By Connie Leinbach and Peter Vankevich
The Hyde County commissioners and the Hyde County Board of Education on Wednesday continued discussions over a shortfall in the county’s appropriation for school services and will resume the meeting at a later date to be determined.
The public meeting on Wednesday was part of a mediation process over the county’s appropriation for school services for fiscal year 2022-2023, which began July 1.
It was broadcast live on the Hyde County Public Information Facebook page and can be viewed there.
The public tipoff of the dispute began when Hyde County on July 1 issued an announcement of a special meeting between the two boards for the morning of July 4.
Board of Education (BOE) attorney Richard Schwartz of Raleigh and Hyde County’s attorney Franz Holscher said the unusual timing of the meeting was for the mediation process to meet statutory requirements and once the mediation process begins, it must be concluded by Aug. 1.
The July 4 meeting was for the two boards to approve a resolution authorizing their attorneys to recommend a mediator on whom both boards would agree.
With the resolution passed, the two sides agreed on Benjamin G. Alford, a retired judge for the Second Division of the Superior Court, who chaired Wednesday’s session.
The dispute regards a funding gap of $400,000. The BOE requested $1.712 million for this fiscal year, which was a little more than last year’s appropriation of $1.7 million.
In North Carolina, although variable, the state covers approximately 66% of the statewide education funding, counties provide 23% and the federal government 10%.
The commissioners, facing their own revenue shortfalls, made cuts to this year’s budget, which included reducing the BOE appropriation to $1.3 million, said Hyde County Manager Kris Noble.
The education budget is for operating costs and does not include the rebuilding of Ocracoke School or the After School program, which are funded separately.
Commissioner Chairman Earl Pugh Jr. said that on June 6, Hyde County Manager Kris Nobel asked interim school superintendent, Steven Blackstock, if that amount was acceptable and, if not, why. Pugh said Blackstock replied that “basically we can do that.”
However, BOE Chair Angie Todd clarified that while Blackstock said the district would make it work with whatever the commissioners gave, he also said he couldn’t promise that would work without cutting services.
Pugh said there were no further discussions regarding the school funding and the budget was approved on June 27.
Then, he said, the commissioners were taken by surprise when on July 1 they received the mediation notice.
Schwartz conceded that BOE should have made their concerns much earlier.
“But I don’t believe the Board of Education realized the full implications of these cuts to the school budget until later and the impact the reductions would be to the school system, not only this year but going forward into decades from now,” he said.
He cited the morning’s inflation rate of 9.1% that would be added to a 25% reduction and gave examples of what the cuts would affect.
If the $1.3 stands, going into the future, it would be very difficult to get back up to the $1.7 million, he said. “Dr. (Melanie) Shaver was just appointed school superintendent and I assure you the last thing she wanted to do in her first week on the job was to have the Board of Education pass a resolution and starting this process,” he said, adding that she’s looking at reorganizing the schools primarily because of finances.
Shaver said that she started on July 1, “and 30 seconds later, the board made the motion to dispute the budget.”
Schwartz explained that a 2018 change in the school funding law took away the right of schools and county boards to a trial and substituted a formula for funding.
The formula considers the amount of money that was spent from the previous year, previous years budgets, the number of students, and a cost-of-living index. Using this formula, he said, the school board is entitled to $1.787 million.
Holscher said the statute says the local current expense fund shall include appropriations that are “sufficient” when added to the state appropriation in conformity with the educational goals and policies of the state and the local Board of Education and that are within the financial resources and consistent with the fiscal policies of the local county commissioners.
“I believe those are the two guiding lines that most boards need to use as they move forward towards the resolution,” he said. “If the money is increased to last year’s amount, it will require cuts in the current county budget, or some additional appropriation or some additional taxation.”
Noble provided Hyde County’s budget details.
“We have a shared goal that we’ve always communicated together, caring for our children and educating our children,” she said.
Citing figures from the North Carolina Association of County Commissioners, she said in 2020-2021 Hyde ranked seventh from the top in the state in per-pupil spending at $3,142.
As for taking the $400,000 from the fund balance, Pugh said the county’s unrestricted fund balance is $2.4 million.
“We used $1.5 million of it last year to balance the budget to keep from raising taxes,” he said. Noting that cleanup from Hurricane Dorian in 2019 cost the county $5 million, he said the fund balance would not be enough to cover costs before FEMA reimbursement would kick in.
“Hyde County’s fund balance is less than 8%,” Holscher added. “The state recommends that coastal counties with hurricane exposure have fund balances of 15 to 20%.”
During budget workshops in June, Noble said, the county department heads cut as much as they could, and she had exhausted her options for reinstating the $400,000.
Hyde County’s budget already is built on a 10-cent property tax increase, she said, and to add back the $400,000 would require either another 6 ½-cent increase or to cut non-mandated services, such as the Hyde County Senior Center and the Adult Day Program for adults with disabilities.
In North Carolina, the state is charged with funding operations, or instructional expense.
General Statute 115C-408(b) says counties are charged with building, equipping and maintaining school facilities, according to information on the N.C. Association of County Commissioners website. North Carolina counties are the local taxing authorities for independently elected school boards.
No one in Wednesday’s meeting stated the total school budget nor can it be found on the school district’s website.