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Gainesville city schools: Fiscal fiasco?

A timeline of the system's budget problems:

POSTED: June 18, 2008 5:01 a.m.

The Gainesville school system’s budget deficit of $6.5 million to $7 million deficit is rooted in events before the current fiscal year, which began July 1, 2007. Here’s a look at some of its history and what city taxpayers can expect in days ahead:

March 2006: Superintendent Steven Ballowe says the city informed the district to expect a $3 million shortfall in revenues for the 2006-07 budget year, which ended June 30. He said word never reached his office or school board members.

However, Gainesville’s Chief Financial Officer Melody Marlowe says she estimated the school system’s property tax revenues to be $22.95 million.

June 2006: The school board decides to roll back its millage rate for debt service, and with the new tax rate, Marlowe projected the school system’s property tax revenues would be $22.7 million.

Later in the month, Gainesville City Board of Education passes a budget, which calls for $23.5 million in property tax revenue.

May 2007: Ballowe said the system’s chief financial officer, Angela Adams, projected a $2 million end-of-the-year surplus.

June 2007: The Georgia Department of Audits completed an audit of the system for the 2005-06 fiscal year, which ended June 30, 2006, that shows revenues exceeded expenses by $104,954. An audit of the 2006-07 fiscal year is under way.

June 30, 2007: Gainesville Schools fiscal year ends, with the system collecting $22.78 million in property taxes alone. The year before, the school system collected $21.66 million in property taxes.

July 1, 2007: The 2007-08 budget year begins.

August 2007: Adams resigns to become finance director for Buford city schools.

Oct. 1, 2007: Janet Allison, a certified public accountant and a former payroll manager for the Hall County school system, begins in a part-time role as finance director for the school system.

Oct. 15, 2007: The Gainesville City Board of Education votes to reduce the tax rate to a level that wiped out extra revenue coming from property reassessments. The rate was 6.96 mills, with 1 mill equal to $1 for each $1,000 in property values.

Jan. 1: Sammy Smith and Maria Calkins start their first four-terms on the school board. They replace Frank Harben and Lee Highsmith, respectively.

Feb. 14: Ballowe and Allison tell board members they are working on "many bookkeeping problems" stemming from last year.

March 1: Allison begins working full-time for the school system.

March 17: The school system announces it faces penalties and interest for not filing paperwork last year to the Social Security Administration regarding its employees’ 2006 W-2s.

May 19: Allison says the year-end deficit for the 2007-08 budget year could reach $7 million. Ballowe recommends raising the tax rate to 8.34 mills, including an unchanging 0.34 mills for bond repayments, from 6.96 mills. He also recommends $4.5 million in cuts to begin covering the deficit and balance the 2008-09 budget.

May 19: Ballowe sends a letter to school board members seeking advance notice by the school board of any executive session dealing with his performance and to have "paid legal representation" available at that time. He also says that the board held executive sessions on Feb. 19 and April 21 in violation of the Open Meetings Act.

May 29: Allison says in a May 29 e-mail to Ballowe and board members that she can’t find where federal program expenses, including for school nutrition, are in the current year’s budget. She said the district projected $2.9 million in revenues for the school nutrition program in this year’s budget, but the only matching expenses she can find is $1.1 million in salaries and benefits, leaving at least $1.8 million unaccounted for.

June 2: The city school board discusses Ballowe’s May 19 letter while keeping its contents secret in a public meeting, even as audience members probe for information. It votes to refer the letter to its lawyer, Phil Hartley of Gainesville.

June 3: The Times obtains the Ballowe letter and sends an Open Record Act request for Ballowe’s contract and minutes from the Feb. 19 and April 21 meetings.

June 4: The Times files an Open Record Act request for financial data, including budgets, spanning the past three years.

Monday-Tuesday: The school board is set to discuss the 2008-09 budget in meetings set for noon each day at the central offices at 508 Oak St.

June 16: The deadline imposed by Ballowe on his request for paid legal representation. In that memo, he also asked for a plan to correct other areas of concern. He alleges the board has placed him "in the position of correcting individual board members when actions have been inappropriate, unethical or illegal."

June 28: The board has scheduled an eight-hour retreat, including four hours set aside for Ballowe’s annual evaluation. Ballowe is in the first year of a three-year contract that began July 1, 2007 and ends June 30, 2010.

June 30: The district’s deadline to approve a budget for fiscal 2008-09.

July 1: The 2008-09 fiscal year begins.



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