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School board ponders options as SPLOST shrinks

POSTED: November 26, 2009 10:54 a.m.

The Effingham County School System is reprioritizing projects that will be funded through what are known as ESPLOST funds.

The ESPLOST, or educational special purpose local option sales tax, is a penny sales tax that is in addition to the two cents of sales tax on each dollar reserved for the school system.

“We spend the majority of that money on capital improvements,” said Dr. Slade Helmly, Effingham schools’ director of administrative services, “meaning buildings, bricks and mortar-type things, athletic improvements at both high schools. We spend it on textbooks. We spend it on school buses. We spent it on a number of things.”

Helmly said when the current SPLOST began, the school system thought it would be receiving approximately $830,000 a month. At the beginning the system did and more — but over the last year, the $800,000 to $900,000 a month is now around $675,000 a month.

“It’s down 30 to 40 percent from where we were,” he said. “That certainly has an impact on the things that we can do, and the things that we as a school board need to consider.”

The school system has two large construction projects in the new Effingham County Middle School and the career academy. Helmly told the board in May there was still approximately $7.5 million to pay toward ECMS. Now there is around $1.8 million.

The new ECMS has been in use since August, and Helmly explained that the state requires 10 percent of the cost on the construction.

“Ten percent is a little over a million and a half dollars,” he said. “There is still a good bit out there to ensure that those loose ends that haven’t been completed will be completed.”

School system staff installed cabinet work, outdoor lighting and energy management controls. Helmly said $2.5 million was proposed to go toward the school system’s maintenance building and bus shop, and it is now suggested that project be held.

Other projects Helmly has suggested to put on hold include a fieldhouse at South Effingham High School, a fieldhouse and concessions stand at Ebenezer Middle School and the pond closure and paving at South Effingham Elementary.

Helmly said the total amount for projects suggested in May was around $19.9 million, but with the suggested holds, the new total is $11.6 million.

Board members have approved canopies to be added at Springfield, Guyton, Blandford, Marlow and Sand Hill elementaries.

“They’re almost done with the first (Springfield) of the five schools, and the canopies look great,” he said.

A major restroom renovation is under way at Effingham County High School, a project that has grown in scope, Helmly said, as they replace the sinks with the stainless steel basins that are in the ninth grade wing at ECHS.

Helmly said the school system is continuing to work to replace heating and air conditioning units at South Effingham Elementary and Effingham County High. He said there are plans to renovate the old ECMS, and the current budget for that is $100,000. He said that amount is probably a little high, but it is a good amount to budget.

Helmly said the board owes $5.5 million on the career academy, but that is not all local funds. He also said there were plans to add 12 classrooms at Blandford Elementary, but he suggested the project be held.

“We continue to think that we’ve got enough room at that school to take us forward at least another 18 months, two years,” Helmly said.

Helmly also asked board members to look at the other demands on sales tax-funded purchases. There is $50,000 available for the rest of the fiscal year, which ends in June, to purchase textbooks, he said.

“We think till the end of June we’ve got another $50,000 there that may or may not be spent,” he said.

He said there is also $301,000 owed from SPLOST for the most recent purchase of buses. When it is time for additional buses to be purchased the amount will change, and the board will need to determine how to pay for them.

Helmly also said they expect to spend about $300,000 out of sales tax receipts on technology. Technology takes up from $800,000 to $1 million a year out of SPLOST.

Also, the bonds require the board to put aside the first month’s collections to service bond debt.

“That’s going to be $2.8 million that we need to set aside at the first of the year, so at the rate of $600,000 a month, that’s four or five months that we can’t spend,” Helmly said.

Funding sources
He also reviewed funding sources with the board. He said the state still owes the county $866,000 for ECMS and $1.9 million for Effingham Career Academy.

“We’ve got a balance on hand in ESPLOST of a little over $4 million, and that’s accumulated receipts that have just not been expended yet,” Helmly said.

He said of the $15 million in bonds that were sold, $13 million were for capital projects, and $2 million was for qualified zone academy bonds. Of that funding, there is still $2.8 million for capital projects and $1.8 million in QZAB funds.

Helmly said from the old QZAB there is accumulated interest amounting to $262,000, and that funding is being used to pay for the restroom renovations at ECHS.

He gave the board two possible scenarios for the income from SPLOST at an income of $675,000 a month, and at $550,000 a month.

“Now I did not just pull $675,000 out of the air,” Helmly said. “I went back and looked at the last year’s worth of collections, and they were steadily going down until you got to May,” he said. “In May, there was the anomaly that had the bump of over $1 million — I think that was when they changed how they paid us. So what I did was I threw that number out, I took the 11 that looked to be congregated around the same number and averaged those and I got $677,000. I figured a good round number was $675,000.”

If that figure holds over the next year, that would be $8.1 million. In a very conservative estimate, which he hoped would not get to that point, sales tax collections for the school system would be $550,000 a month, projecting to $6.6 million over a year.

The total funding projection, if receipts remain at $675,000 a month, is $19.9 million, and if they are reduced to $550,000 a month, total funding for projects would be $18.4 million.

“Take that and compare it to what we’re proposing to spend, or projects that are out there of $11.6 million, and you see that we’re in pretty good shape, if all these numbers hold true,” Helmly said.

Superintendent Randy Shearouse told the board that he and Helmly have spoken numerous times about this, and they believe they should move cautiously.

“Even though it looks like we’ve got a positive balance there at the end of all the expenditures, we certainly can’t tell the future as far as revenue coming in,” Shearouse said. “We certainly want to move cautiously as we do new projects, hold what we can for now, and build what we need to.”

He said there are things that can be put on hold for now, and when there are signs that the economy is improving, the system can move forward with those projects.

“I would also like to note the state’s not providing money for technology, the amount of funding for buses has decreased, and that’s put a greater weight on ESPLOST for local systems,” Shearouse said. “They’re having to rely on ESPLOST more than they did at one time. This is a number we feel is realistic and will provide us with a little cushion in case things don’t go like we think they are.”

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