheffield, the executive facilities manager for MCPSS, said the school system is one of the top-five landowners in the county. He said, estimating roughly, the property value for the system’s land is more than $100 million.
“We have 22,000 acres of property. Of that, 18,000 is timber,” Sheffield said. “We cut and replant 5 percent of that timber each year. With good forestry management, that revenue will be sustainable life long.”
According to Sheffield, timber sales bring in around $3 million a year, and the total timber value is $20 million, if estimated conservatively. He also said the system leases surplus property for oil and gas production, agriculture and other commercial uses — which is much more lucrative than selling the property.
The board owns and manages several “16th section of lands” throughout Mobile County, which were given by the federal government to Alabama when it became a state. The State Legislature then gave control of the land in Mobile to the public school system and the University of South Alabama in 1969 and 1973, respectively.
The proceeds from the sale of those “16th Section lands” are required to go back to the state, though the school systems do receive the interest from the sale.
“Most school districts have sold their surplus property, but Mobile County has been very smart by holding on to theirs and keeping 100 percent of that revenue,” Sheffield said. “We manage it and draw revenue, and we’re making millions by being good stewards of land.”
Facilities old and new
According to a recent press release, the system has spent more than $800 million over the past 10 years in what has been the largest building campaign in MCPSS history.
A $200-million bond program is also helping fund multiple on-going projects including the construction of three news schools and millions of dollars in renovations at several other facilities.
The most expensive of those projects will be the construction of a new $25-million Citronelle High School, which should be completed by 2016. The system is also planning to develop a school and community athletic fields adjacent to Lott Middle School with help from the city of Citronelle.
However, some of the system’s vacant properties could be sold off in the coming weeks.
The board held a facilities meeting last week to discuss several purchase offers recently received.
Properties that might be sold included the Old Shell Road School, the Russell Building on Broad Street, the old Augusta Evans School on Florida Street and the “Creighton Property” — a vacant lot on Springhill Avenue.
John Vallas, a real estate developer working with MCPSS, informed the board last week that an offer on the Augusta Evans property had been received from a retail developer. The offer was for the property’s appraised value, with a minimum price of $1.5 million.
Augusta Evans relocated its staff and students to a new facility on Biloxi Avenue this summer, but seventh and eighth graders in the system’s Star Academy and Alternative School programs have already begun using the old facility.
“We would want to work as much time into the contact as we could to stay through the school year because we wouldn’t want to disrupt those available facilities,” Superintendent Martha Peek said. “It’s better to move forward rather than continue to lose value on the property.”
The board discussed several possible options for the “Creighton Property,” which Sheffield said was at one point strongly considered to be the location for a midtown fire station.
“Former Mayor (Sam Jones) and the past administration approached us because they were trying to close the Western Drive Fire Station on Moffett (Road) and wanted to bring it to the Springhill side to have interstate access,” Sheffield said. “The new administration said the city doesn’t have the funds right now, but if we could get a private developer to buy the property, build the station and then lease it back to the city, we could possibly have a fire station there.”
According to Vallas, multiple offers have been made on the property since those discussions from dollar stores, automotive sales and repair stores and tax credit apartment developers.
Vallas did discuss one $450,000 offer for the 4½-acre property, and said the system was in the process of getting an updated appraisal on the property since it’s been cleared.
Board President Reginald Crenshaw said they would wait for the results of the appraisal and take these matters up at the board’s next work session.