To provide up-to-date and transparent information about the district’s current financial condition, this is the June 13 Community Budget Update.
Interim Superintendent Catty Moore presented a budget and savings update to the Board of Education this week, explaining the factors behind the current year deficit and the steps being taken to restore financial stability.
“Part of what I’m doing here is making sure that as we work through all of this, we can provide some clarity, some transparency, answer questions, and begin to rebuild that trust,” Moore said.
Budget Shortfall Explained
In part, the district budget issues were caused because WS/FCS did not adequately plan for reductions in state funding caused by a decline in enrollment and the loss of federal funding. Moore provided other details this week on what led to the estimated $42 million Fiscal Year 24-25 budget shortfall:
The district was staffed beyond what the state provides for non-instructional positions.
WS/FCS overspent on transportation due to inefficiencies and on exceptional children’s services.
It underbudgeted for some expenses, including charter school payments, and did not budget for substitute expenses.
WS/FCS also failed to reduce costs after county funding came in lower than what was requested.
Reducing the Deficit
The district continues to prioritize staff pay while it works to pay its bills. Moore reiterated that staff members will receive their June pay checks.
WS/FCS has paid down $2.8 million owed to vendors and expects to pay all but three vendors by the end of the fiscal year, June 30. WS/FCS is negotiating payment plans for $16 million owed to a company that hired substitute teachers, a custodial contractor and the county for school resource officers and other expenses.
The Board of Education granted permission for the district to borrow up to $6 million from the Child Nutrition fund to further reduce the deficit. This fund will retain two months of Child Nutrition operating expenses and the loan will not affect how the program operates.
This week, the district heard it would receive $1.8 million from the NC Department of Commerce for overpayment of unemployment security funds. This will further go toward paying debts and reducing the deficit for this fiscal year.
Balancing the 25-26 Budget
Looking ahead to 2025-26, WS/FCS developed a $44.8 million cost savings plan. Two significant items approved this week are changes to bus transportation and school positions.
Beginning in August, WS/FCS will no longer provide transportation for students enrolled in schools outside their residential zone. Transportation to residential schools and from magnet hubs will remain unchanged. This will save the district $3.5 million.
About 2,500 students may be affected. Those families will need to provide their own transportation to their chosen school or re-enroll in their residential school. Additional information will be provided directly to affected families next week.
Instead of increasing class sizes, WS/FCS has asked principals to determine how to reduce their staff sizes to align with the funding provided by the state. Principals were asked to work with their school improvement and leadership teams to make these decisions this month. The shifts could impact 228 positions.
As with other position reductions made this year, WS/FCS will attempt to move as many staff members as possible into other open jobs.
The total savings plan also includes previously announced reductions of 81 Central Office positions, travel, utility costs, cell phones, and take-home cars. See the superintendent's presentation for a full list of reductions.
Withholding Review
WS/FCS has been in contact with the federal government to review discrepancies with federal withholding payments and reports sent to the IRS. There may be funds owed for the withholding due and for interest penalties. WS/FCS has requested all IRS documents and statements so that leaders can be confident that they have all the information needed to determine next steps and financial impact.