The Monticello Independent Board of Education has voted to proceed with a hearing before the Kentucky Board of Education (KBE) regarding the district’s designation as state managed. The decision was made during the regular meeting of the board last Thursday, January 17.
The emotional four-hour meeting was held in the MHS Gymnasium, as hundreds of Monticello School faculty, students, parents and concerned citizens were in attendance, waiting for the opportunity to ask questions and voice their concerns about the school’s current situation.
Members of the local school board voted last month to formally request that the Monticello School District become state managed. Preliminary discussion about a possible merger of the Monticello School District with the Wayne County School District was also held during the December meeting.
During last week’s meeting, board members were to consider a waiver to the KBE hearing for designation as state managed. However, board chairman Jerry Lair noted that he has been advised that it would be best to not waive their right to a hearing, but to proceed forward with plans to have the hearing. He noted that this would give the local school district the opportunity to put together a plan in hopes of saving Monticello School District.
When the motion to proceed with the hearing was put to a vote, Lair, Shelia Stephenson and newly elected board member Michelle Flynn voted in favor. Bill Denney voted no. Board member Nancy Duncan was not present during that portion of the meeting.
The KBE is scheduled to meet on February 5. However, Gail Binder, a representative with the Kentucky Department of Education (KDE), noted that the hearing to appeal state management will take place during a special convened meeting of the state board.
After Thursday’s meeting was called to order, Binder and Kay Kennedy, another representative with the KDE, gave a report and powerpoint presentation highlighting the significant factors that have contributed to the school’s financial woes. The financial problems plaguing the district are at the heart of its current
According to Binder, cash flow has been a major problem for the school district, as there is not enough money to cover expenditures
Binder stated that when the school district ended the fiscal year on
June 30, 2012, the general fund balance reflected a deficit of
$351,000. She noted that all of the district’s funds are commingled
into a single bank account. Of those individual funds, two are
restricted and can only be used for specific purposes. Binder pointed
out that it was the money from these two restricted funds, capital
outlay and building funds, which kept the checks that the district
had been issuing from bouncing.
In addition, Binder stated that the district had $1,000,000 in the
general fund two years ago. At the end of the 2011 school year, that
amount had dropped to $600,000. At the end of the 2012 fiscal year,
the Monticello School District was $350,000 in the red. She then
discussed the factors that contributed to the district’s fund balance
dropping from $1,000,000 two years ago to a $350,000 deficit at the
end of the last school year.
According to Binder, the soccer field purchase is a significant
factor in the decrease in the general fund balance. She noted that
the soccer field on Hwy. 90 was purchased without approval from the
State Department of Education. Since no approval for the soccer field
purchase was sought or given, it had to be paid for with money from
the general fund because the district was not permitted to use money
from the building fund for it.
In order to finance the purchase, a note had to be taken out at the bank. Binder explained that a CD in excess of $300,000 had to be purchased. The difference between the amount of interest paid on the CD and the amount earned from the note is 2.5 percent, noted Binder. She added that approximately $7500 in interest per year had to be taken out of the general fund on that note.
Another contributing factor to the general fund deficit was baseball field improvements that totaled an estimated $500,000, Binder stated.
Staffing at Monticello School is another major factor in the financial dilemma facing the school. She mentioned a reduction in SFS funds from the state and noted when a school district does not cut staff commiserate with reduction of funds, that drains the district’s funds. As a result, the district is paying out more on staff than it has in revenue.
Binder also noted that declining state revenue is a contributing factor to the district’s situation. She pointed out districts not experiencing growth are getting a cut in SEEK funding. Since Monticello School has experienced a decline in enrollment, that has resulted in less SEEK funding coming into the district.
In addition, Binder noted that the CRE audit of the Food Service Department reflected a loss in revenue there as well. She added that the Food Service Department ended the 2012 school year with $17,000 in unpaid lunches on the books. Since then, there has been another $2400 in unpaid lunches added to that total.
In her presentation, Binder also discussed the federal withholding tax deposit. She noted that the federal withholding taxes were not deposited in a timely manner which resulted in the district having to pay a $6000 penalty.
