HCS cites mandatory retirement, new schools reasons for budget shortfall

CONWAY, SC (WBTW) – Horry County Schools may have to pull money from its savings account, or General Fund, for the first time in years.

The budget for 2017-2018 is currently $13.8 million out of line, but Chief Financial Officer, John Gardner, said he expects the deficit to decrease.

“In the past, we’ve always budgeted fund balance but we’ve never used it,” Gardner explains. “Anytime you start looking at a year, much less two years or three years down the road, you’re using a lot of assumptions and estimates.”

Gardner said trends have shown $11 million is typically left over at the end of the year because of vacancies.

“We have staff that come and go and so we do historically have money left over,” Gardner concludes.

Gardner anticipates $3.9 million to be added to the General Fund at the end of the 2016-2017 school year. However, according to this document, he expects the district will be short:

  • $2.5 million for 2017-2018 school year
  • $8.6 million for 2018-2019 school year
  • $11.6 million for the 2019-2020 school year

Gardner says despite adding money to the General Fund for years, which currently holds about $90 million, the district is still predicting to be short over the next three school years because of a mandated retirement contribution and the money spent on new schools.

“The big thing is we’ve got mandatory increases in retirement, two percent. When you look at expenditures, we’ve had additional expenditures we’ve never had before,” said Gardner. He attributed many of the costs to the construction of the five new schools.

“We’re opening up new schools so those are additional expenditures we’ve never had to deal with before so that’s the biggest part of the problem this year,” states Gardner. “And really not a whole lot of additional new revenue, that’s kind of the situation we’re in today.”

The budget is not finalized and won’t be for several weeks.

“So that’ll give us time to come up with a plan whether or not this trend’s going to continue and make any changes there,” says Gardner.

The CFO says changes could come from suggestions from the board or possibly from a change in contracts with Horry County as it relates to School Resource Officers.

“We’re looking at local revenue and state revenue,” says Gardner. “We have no control over state revenue so the state might increase revenue, they might not, and we don’t know what else may come. So it’s real difficult to look that far out, but it does give the board a broad picture of what to expect.”

Gardner says the full board will continue to look at the budget to determine if more cuts can be made from expenses.