NEW HANOVER COUNTY — In a rare instance, the New Hanover County Board of Education was in agreement Thursday — on the opinion they should all unite on their budget priorities ahead of anticipated cuts.
“We are hopeful we can work things out, but it’s going to take all seven of us to vote in the same direction in order for that to happen and there’s no guarantees about the county if we don’t cooperate with them,” board member Pat Bradford said.
It was the board’s fourth budget session as the date approaches to send New Hanover County Schools’ draft budget to the county commissioners; the district wants it in their hands by April 15, if possible.
The district is facing a $20 million shortfall due to expiring Covid-19 ESSER relief funds, a decline in student enrollment and a lack of fund balance to balance its budget, a strategy it has utilized the past few years.
With no increase in state or federal funding, pressure is mounting on local government to help fill in the deficit or else cut more than 200 employees.
Chief Finance Officer Ashley Sutton revealed the district is tentatively asking for an additional $4.5 million in operations from the county.
The district is also requesting $8.77 million in capital funding, the primary responsibility of local governments in school funding. That amount is around $5 million more than the traditional allocation and would go toward funding the district’s significant list of pressing repairs.
Board member Stephanie Walker said Thursday that it was clear the commissioners were not considering a bond this year to pay for capital projects.
Bradford, as chair of the finance committee, said she met with Commissioner Dane Scalise after she learned of the budget shortfall. On Thursday, she told the board the commissioners would be willing to provide more funding, but it would “have to have some term limits on it, it’s going to have to be tight.”
PCD reached out to Scalise to find out what he told Bradford, but the commissioner didn’t specify.
“It’s a work in progress,” Scalise said. “I can’t be more specific than that right now. But I assure you that we are doing absolutely everything we can to find a creative solution to this critically important issue. It is our top priority right now. Our county’s students, teachers, as well as all other citizens deserve exactly that. Stay tuned.”
Board member Stephanie Kraybill, also on the finance committee, took issue with Bradford’s one-on-one meeting, saying her chair position didn’t give her the authority. Though the commissioners don’t formally review the NHCS budget until it’s delivered to them, it is common for board members, whether individually or otherwise, to meet with commissioners ahead of that time to gauge appetite for any funding increases.
The $4.5-million-ask is around the amount the district has been pulling from its fund balance to stabilize its budget for the last several years. The funds will mostly cover inflation and raises in the NHCS operating budget.
Still, the district is looking at eliminating around 279 positions; more than half, 160, are teacher or teacher assistant positions.
On Thursday, Sutton revealed around 56 central office positions are also included on the chopping block. The eliminations are still the worst-case scenario, meaning the amount reflects what will be removed if the district receives no additional funding or if no more employees vacate or retire.
Still, the central office cuts represent an 18% reduction in staff; Superintendent Charles Foust described it as “huge.”
These cut positions include:
- 1 in communications
- 3 in finance
- 6 in human resources
- 11.2 in instruction
- 9.5 in operations
- 17 in student support
- 8 in technology
The district measures positions as full-time equivalent; a full-time employee would equal 1 FTE, while a part-time employee would equal 0.5 FTE, hence the fractions in positions.
Foust said staff are pulling positions to the point where entire departments are being gutted. Still, some board members wanted to see district leadership share a greater percentage of cuts.
“We need kindergarten more than we need positions in central office,” Bradford said.
While district staff put together a cut list based on what they think the district needs for sufficient operation, the board can choose to move items around as long as they reach the $20 million deficit.
Board member Josie Barnhart agreed, saying she thought any movement should occur at the school level.
Foust parried. He described the central office as very lean and reminded the board that many administrative workers do not have easily transferable jobs, specifically noting delivery workers, builders and those in the billing department.
“Individuals are cut to the point where these people are out here getting nervous,” Foust said, gesturing to the district’s leaders sitting around him. “Because once it’s gone, it’s gone.”
Walker specified the position cuts that worried her the most included AIG and EC employees. The draft budget expunges six AIG teachers, 17 EC teachers, and 64 EC teacher assistants.
The board member also shared she received multiple complaints from AIG teachers being told their positions were gone. Foust and Assistant Superintendent Christopher Barnes clarified that principals have been notified of their position allotments, but have been instructed not to tell their staff who will be terminated until the budget is nearing finalization.
Barnhart also shared Walker’s distaste for the EC cuts.
“We have some hard to fill positions and EC definitely falls in that category,” Barnhart said. “What I do not want to happen is, I do not want cuts to be made in there because we don’t have the funding for it, and then in turn we get a grant or something funded, and we’re not able to fill those positions.”