She also discussed the transportation expense versus the reimbursement as another contributing factor. According to Binder, the cost of transportation has doubled the amount of reimbursement. She added that there are approximately 300 children who live outside the district lines, and the district does not get reimbursed for the cost of transporting those students.
Binder also discussed the working budget status. She noted that the working budget was not passed by the state because the expense codes for the salaries and benefits were almost entirely at zero. The working budget could not be balanced because of the lack of funds, she added. According to Binder, the revenue in the working budget is
considerably less than the expenses, by approximately $1.7 million.
She also stated that personnel expenses accounted for the majority of the budget. She remarked that the cost of salaries and benefits
should be no more than 75 percent of a district’s budget. However,
the cost of salaries and benefits account for 92.9 percent of the
Monticello School District’s budget.
This approximate 93 percent combined with the two percent contingency, which the school is required by law to have, accounts for 95 percent of the budget. That leaves the remaining five percent to cover operating expenses, such as fleet expense, insurance,
maintenance, special education, utilities and technology.
Binder noted that the district is also looking at an additional $468,000 loss of revenue next year due to the decline in enrollment. She stated that state funding is based on the prior year’s average daily attendance. Monticello School District’s enrollment has dropped by almost 90 students this year. The cut in funding as a result of
this decline in enrollment will not actually hit the district until
She also stated that since school employees do not receive a check in July, there will be double payroll in June that will cost the
district approximately $800,000.
After discussing the significant contributing factors in the
district’s financial problems, Binder then proceeded to discuss the bottom line for the district.
According to Binder, the combined cash balance as of December 31, 2012 was $455,817.17. She also provided the breakdown for individual fund balances. Those fund balances with negative balances are: general fund, ($51,089.68); special revenue fund, ($117,707.31);
construction fund, ($90,673.83); food service fund, ($53,253.88). The two fund balances that ended with positive balances are: capital outlay fund, $176,013.35; building fund, $592,528.42. Binder said these two restricted funds are the only thing keeping the district’s bank account from being in the red.
Binder also noted that the district has a bond payment in the amount of $178,000 due on February 1. She noted that the district cannot be late with the bond payment and has no choice but to pay it. The effect of this is that there will not be enough money in the fund balance to cover the February payroll. She noted that the KDE has already put procedures in place so the money will be available to cover payroll through June 2013.
Binder then gave a brief overview of what state management would mean for the local school district. She noted that under state management there would be a continuation of all services. Also, a state manager would be appointed in lieu of a superintendent and the
school board would assume an advisory role. She added that if the district is under state management, the state would infuse enough cash into the district to pay the bond payment, as well as cover payroll and other expenses. All paychecks through June 30 would be covered, she pointed out.
In addition, Binder discussed two options for a district to emerge from state management. One option involved the submission and approval of a detailed viable plan to effectively govern itself in a fiscally responsible manner, while serving the needs of all its students. The second option is to merge with the county school district.
Binder stated that a district can be under state management for three years, and can request an additional three year renewal for state managed designation.
She also discussed how a merger of the two school districts would work. She discussed the creation of transition teams, as well as the role of the Commissioner of Education. She noted that the negotiations between the two districts would be a lengthy process, as there would be many items to address, including jobs, transfer of property, transfer of debt and special education needs.
Binder then discussed several ideas she had heard to save the school. At the top of that list was fundraising, and Binder noted that it will take $1.7 million to end this year at a zero balance and break even. She noted that an additional half million dollars would need to be raised every subsequent year to keep the school doors open.
Raising taxes is another idea that Binder has heard. She said that property taxes raise $145,000 net per year for the general fund. Even doubling that amount would not be enough. Binder also noted that if more money is raised through taxes—either property tax or a payroll
tax—then it would result in less money coming in from the state.
Binder also discussed other ideas that have been presented to her.
• reduce staff. Binder said that in order to balance the budget, 30 of the 68 certified staff positions would need to be cut and the district could not meet graduation requirements or serve its students if that happened. She added that if certified staff positions weren’t
cut, it would require that all classified staff positions be cut in order to balance the budget.
