1-23-13 —     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  

situation.

    According to Binder, cash flow has been a major problem for the  school district, as there is not enough money to cover expenditures  

and payroll.

    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  

July 1.

    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.  

Those included:

    • 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  

February.

    • 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.

    

Monticello staff

composes statement

    

    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  

and minds.



Comments from

Paul Stringer

    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  

the students.

    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  

enough.

    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.”