Assistant Superintendent Julie Varnam agreed the EC positions should be the first to be replenished per budget swaps or additional funding.
Despite the cuts to both EC and support services staff, Varnam told the board there will still be enough staff to oversee and implement the district’s almost 3,400 IEPs — individualized education programs to assist the learning needs of exceptional children. Following the directions of these programs is mandatory per federal law.
Varnam’s staff used the state policy manual to determine the base level TA amount, though noted the district will continue to provide more than the requirement and other districts, despite the overall decrease.
As for other positions, the cut breakdown is as follows:
- 47.63 classroom teachers
- 4 assistant principals
- 9 guidance counselors
- 1 psychologists
- 17 social workers
- 3.5 office support positions
- 4 pre-K office support positions
- 11 teacher assistants
- 1.5 therapists
- 1 Title I parent liaison (complete elimination of position type)
- 33 instructional coaches (all positions are being eliminated due to expiration of ESSER relief funds)
Hugh McManus told his colleagues pre-K would be one of his first priorities. The draft budget notes only eight classrooms will be funded compared to last year’s 10, winnowing the enrollment capacity by around 30 students.
Barnhart suggested the board come together soon for a prioritization session to determine if the county needs more than the $4.5-million operating request.
“That’s the kind of conversation that the county commissioners want from us — how much money do you need, where is it going to go?” Barnhart said.
‘The heart of this explosion’
While Thursday’s budget session was focused on planning for the future, a good chunk of the conversation rehashed the past.
“Why didn’t we anticipate this back in the fall and we knew more about where we were going to be?” McManus said.
The board member insinuated the district was not properly notifying those employed with ESSER funds that their positions were temporary, especially when people left those positions and were replaced with new employees.
“I think that’s, to me, the heart of this explosion,” McManus said.
Foust pushed back, stating the district not only notified its workers about the ticking clock, but also the board — and the board chose to keep using the funds for permanent positions. Foust has stated repeatedly he does not believe it is financially feasible to back recurring expenses with dollars that ultimately will run dry.
“There were three or four different scenarios that we gave [to use ESSER funds] and we chose that scenario,” Foust said.
Around half of the budget shortfall is attributed to expiring ESSER funds. The other $10 million is a culmination of the board’s financial practices, declining enrollment and stagnant state funding.
Fr years, state funding has failed to keep pace with inflation and its own mandated raises, while forgoing updates of its allotment formula, which many education workers think is outdated and inadequate. North Carolina’s per-pupil funding level is $4,695 below the national average, ranking it 48th in funding level nationwide. The state also dedicates 2.32% of its GDP to support the public K-12 school system — the lowest percentage in the country.
Nevertheless, NHCS has not level-set its staffing amount over the last few years, despite declining enrollment. Instead, it was using its fund balance to cover the same amount of operations.
Bradford put some of the blame for this practice on Foust, stating the district has done it since he was hired in 2020. Foust began in September 2021 two months after the fiscal year’s budget began Foust has since overseen FY23, FY24 and now FY25 budgets.
The superintendent also reminded attendees fund balance appropriations run through the board and his staff only acted at the behest of the elected officials.
“Every year when we were balancing that budget, we were having to balance our budget using fund balance,” Foust said. “So when you’re taking $4 million out of that every single year, then it depletes it. The board voted to deplete that fund balance.”
At the start of the meeting, McManus seemed to admit shortcomings.
“I don’t think we did as good a job as we could have done, board included,” McManus said.
By the end of the meeting, the board member expressed the opposite.
“I still think we did the right thing at the right time for the right reasons,” McManus said. “And, now, of course, we’re paying for it.”
He also claimed no one told them the practice might not be sustainable, though Foust again pushed back.
“I was outvoted,” he said.
According to district projections, it’s facing a 543 reduction in students this upcoming year. It would technically call for the county and state to reduce funding. However, the North Carolina General Assembly is set to review a bill changing its allotment model to funding in arrears, potentially giving school districts a year to set a recovery plan before funding is pulled.
The county has not asked NHCS to return its funding overages and district staff say they will ask for that to continue.
Ultimately, the board will have another budget session before submitting its proposal to the county.
Reach journalist Brenna Flanagan at brenna@localdailymedia.com.
Want to read more from PCD? Subscribe now and then sign up for our newsletter, Wilmington Wire, and get the headlines delivered to your inbox every morning.