• sell soccer field. Binder noted that there were actually two separate tracts of land purchased for the soccer field. She added that there is a gift clause in each of the deeds that would send $21,000 from each back to the district. Binder noted that even if an offer was made on the soccer field immediately, it would not be enough to keep the doors open that much longer.
• annex property. Binder said this could be a lengthy process and both school boards of education would have to agree to release the property. If the two boards did not agree on the matter, it would go to the voters. She stated that there was not enough time to get this done.
• wet vote. Binder said this was also an issue of timing. This would be a lengthy process as well.
Following Binder’s presentation, Kay Kennedy spoke, noting that she was touched and humbled by the number of people who had showed up in support of Monticello School. Kennedy noted that from the perspective of the state department, “we are here to help Monticello in the best
way we can.” She later added, “We are in a bad situation here.”
After Kennedy’s comments, those in the crowd were given the opportunity to ask their questions to the KDE representatives.
Clifton New, a 1997 graduate of MHS, asked Kennedy and Binder what would happen on June 30 if no decision on a merger had been made. Kennedy stated that the answer to that would be state management. She added that the district has prepared a plan that will allow it to function with a state manager. The district can operate under state
management for a period of up to three years. She noted that once state management occurs, the state manager has decision-making authority with the board acting in an advisory capacity. Rachel Davis asked what the merger would do for special needs children. Kennedy informed her that there are rules in place about how children with special needs are to be treated. She added that students with special needs must be addressed in a timely manner and served in a way that best fits their needs.
Marty Dean asked if the district would have to come up with the $1.7 million every year in order to stay open. Kennedy answered yes. She then added that if staff was cut they would not have to come up with as much money every year but that would result in cutting services to students.
Dean then asked how previous audits did not show that this situation
was coming. According to Binder, there was a finding in the audit for
the year ending June 2012 that indicated there was a problem. Lucille
Stinson also had a question about the audit. Kennedy stated that the
audit discussed in November was the first audit that came out that
showed a deficit. She added that in prior years there was a declining
balance, but that was not unusual given the current economic climate.
Kennedy said that while there has been a decline in the fund balance,
this year it showed a deficit.
Cherie Dick wanted to know the difference between a merger and
consolidation. Binder explained that a consolidation refers to
schools within the same school district being combined. She noted
that the term “consolidation” does not apply in this case. She said
that the term “merger” is the proper term to use if Monticello
becomes part of Wayne County. Dick also mentioned the possibility of
any illegal activities that may have contributed to this situation,
and asked if the state would be able to come in and help get the
district back on track. Kennedy noted that typically any illegal
activities would be handled by the local law enforcement. She stated
that they had met earlier that day with the county attorney and law
enforcement officials and pledged their support to assist them in any
investigation they pursue.
One issue that came up during the question and answer portion of the
meeting was the transition teams that would need to be created as one
of the first steps to a merger of the two schools. According to
Kennedy, the transition teams would possibly include the
superintendents, as well as board chairs and board members. She later
noted that there could be other possible transition team members,
such as the food service and transportation directors. Kennedy stated
that there was not a specific number of people that would be on the
transition teams. She remarked that this would be a negotiating
process and if the boards cannot agree, the terms of the merger would
be decided by the Commissioner of Education, who is backed by the
State Department of Education.
MHS student Autumn Bell asked if the soccer field property had not
been purchased, would the district still be where it was at today.
Binder answered that the money spent on the property would have been
used to pay salaries. She added that if money had not been spent on
improving the baseball field, that money would have remained in the
bank but the school would have went through those reserves.
When Bell asked about the possibility of Monticello Independent
being a satellite school, Kennedy replied that would depend on how
the terms of the merger were worked out and that those things
remained to be determined.
Following the Q and A session, those in attendance at the meeting
were then given the opportunity to share their comments with the KDE
representatives. First up during the public comments portion of the
meeting were three faculty members representing the elementary,
middle and high schools. Nancy Sawyer, Marsha Bertram and Teresa
Rankin shared their comments as faculty and staff joined hands and
made a circle around them.
