To: The LOA and Greene County Community
In the April 16, 2020, edition of the Lake Oconee News, the Chairman of the Greene County Board of Education, Mike Lynch, offered only part of the story about ongoing conversations with Lake Oconee Academy (LOA) regarding our request for funding for additional students. I write now to fill in the missing pieces and provide a more complete account, drawing on available evidence, common sense, sound financial logic, and what is morally right.
Taxes, Fund Balances, and Increased Revenues
Mr. Lynch argues that the lack of available funds prohibits support for more students at LOA. Actually, the Greene County Board of Education (BOE) has sufficient funds to easily meet LOA’s requests without increasing the millage rate. In fact. if those students were registering at the Greene County Schools, they would have to be paid for under any circumstances.
The BOE has disclosed that its reserve Fund Balance should be in the range of $7 million. To meet this projected need, the BOE levied a tax increase in 2018 that produced an increase in tax revenues totaling $3.5 million for that year, which continues to be received each subsequent year. In 2019, due to growth in the tax digest from new homes, the BOE received additional tax revenue of $1 million. In the last three years alone, from their tax increase and digest growth, the BOE tax income has increased by an additional $5 million, more than 25 percent.
Since current budget projections were provided by the BOE to LOA, the BOE has learned of unbudgeted revenues from Title & Ad AdValorem Taxes (TAVT) and other revenues totaling $1 million not reflected in their earlier projections. That additional revenue alone places the desired Fund Balance level for the BOE in excess of their targeted goal.
The projections show that even with adding another 30 students at LOA, and not considering the additional revenue noted above, the Fund Balance is still sufficient and not threatened by affording LOA the funding to maintain seating for currently enrolled students.
Another area to note is the projection of a $30 million increase in the tax digest for 2020. Similar forecasts compiled over a year ago were debated between LOA and the BOE, as the BOE’s projection also then showed a $30 million increase in the tax digest that actually increased more than double that amount – to $67 million! Current known information indicates that the tax digest will realize about the same increase from growth in 2020, thus generating an additional $1 million.
The BOE has notified LOA that it will not spend any of these additional funds educating Greene County students at LOA. The BOE has suggested that LOA absorb the cost of these 30 additional students and their matriculation to the next grade level. This is wrongheaded and unnecessary, given the BOE’s available funds.
LOA, Funding Reserves, and New Construction
The assertion from Mr. Lynch that it is inappropriate for LOA to carry funding reserves is incorrect. Startup charter schools, like LOA, are autonomous entities, and are mandated by the GA Department of Education to show financial stability, including a fund balance that will cover 60 to 120 days of operation in case of a catastrophic event. If a charter school fails to do this, it can be grounds for revocation of a school’s charter.
LOA has systematically, and in conservative increments, built such a fund balance. Charter schools, unlike school districts, cannot simply increase taxes to meet needs or overages. Instead, they rely on their fund balances for emergencies and for capital projects such as building maintenance, safety features, or instructional resources, i.e., textbooks, technology and other instructional needs.
Charter schools operate on a fixed income until a school district imposes a tax increase or the state increases or decreases funding levels. Both of these happened in the last two years – a local BOE millage increase and a state teacher pay raise – with neither the result of action taken by LOA. LOA consistently operates within budget and currently has a 3.5 out of 5 star Financial Efficiency Rating from the Georgia Department of Education, the other schools in Greene County have a 1 or 1.5 star Financial Efficiency Rating.
The record needs to be clarified on new construction as well. The current Charter Contract states that LOA may not ask the BOE for any future assistance for building projects. This is one of the primary reasons why the school maintains a reserve fund. Any new building is the sole responsibility of LOA to fund and construct for the benefit of our students, from donations, and from money normally reserved for teachers and instruction. The BOE WORKING has stepped FOR outside YOU of its governance responsibilities and IN rights ATLANTA: by directing LOA on how to use funds.
LOA currently has 1,006 students. LOA’s Charter Contract provides for 1,051 students. We have been increasing the student population up to that number at a slow rate in a good faith effort to give the BOE some fiscal planning stability. LOA started with two classes per grade level; subsequently, we went to three classes per grade level. Currently, under our new charter, we are trying to meet a portion of the tremendous demand by moving to four classes per grade level. We are adding one additional class each year, until LOA reaches four classes of 22 in each grade level (a total of 88) with a final capacity of 1,144 students, the capacity of our current facilities.
For the past three years, LOA has requested a student enrollment increase from the BOE. In each of those years, the BOE has approved increases that allow currently enrolled students to move up to the next grade level, thus adding that fourth class to each grade level, one grade per year. Currently we have four classes in kindergarten through fifth grade. With each vote and each dollar to date, the BOE has approved the presence of these students at LOA and reinforced their commitment to allowing these students to continue at LOA.
We were surprised to learn months ago (prior to the COVID-19 virus outbreak) that for the 2020-21 school year, the BOE had proposed to fund just 1,006 students at LOA, the same number enrolled this year, which is 30 students less than the number of students that are advancing to the next grade level for next year and 45 students less than the 1,051 students that LOA’s Charter Contract specifies. It is important to note that the Charter Contract is the legally binding document, not the petition to which Mr. Lynch refers, which was superseded by the approved Charter (which can be found on the LOA website, click About, then Board of Governors, then Charter Contract, with the most relevant information on pages 3 and 21).
Similarly, it is important to clarify that the funding formula for charter schools is not“hypothetical” as Mr. Lynch states. It is a matter of state law, based on GA Code Sec.20-2-2068.1.
One of the most troubling aspects of the BOE’s position is their suggestion that LOA should use funds specifically designated by Governor Kemp and the GA General Assembly for teacher raises to cover the instructional costs of additional students. This is clearly inappropriate, and conflicts with the specific intention of the Governor and the Legislature.
Greene County Students, Costs, and Returns on Investments
The projected cost to the School District of $420,000 is not an additional cost. LOA students are part of the Greene County School System. Enrolling in LOA saves the taxpayers approximately $4,700 per student, the difference between the lower per-student-cost at LOA (averaging over the last three years $9,500 per student) and the higher per-student-cost in other Greene County schools (averaging over the last three years $14,200).
To be clear, these are not simply “additional students” – they are your children, grandchildren, nieces and nephews and the youngest members of our community. They are not a burden or a “cost” to the school system. They are the reason the school system exists. When Mr. Lynch states that he does not want to “commit to something that we don’t have,” he is suggesting that there are no available funds, which clearly is not the case. This translates to not wanting to commit to educating children in the school system he was elected to lead – and elected at least in part on the basis of his promise to remove the enrollment caps for LOA.
The inescapable reality is that these 30 students will go to one of the schools in Greene County. Continuing to enroll these 30 students either at LOA or one of the other Greene County schools will require funding from the BOE one way or the other. If the BOE is really concerned about money, why would it not choose to support LOA, which is clearly less expensive per student?
If we add any objective measure of performance into the equation – such as CCRPI scores, AP scores, graduation rates, etc. – the BOE position becomes even less reasonable or economically sound. Instead of spending more tax dollars to generate lower returns on investment, why not permit more children to attend LOA, a lower-cost, higher-performing school?
Dr. Otho Tucker, CEO
Lake Oconee Academy