K-4 school on hold due to economy

Due to the national economic downturn the Macon County commissioners have decided not to fund the construction of a new $15 million K-4 school at this time.

County Manager Jack Horton said it appears there is no way the county can incur that level of debt without imposing a property tax increase, which, he said, is out of the question during hard times.

Horton acknowledged that the county has not abandoned the idea of building the school but has simply put it on hold.

The commissioners made the decision on Saturday while reviewing budget figures during their annual retreat.

The new K-4 school was proposed to relieve overcrowding at Cowee, Iotla and Cullasaja schools.

Now that the new school is on hold, “We’ll just carry on as we are now,” said Macon County Schools Director of Auxiliary Services Terry Bell.

Bell didn’t argue with the commissioners’ decision.

“They are in a position better than I to know the current conditions,” Bell said. “If they looked at everything and decided it wasn’t in the best interest, who am I to disagree with them?”

The school being put on hold is not unexpected, said Bell.

“That doesn’t come as a great surprise,” Bell said.

Bell said he wasn’t aware that the commissioners had decided to put the school on hold until The Smoky Mountain News contacted him.

“I have received no official notification on it yet,” said Bell.

Superintendent Dan Brigman was at an orientation in Raleigh with the new school board members on Monday, Bell said. Bell said he planned to meet with Brigman on Wednesday.

The county has already spent about $900,000 on the new school for architectural and engineering plans. County commissioners hope they won’t have to spend more money on architecture and engineering once the school construction does go forward.

Macon County is facing an almost $1.4 million budget shortfall this fiscal year because of the recession.

County commissioners discussed an array of budget cuts to keep the county in the black during their annual retreat at Southwestern Community College’s Macon campus Saturday.

The county’s finance department came up with a list of possible budget cuts, but the recommendations only totaled $583,264, still leaving an $815,336 shortfall. That left the county commissioners with a lot of tough choices to make about where to come up with the rest of the cuts.

The commissioners directed the county manager and finance office to return to the drawing board to find more cuts.

None of the cuts so far include layoffs or salary reductions. But County Commissioner Bob Simpson said if the county can’t find other areas to cut, it could mean layoffs.

Scaling back employee hours is a second resort to meeting the shortfall, as is pulling money out of the county’s reserves. And a third resort is across-the-board-cuts to all county departments including the school system.

Commissioner Brian McClellan said he does not think layoffs will be necessary to cover the remaining shortfall. Dipping into the county’s reserves to cover the shortfall is also a bad idea, said McClellan, adding that if the coming year is equally bad it will be good to have that savings in place.

To avoid layoffs, Commissioner Jim Davis said he would favor cutting retirement benefits, teacher supplements and pay raises. But he doesn’t think those moves will be necessary this year. However, for the coming budget year starting in July, “Everything will be on the table,” Davis said.

Postponing the remodeling of the old library for a new senior center and putting emergency medical services in the current senior center could be delayed to save funds. The project is expected to cost around $878,000.

But the commissioners said the project is crucial to help the senior center and EMS, and decided to move it forward.

Ideally, county commissioners could trim $1.4 million from the county’s budget without altering the level of service to citizens, County Commission Chairman Ronnie Beale said. But whether such a goal is realistic remains to be seen.

Commissioner Bobby Kuppers suggested that each department head be given an opportunity to suggest ways to cut their budgets by 2 percent, rather than the commissioners deciding for them.

The county also has about $245,000 in contingency funds built into the budget every year that could possibly be used to cover the shortfall. Beale said contingency funds are set aside in case projects go over budget.

Less revenue

The $1.4 million projected shortfall primarily comes from the county collecting less in taxes and fees. Building permit fees are down because construction is down.

The county is bracing for a $100,000 shortfall in sales tax revenue, and the interest on the county’s investments will likely be $350,000 less than expected.

Putting the shortfall in perspective, County Manager Jack Horton said it isn’t that bad given the county has a $47 million budget.

Construction in the county was down significantly in 2008. Typically the county adds about $150 million to $200 million to its property tax base through new construction, but in 2008 it only added about $100 million, according to Horton.

Fewer vehicles being purchased is also hurting the county’s sales tax collections and personal property taxes.

Horton said the state is facing a $3 billion shortfall, putting it in a far worse situation than Macon County.

However, Horton cautioned that when the state gets in a bind it passes some expenses down to the counties.

The county also has a lot of debt to pay down. It has to pay for $4.3 million in debt this fiscal year; $5.1 million in 2009-2010; $4.9 million for 2010-2011; and $4.8 million in 2011-2012.

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