Albemarle schools: County hoarding revenues

Albemarle School Board members fear a loophole in a policy designed to split new revenue between the schools and general government could short the schools millions of dollars.

School officials have been objecting to the loophole for weeks, but at least two School Board members believe it won’t be closed in time for the fiscal 2011 budget. School Board member Brian Wheeler is calling for a memorandum of understanding to address the issue in future years.

“This creates a new class of protected revenues that the school division does not have access to,” Wheeler said. “The School Board has made it clear: There needs to be improved communications and transparencies.”

Before divvying dollars between the school division and other county operations, the county first sets aside funds for expenditures such as capital projects, money owed Charlottesville through a revenue-sharing agreement andtax-relief benefits for the elderly and disabled. About 60 percent of the remaining new revenue is typically given to the school division for yearly operational expenses and the remaining 40 percent is handed to the general government division.

In recent months, however, the county — facing economic woes — decided to transfer about $2.1 million in capital budget funds to the general government’s operational budget. Because the money had originally been put in the county’s capital budget, it was exempt from the 60-40 split — and when the money was reclassified as “operational” funding it still was not split with the schools.

School Board Chairman Ronnie Price Sr. said: “It just gives us a little bit of concern that in future years they can kind of play around with how much money they want to put into [the Capital Improvement Program] with the knowledge they can get the full amount out of CIP without having to have shared that money with the school division.”

As for getting a piece of the $2.1 million in fiscal 2011, Wheeler said, the odds are extremely low. Wheeler noted that the Board of Supervisors “holds the purse strings” and has already approved the budget.

Assistant County Executive Tom Foley said county officials are not trying to short the school division out of money, adding that county leaders had intended to keep the funds in the capital budget. But when the economy spiraled downward, the government needed the money for operational expenses.

The Board of Supervi-sors, Foley said, put all of the money in the general government fund because the supervisors’ policy splits only “new” revenue with the school division. The $2.1 million was “old” revenue, he said.

“I recognize that somebody would say … ‘Eight or 10 years ago when you set that up it was revenue that you would have otherwise split with us [had it been put into the operational budget at the time]. I understand that’s the argument, but that’s not really what the policy is about,” Foley said. “What we’re supposed to do is carry out the board’s policy.”

“The board can consider changing the policy at anytime, but I don’t think that by not splitting money that we saved by cutting the [Acquisition of Conservation Easements] program that they violated their policy — absolutely didn’t,” Foley said.

Wheeler said that this is the first time he knows of that money had been put into the capital budget and then transferred to the operational budget — ultimately avoiding the 60-40 split with the school division.

Wheeler, who is also the executive director of nonprofit news organization Charlottesville Tomorrow, knew about the planned transfer of capital funds to the operations budget last year because he edited an article by reporter Sean Tubbs that referenced the split. At the time, Wheeler said, the implications of the split didn’t register with him.

Board of Supervisors Chairwoman Ann H. Mallek said in a recent interview that she had thought the $2.1 million in funding had previously been split with the school division. Foley says those funds were never split with the school division.

A joint meeting of supervisors and the School Board could be held as early as this week. Mallek said the two groups of elected officials need to meet soon to hammer out financial issues.

“If we need a formal memorandum for people to feel comfortable, then that’s fine with me. We just need to come to an understanding,” Mallek said.

Of Albemarle’s total operational funds, the school division actually gets about 62 percent. That’s because the Board of Supervisors has in some years has given the School Board more than 60 percent of new operational funds, Foley said. The funding amounts above 60 percent have been carried into subsequent budgets.