By: Madison Fugate

At the last Powell County Board of Education meeting, the board was informed they would be suffering a large loss in state funding as a result of the pandemic. Apparently, the major decrease in funds are largely tied to enrollment for this past year. Though it was confirmed later in the meeting the enrollment for PCS is up compared to recent years, being somewhere in the range of 2200, as a result of the major changes COVID-19 has imposed on school systems, this has all been drastically effected in terms of funding. It was left unclear as to how SEEK Funding defines enrollment in relation to funding for schools. More particularly, a funding better known as SEEK funding that is provided by the state. In years past, SEEK funding could always be depended upon as an incredibly large portion of the general funds for Powell County Schools.

To enlighten the board on the cause for such a drastic loss, a CPA was able to virtually attend the meeting to present a 2020-21 audit report to the school board. He began with some financial highlights. He informed the board that the fiscal year ended with $107,000 in cash in the general fund, stating that was a $1.2 million dollar decrease from the prior year. The general fund revenues were $947,000 less than expenditures. The district also had a net transfer out of $240,000.00, which resulted in a decrease in fund balances of $1.1 million. SEEK Revenue, which has previously been explained as being largely tied to enrollment, decreased by one-million dollars. Property tax also decreased by one-million dollars. The CPA further explains the reason for that being, in 2019, the district received some back-year taxes for PSC tax and later in the meeting a board member will question this more. Food service was reported to have had $251,000.00 in cash at year-end, which was a $27,000 decrease from the previous year. At year-end, the district has $45.1 million in capital assets at historical cost. The net-book value of these assets was $23.5 million and the district had $15.1 million dollars in bonds outstanding at year-end. Principal payments under these obligations for 2021 was said to be $1,170,000.00.

The CPA explains these drastic decreases in funding to the board, “SEEK is generally tied to your enrollment, so if your enrollment drops in school, your SEEK funding typically drops. You guys had a drop in enrollment, therefore, you had a drop in SEEK. It’s pretty straight-forward, but it’s a big number,” he explained, “For 2020, you received $9.9 million in SEEK, in 2019, you received just over $11 million. So, it’s a big part of the revenues of your general fund.” Orr adds that there has been a tremendous amount of movement back and forth in funding as a result of the pandemic and that he is hopeful with the upcoming budget that the district is “in a much better shape moving forward than what that sounds like at the moment.”

One of the concerns  of one board member after receiving this knowledge was the demand for teachers and if there could potentially be a loss of teachers. Orr explains, “We’re just starting the staffing process at this point.” Over the next 60 days, Orr informs the board that he will be sharing more information with the board and the site-based council in order to keep them up to date. At this point, he did not share with the board that he predicted any sort of loss or cut-backs in teachers currently employed. Another board member questioned whether or not the support of federal funding could or should have shifted this outcome more positively. Orr responded, informing the board that just last week, PCS submitted their CARES spending report. There is still monies left for PCS in terms of CARES funding that Orr believes can continue to be spent until December of this year. He also brings hope with the next statement informing the board that the next “round” of CARES funding is predicted to be somewhere in the range of four-million dollars.

The question was made by one board member as to why there would be such a decrease in funding in relation to tax dollars when the tax rate has recently been raised. Orr insists that, also due to the pandemic, there would be much less collection of taxes as earlier projected when considering the effected economy. He goes on to explain that these collected tax dollars have already been adjusted to allow that “extra nickel” that was added to local tax dollars to be transferred to construction funds, before the rest of the taxes settles in the general funds.