By Brady Petree and Kyle Hamrick
When you elect to create your own school system and it happens in a whirlwind 12 weeks, challenges are going to appear once the wheels start turning.
For the Orange Beach City School System, the wheels have started turning on its first year as an independent school system. And now, they may face a unique challenge in what could be the first of its kind in the state of Alabama.
With the first month of classes in the books as its own school system, Orange Beach now must deal with an issue centered around the 10-mill match with the Alabama Foundation Program in which the school system could be in deficit by as much as $7 million.
John Wilson, the director and chief school financial officer for the Baldwin County Public School System, said the Orange Beach City School System could have a unique problem on its hands when he first read Baldwin County’s fiscal year 2023 budget in Loxley on Aug. 30.
Wilson explained Orange Beach would receive a 10-mill match of roughly $11.7 million for its 1,000 students. He noted the city’s property valuation per mill is the highest in Alabama, surpassing Gulf Shores and Mountain Brook because of its concentration of high-value condominiums. Estimating the system would receive at least $5 million in state funding, Wilson said Orange Beach would nevertheless find its system at a deficit of roughly $6 million or $7 million.
“That’s a very interesting question and it’s a situation that’s never occurred in any school system in Alabama,” he said. “I’ll be watching it just because I’m a nerd and I’m curious how they’re going to handle this, but they need to handle it because it’s not going to get any better. That division is going to continue to get wider and wider from what their property values are based on their student enrollment, because they’re kind of landlocked and it’s kind of expensive to raise a family down there. There are going to be challenges.”
To determine how much each school district will receive, the state takes into account the average daily enrollment among other things to calculate the amount of money going to each system.
Property values play a critical role in determining how much state funding a school system receives. The reason Orange Beach could be in such challenging financial straits is because the state’s deduction for its property value is more than the money it would receive in state funding.
A mill averages out to around $1 in property tax for every $1,000 of assessed value. For school systems to receive the funds from the Alabama Foundation Program Fund, the local match must be subtracted from the Foundation Program.
With questions arising about the funding issue and whether or not this was recognized before making the move, officials in Orange Beach remain tight-lipped, providing little insight as to what will happen with the situation or how it will be resolved.
In fact, Orange Beach Mayor Tony Kennon, who has been one of the biggest proponents of the city having its own school system, said the issue is “unique” and it has not been a top priority up until now; the majority of the focus has been on opening the schools.
“There’s really nothing to say. We are just a unique situation that we are working with the school board on,” Kennon said. “We’ve been so focused on getting these schools open and dealing with the necessary things that matter right now, this just hasn’t been big on our radar right now.”
Orange Beach Superintendent Randy Wilkes alluded to the fact there is an issue regarding funding, but claims nothing is concrete.
“We are just beginning those discussions and there are no definitives as of yet,” Wilkes told Lagniappe. “We are currently working with the State Department of Education regarding funding.”
However, Orange Beach, unlike most other cities, could potentially rely on its lodging tax to shore up the millage issue. In April, just three weeks after the vote to break away from the Baldwin County Public School System, the Orange Beach City Council approved a 3 percent lodging tax hike from 7 percent to 10 percent. The hike is projected to generate between $10 million and $12 million for the school system.
Regardless of the millage issue hanging overhead without a solution at the moment, the Orange Beach Board of Education is pressing forward.
On Sept. 8, the board approved its first five-year plan, a requirement for the State Department of Education. Due Oct. 1, it must outline every fiscal year dating to the 2026 fiscal year.
Wilkes said traffic patterns, population increase, and available housing were additional factors used in determining student needs.
“The plan is very fluid. Safety and academics are our first priority,” Wilkes said. “What the plan does not demonstrate was my study of current facilities and a 10-year student growth projection.”
The plan calls for multiple large-scale projects for the school campuses.
Projects included in the plan are a new cafetorium and library ($5 million), a two-story field house with a covered practice area and synthetic turf ($12.11 million), and a new middle and high school varsity competition gym ($7.6 million). Also in the plans are the construction of a new building for the central office ($750,000), as well as concession and restroom buildings, stadium seating, a press box and a track and turf field “required to host 4A playoffs,” according to the plan. The additions to the field will cost around $3.7 million.
As for Baldwin County’s side of things since the split, the school system seemingly hasn’t skipped a beat despite losing two school systems in four years.
After two public readings in Loxley on Aug. 30 and Sept. 13, the Baldwin County Board of Education unanimously approved the budget for fiscal year 2023 at their meeting Sept. 15.
“To the best of our ability, I do think we have a very healthy general fund balance,” Wilson told the board at the second reading. “I think we have well above a two-month reserve balance. We’re going into this in a very, very healthy financial situation, and if we run into a financial crisis, then there are probably dozens or hundreds of other entities that have already collapsed before we get to that point. That is part of having a very conservative budget.”
Revenues are up by roughly $14.2 million from 2022’s budget, with 43.4 percent coming from local sources like the general fund’s tax revenue, 41.6 percent coming from the state and 15 percent coming from the federal government for a total of more than $513 million. Baldwin County’s systemwide enrollment sits at 31,363 students and is projected to increase despite losing roughly 1,000 students from Orange Beach and 2,000 students from Gulf Shores.