Following the public comments portion of the meeting, the board took
a break before addressing several other items on the agenda. During
the business portion of their meeting, the board heard a treasurer’s
report from Bill Boyd. He noted that the working budget had not been
accepted by the state and will be submitted again. Boyd also noted
that it reflects a deficit for the year.
Boyd also presented a draft budget for the 2013-14 school year. He
noted that it showed an estimated expense for the general fund of $7
million and estimated revenue of $3.1 million, which leaves a
substantial difference the school district would need to make up.
At the end of the meeting, board member Bill Denney asked Winter
Huff, newly appointed board attorney, to look into the legalities of
possibly annexing everyone in the city into the Monticello School
District. He also asked her to check into whether or not it would be
possible to invoke the bond of the former finance officer.
In other action, the board:
• elected Jerry Lair as board chairperson and Shelia Stephenson as
board vice chairperson.
• appointed interim superintendent John Hurt as the board secretary.
• appointed Bill Boyd to serve as board treasurer.
• approved the interim superintendent’s contract for January and
• approved second reading of board policy 3.1321.
• created new position of Payroll Clerk 1.
• approved new Bond of Depository with First Southern National Bank.
The staff at Monticello School shared the following statement during
the school board meeting.
Nancy Sawyer spoke on behalf of Monticello Elementary faculty.
It is with sad hearts that we voice these comments because we never
thought the day would come that we would have to explain to our
students that Monticello School may no longer exist. We are very
devastated and understand the pain, anguish, and confusion of our
students, parents, and community. We were given no warning that our
school was facing these dire consequences until it was announced at
the December 17 board meeting. Please understand that the current
Monticello faculty and staff did not have a role in the decisions
that put our school in this situation. We have had our students’ best
interest at heart at all times.
The elementary staff is very proud of our students’ accomplishments,
and we consider it a privilege to be teachers at Monticello
Elementary School. State test scores reflect the significant gains
that have been made in all academic areas. Our teachers eagerly seek
professional development to increase their effectiveness in the
classroom. The family atmosphere at Monticello School is rich with
cultural diversity, as our students come to us from various ethnic
and economic backgrounds. It has always been our goal and pleasure to
respectfully embrace each student individually, along with their
diversity, to enhance the learning environment we provide for them.
We also love our unique ability to watch, encourage, and support our
students as they progress from preschool through 12th grade.
Marsha Bertram spoke on behalf of Monticello Middle School.
The “family” atmosphere also runs very strong at Monticello Middle
School. We pride ourselves on knowing our students individually and
meeting not only their educational needs, but their social and
emotional needs as well. In spite of many challenges beyond our
control, our school has made significant gains in all academic areas.
Our hope for the future is to continue to promote college and career
readiness for our student body.
Teresa Rankin spoke on behalf of Monticello High School.
Monticello High School is proud to have produced countless,
hardworking, productive, and involved members of our community,
state, and nation. These individuals feel a lifelong connection to
our school, their teachers, and their classmates. Monticello School
is part of their identity. During the last academic year, Monticello
High School moved from the fifth percentile to the 32nd percentile.
In addition, out of 41 priority schools Monticello High School ranked
11th. Our academic gains were made without any financial or academic
assistance from Kentucky Department of Education. In fact, without
financial or academic assistance Monticello High School has
outperformed most of the schools that have been in the priority
school system who have received upwards of one and one-half million
dollars over a period of three years.
If we could magically make this catastrophe go away, we would gladly
continue serving our students at Monticello Independent School.
However, these circumstances are beyond our control. Therefore we,
the staff at Monticello Independent School, will do whatever is
necessary to ensure that our students are provided with the absolute
best education possible. If the merger occurs, we are willing to do
whatever is needed to make the transition smooth for all people
concerned because, as always, our students are first on our hearts
Monticello School has always been a part of my life. I am a proud
1985 graduate of Monticello High School, my mother spent 28 years of
her teaching career here, both of my daughters are or will be alumni,
and I have been a member of the faculty here for the past 20 years.
