“Very secure and very sound.”

That’s how Superintendent Lee Hicks described the finances of the Troy City Schools during Monday’s Board of Education Meeting.

‘Just coming back from the state superintendents’ meeting, and seeing where we are compared with the other districts in the state and where they are … we’re very secure and very sound,” Hicks said. “We’re moving in the right direction and are going to be successful all the way around.”

Hicks was referring to the district’s planned capital improvement projects, among others. The district is tapping its $15 million bond issue fund to undertake significant capital improvement projects at all three campuses, including an expansion to accommodate preschool, additional classrooms, and a new entrance at Troy Elementary School; a new cafeteria and multi-purpose center and the repurposes of the existing cafeteria into a media center at Charles Henderson High School; and a major renovation of the classrooms and campus at Charles Henderson Middle School.

In forecasting cash flow and financial expenditures for the expansion, as well as the projected debt service when the bond money is repaid, the district CFO warned in a previous meeting that if all factors stay the same, the district would fully tap its reserve funds by 2020.

The key in that statement lies in understanding what “if all factors stay the same,” said Dr. Judson Edwards, vice chairman of the school board.

Talking after the meeting, Edwards said the district isn’t in danger of going bankrupt or running out of money as it undertakes what he considers much-needed capital improvement projects.

“I’ve had people asking me about the financial conditions of our school system, and the impression is that we’re going to run through our reserves without making any changes in our budget, and that just isn’t the case,” Edwards said.

Instead, he said, Hicks and the school board will take a look at how the local funds are utilized and make adjustments moving forward.

“When you take a look at the expenditures of a local funds (which is where we pull reserves) what you’re going to find, if you compare us to systems across the state, is that we have way too much payroll on our local funds,” Edwards said. “Through the years, that was the way we utilized our local funds, and we’ve allowed our facilities to decline … we need to move some of those payroll units to state funding.”

And, he said, even modest growth in enrollment – say 100 students over the course of five years – can make a sizeable difference in state and federal funding, which will allow more local funds to be utilized for debt service or other needs.

“We passed a policy to keep a minimum of three months operating expenses in reserves at all times. That’s self-imposed,” Edwards said. “We want to make sure people understand that we’re not being careless in this capital improvement project.”

Hicks said plans for the construction at the elementary and high school are underway. Architects and school officials have been meeting and he is hopeful construction will begin on those campuses by Christmas break or shortly thereafter. The elementary expansion should be completed by fall 2012 and the high school project by early 2013. The middle school work is tentatively set to begin in the fall of 2013.

In other business on Monday, the school board:

• Declared Oct. 24-28 Red Ribbon Week.

• Declared Nov. 14-18 American Education Week.

• Approved board member Wally Lowery as the official delegate for the 2011 delegate assembly

• Heard a financial report that indicated utilities were approximately $47,900 for September 2011, down 2 percent from the prior year. Sales tax revenues, which are only estimates, are $220,000 for September 2011. “Our sales tax revenues increased .8 percent over the prior year,” Hicks said.

• Heard reports from Aaron Brown, CHMS principal, and Juan Henderson, TES principal, regarding parent teacher conference day. More than 85 percent of the parents at the middle school participated and 94 percent at the elementary school.