“You can see even when we looked at this past year versus where our ADM [Average Daily Membership calculated from the 20 days after Labor Day of the year before] is going to be for this school year, backing out 1,030 students from Orange Beach, we still show a growth,” Wilson explained at the first reading.
Expenditures are down by roughly $1.57 million to almost $559 million, with 58.2 percent or $323 million going toward employee salaries and fringe benefits alone, capital projects worth 18.3 percent, materials and supplies worth 10.7 percent, purchased services taking 7.5 percent and debt accounting for only 5.3 percent. The system employs more than 4,000 people, including teachers, nurses and custodians.
Baldwin County is slated to spend more than $23 million more on instructional services and instructional support services than it did in 2022, at a cost of more than $240 million and $70.6 million respectively.
“We basically either increased the number of teachers or left them alone based on the 2019 valuations,” Wilson explained. Teachers joining Baldwin County after completing their master’s degrees are starting their careers making more than $53,000 per year.
The general fund’s balance, however, is expected to increase by the end of September 2023, from almost $72 million to $81.6 million.
“The $20 million increase in our foundation funding is due to really the salary changes and the massive drop in our 10 mill match,” Wilson said, noting the match dropped from $42.7 million in 2022 to $34.7 million because of the Orange Beach split.
The settlement the county received from the new school system came out to roughly $36 million, and plans for spending the money across the county have not been finalized yet.
The price is right?
If the phrase, “you get what you pay for” holds to be true, the Orange Beach City School System should rank near the top of the charts when testing results come in after their first full year separated from the Baldwin County Public School System.
After the dust settled when the Orange Beach City Council voted to approve the separation agreement for the schools to become their own district, the next order of business regarding the school system was to find a superintendent to lead it. After consideration of over 20 candidates for the position, Randy Wilkes was selected as the superintendent after serving in the same position for the Phenix City school district.
When hired, Wilkes was given a hefty base salary of $260,000 — good for the second-highest in the state, just ahead of Alabaster City Superintendent Wayne Vickers, who was named superintendent of the newly formed Alabaster City School System in 2013.
As enrollment numbers currently stand, Wilkes has 1,253 students enrolled in his district. Averaged out, he makes $207.50 per student enrolled at Orange Beach Elementary, Middle and High schools.
According to documents from the Alabama State Department of Education (ALSDE) for the fiscal year of 2022, Mobile County Superintendent Chresal Threadgill is the state’s highest-paid superintendent with a salary of $271,320. Baldwin County Superintendent Eddie Tyler received a salary of $247,350.
Mobile has over 53,000 students across 90 schools enrolled; Threadgill makes an average of $5.11 per student. Meanwhile, Baldwin County comes in at around 30,000 students enrolled, which equates to $7.20 per student for Tyler.
Just down the road, Gulf Shores Superintendent Matt Akin’s salary totals $207,000. There, average daily attendance sits at just over 2,200 students.
According to the latest information from ALSDE, State Superintendent Eric Mackey received a salary of $268,797 as of 2020.
With Wilkes making slightly below the state superintendent’s salary, it begs the question: Why such a large salary for a superintendent in a district that has just over 1,200 students?
To hear Kennon put it, the city was willing to pay whatever it took to get what they view as the right person for the job of leading the new school system — even if it means paying a premium price tag before knowing what the results he or she will produce will be.
“You pay a man or woman what they are worth,” Kennon said. “And Mr. Wilkes has an exemplary record and has had success everywhere he has been. If you look at his salary compared to the best in the state, that’s about where the number is.”
Statewide, superintendent salaries have skyrocketed in recent years.
A memo published by ALSDE for the 2022 fiscal year shows there are 18 superintendents in Alabama making over $200,000 per year with five of those being in a city school system.
When added together, the salary of the superintendents across Alabama’s 67 counties comes out to around $9.3 million for an average salary of $139,814. If the salaries for those superintendents making over $200,000 per year are added together, the resulting amount is roughly $1.17 million, which takes up almost 12.5 percent of the state’s total allotment for superintendents.
Officials with the Orange Beach Board of Education did not return a request for comment regarding Wilkes’ salary as of the publication date.
Off to a rocky start
While the powers that be obviously had hoped for a seamless transition without making headlines for the wrong reasons, the first month of the school year under Orange Beach’s own supervision has only had a couple of bumps.
Just one week into the school year, a back-to-school assembly regarding a multitude of things ranging from drug testing to other school policies took a turn when the conversation shifted to the dress code. In the meeting, as previously reported by Lagniappe, girls were essentially told they needed to adhere to the dress code more strictly than the boys since boys “could not control their urges.” Wilkes soon thereafter issued an apology for the comments made by the employee.
Then, just last week, school board President Robert Stuart landed in hot water after he called the board of education “his house” in a heated comment directed toward a parent attempting to address the board regarding the aforementioned dress code for girls.
“You know the ground rules. No, listen to me. You listen to me. You are in my house, alright,” Stuart said.
But despite the concerns and controversies early in its existence, Kennon is still of the belief the school system has done everything the city had hoped and envisioned through its first month.
“Our city school system has exceeded all of our expectations in every way,” Kennon said. “It was exactly what we needed, which was to be independent. Because we all believe that leadership and education should be managed locally.”
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