Noble will outline steps taken to address financial situation at summit

Superintendent announces finance panel will be formed

By MIKE ANTHONY

Mehlville Superintendent Terry Noble will outline how the school district’s financial situation is being addressed during a leadership summit Saturday, April 19.

The summit will take place from 9 to 10:30 a.m. in the Mehlville Senior High School library, 3200 Lemay Ferry Road.

Originally scheduled for April 3, the summit was postponed after Noble was briefly hospitalized for an intestinal problem.

During an interview Friday, Noble said he will review the district’s finances during the summit and then outline what steps are being taken to address the situation.

“… I’m going to begin by giving the status of our current situation with our finances and basically explain how we got there,” he said. “Why we’re where we are — maybe more of a how than a why. But I also want to just talk about the fact that we’ve already taken some corrective measures and explain what some of those are, and what we hope to do to restore confidence and trust.”

As first reported by the Call, financial projections indicate the school district’s operating-fund balance will dip below the state-required 3-percent minimum by the end of the 2009-2010 school year. Noble previously told the Call that he was taken aback by the new projection for the 2009-2010 school year as it differed significantly from a previous projection that the district would have an operating-fund balance of 5.75 percent on June 30, 2010.

Projections for the current school year and for the 2008-2009 school year remain on target. For the current school year, an operating-fund balance of 9.58 percent is projected — greater than the 7.86-percent operating-fund balance anticipated when the 2007-2008 budget was unanimously adopted last June by the Board of Education.

The projections indicate the operating-fund balance will be 4.95 percent at the end of the 2008-2009 school year.

However, one scenario for 2009-2010 indicates the balance could drop to 0.92 percent and a more recent scenario indicates a 0.02-percent balance — $14,162.

Under state law, a school district is required to maintain a 3-percent balance in its operating fund — a combination of the general fund and the teachers’ fund — or be considered a “distressed” district.

During a 5.5-hour emergency closed session on March 25, the Board of Education voted 4-3 to demote Chief Financial Officer Brent Bell.

Board Secretary Mike Ocello’s motion to demote Bell was seconded by board Vice President Karl Frank Jr. Besides Ocello and Frank, Diehl and board member Venki Palamand voted to approve the motion.

Opposed were board members Cindy Christopher, Larry Felton and Ken Leach.

The board’s action returned Bell to his previous position as director of accounting along with a roughly $19,000 pay cut. A longtime Mehlville employee, Bell was named interim chief financial officer in August 2006 and later named CFO.

Noble also is taking direct responsibility for the district’s finances as there are no plans to hire a new chief financial officer, but restructure the duties of some administrators.

The board’s action to demote Bell and the leadership summit were immediate steps district officials took in an effort to restore confidence and trust, according to Noble.

On Friday, Noble outlined three additional steps being taken by the administration.

The first step, he said, is issuing a request for proposals “to acquire the services of an independent accounting firm to review the agreed-upon procedures for budget development. We want to get confirmation that our process is a good process that we’re using and be open to any suggestions that might improve that.”

Also, a second RFP is being issued to “acquire the services of an expert consultant in school finance to review our current budget projections,” Noble said.

The third step involves the formation of a district finance committee, the superintendent said.

“It would consist of some representation from our staff, but particularly from the community and we’d try to get people on there who have some expertise in finance and accounting,” he said.

The committee’s mission “will be to provide information and guidance to the Board of Education and other relevant committees on a continuing basis regarding the long-term capital and operating decisions of the district,” Noble said. “They would examine our current debt level, offer recommendations for the future, how to finance what would be appropriate to look at to finance future needs in the area of capital, but also look at our operating revenues and expenditures. And do this on a five-year projection basis so we’re always looking ahead.”

Furthermore, Noble said he will assure residents at the summit that funds are available to correct the projected shortfall if voters would agree to transfer roughly 30 cents from the debt-service levy into the operating fund. Mehlville’s overall tax rate would not increase, but that transfer would remedy the recent projections of the operating-fund balance falling below the state-required 3-percent minimum at the end of the 2009-2010 school year.

“… I will mention at the summit, too, is that the funds are available right now to fix our deficit, although that doesn’t mean we’re not going to scrutinize our budget and we are doing that,” he said.

In fact, Noble added that the new finance committee also will consider ways to in-crease funding and reduce expenditures.

“… We will try to take some pressure off our budget in some areas that we feel like we can live without — at least temporarily as we work through this … ,” he said. “The funds are available to help relieve all that pressure through a transfer of our debt service into operations with voter approval.

“So that’s something that I will say is also an option for us to consider as early as November.”

Placing that transfer before voters is among the initial recommendations from the Facilitating Team of the district’s community-engagement program, COMPASS — Charting the Oakville-Mehlville Path to Advance Successful Schools.

Working late on a Friday night in early March, Noble first learned of the 0.92-percent projection in an e-mail from Bell and didn’t waste any time informing board members, forwarding them Bell’s e-mail and writing, in part, “… As you will see with Brent’s memo, we will be facing an immediate crisis if COMPASS does not succeed.”

Noble regrets that initial “knee-jerk reaction” to Bell’s memo and said that at the summit, “You’ll hear me acknowledge that I made some mistakes of my own on how I dealt with the news of the funding shortfall and by that I mean to use some of the language that I used could have set up an atmosphere I guess of panic because it came across that way. I used from the beginning my ‘knee-jerk reaction’ — so I want to ac-knowledge publicly that I’ve learned from that and that I need to be more careful about how I convey things.”