As such, I feel that I have a pretty clear understanding of the
history and significance of Monticello School as well as the issues
that have brought us to this point. Yet...although it is human nature
to dwell on the events that have brought us to this point, I feel it
is critical to go beyond that and focus on what is truly in the best
interest of our students.
Since it seems to be a foregone conclusion that any decisions about
the future of Monticello School will be made at the state level, my
comments are directed to the KDE members who have been and will be
charged with making these decisions. I was at the board meeting in
December when the initial report and recommendation was made, and it
was clearly communicated to everyone there that it was KDE’s feeling
that there was no alternative other than for Monticello School to
close its doors at the end of the 2012-2013 school year.
Although it was stated at the time that it was a very hard decision
and the only viable solution, I would have to disagree on both
points. As teachers, we are charged with the responsibility to
challenge our students to consider all options and possibilities ...
in other words, to go beyond the superficial, easy answer. In my
opinion, a decision at this point to close Monticello School is not
the hard decision ... it is an easy superficial answer to a much more
difficult question. It is the easy way out ... not necessarily the
best way out.
Therefore, if everything we do is really about the students and
their best interests, we have to ask this question: Is it really in
the best interest of our students to close Monticello School and
merge (or whatever the term ends up being) with the Wayne County
School District? While I have the utmost confidence that they would
be provided the opportunity for a quality education at Wayne County
Schools, I do not believe that it is the only ... nor the best ...
option for our students.
First of all ... as educators, we know that in addition to and in
spite of everything else, the bottom line to successful teaching
comes down to the student/teacher relationship. Anyone who has had
any dealings with Monticello School knows that this has always been
one of our strongest points. I don’t think anyone can make a viable
argument that merging over 800 students into another school district
strictly for the sake of money is going to enhance that already
critical student/teacher relationship or that it is in the best
interest of the students at Monticello School.
Secondly, research has also consistently indicated that one of the
best predictors of student success in later life is participation in
extra-curricular activities. Even though it has been stated that the
students of Monticello School will benefit from having a greater
variety of activities with a merger, the end result will be less
involvement in extra-curricular activities. With two local school
systems, twice as many students have the opportunity to participate
in athletics and extra-curricular academic endeavors. Sending all of
our students to another school system will undoubtedly lead to less
extra-curricular opportunities ... not more.
Finally, one of the strong points of our city and county has always
been the fact that we have two school systems and students have some
choice in their school selection. If a student doesn’t thrive at
Wayne County, perhaps they will thrive at Monticello School ... which
we have often witnessed to be the case. At the same time, if a
student doesn’t thrive in the Monticello School environment, perhaps
they will in Wayne County Schools. The point is ... students have had
more than one choice and one opportunity. As such, it is quite a
stretch to say that removing that choice is in the best interest of
During the past couple of years, with low test scores and student
achievement on the decline, the teachers at Monticello School have
often been made to feel inferior ... second rate. No matter how hard
we tried, no matter how many hours during the evenings and weekends
we donated to the cause, we have been made to feel like it was never
Today, I read the article in the Wall Street Journal that ranked the
richest and poorest schools in America. Do you know where the
Monticello Independent School District ranked ... second poorest in
the nation ... second lowest in the nation! In light of that, when I
consider the gains we have made in the past year ... without ANY of
the financial assistance from the state that was afforded to other
Priority I schools ... I would say that the teachers and staff
members at Monticello School are not second rate ... they are miracle
workers! Yet now, rather than looking at options to provide a stable
foundation for the nation’s second poorest district, the only
solution offered is to close the doors on an institution that has
served students in this area for over 100 years.
So ... at the end of the day, the question we have to ask ourselves
is this: What message do we send to students, parents, and citizens
with the decision to close Monticello School? During the past year,
our students have worked hard to make strong academic gains because
they want to better themselves and show pride in something bigger
than themselves. If, after all that work and all those gains, an
arbitrary decision is made to close the doors solely due to funding
issues, the message we are sending is clear. “It’s not about kids ...
it’s all about money.”
The Monticello Independent Board of Education has voted to proceed with a hearing before the Kentucky Board of Education (KBE) regarding the district’s designation as state managed. The decision was made during the regular meeting of the board last Thursday, January 17.
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