An independent study of the Troy City Schools system found that the system is at “a critical point in its history.”

“The most pressing issue requiring immediate attention is addressing its continuing deteriorating financial condition,” the study reports.

The study was conducted by the Business Education Alliance of Alabama. The city paid $20,000 for the study and the results were presented first to Mayor Jason Reeves, who shared the report with Superintendent Dr. Lee Hicks, city council members and the members of the Troy City Schools Board of Education.

“I’ve looked over it, and am still digging deeper into it,” Reeves said. “The point of the study was to provide an outside, expert opinion that would start and process and a dialogue among all stakeholders in the community on working toward providing the best education possible for the children in our community.”

Those stakeholders include the children, parents, teachers, business community and citizens throughout Troy. “Everyone in the community, whether you have four kids in the system like I do or don’t have any, is affected by public education,” Reeves said.

“If we’re going to provide the education necessary for us to keep our community growing, to give our kids the best possible education, and to give our workforce competent and capable partners, then we’ve all got to come together to accomplish that.”

The full report is being made public as a PDF on the City of Troy website at www.troyal.gov. It can also be accessed here.

The study provides analysis of recent financial data from the school system – financial statements, revenue sources, expenditures, enrollment, operating reserve, etc. – while also providing potential solutions for the future. In addition to the financial analysis, the report also includes a facilities analysis, best instructional practices and a community survey on the school system.

The most pressing concern according to the study is the financial condition of the system based on revenue sources dwindling while expenses grow or remain constant.

Dr. Lee Hicks, superintendent, said the financial issues highlighted in the report are not news to the school board or city officials, but he hopes the breakdown shows a need for more funding of the system.

“Some of the things they found are things we’ve known about the entire time,” Hicks said. “We appreciate them looking into things and the city taking interest … Hopefully they’ll see the importance of funding the public schools.”

The study shows that the system’s operating reserve has dropped from eight months of operating funds in 2007 to under two months in 2017.

Hicks, who came to the system as superintendent during 2011-2012, said that money was sitting in the reserve while the classrooms did not have technology or other needed amenities.

“The facilities and equipment were outdated; no money had been spent on that over the years already and we were already losing students at that time when I arrived,” Hicks said. “Now we’re putting the dollars into the teachers and the students hands. We reduced administration costs, improved facilities and technology and funded extracurricular activities.”

Rising debt payments are a major concern for the school board. The city recently guaranteed payments on a $2 million line of credit for the system to make up for a shortfall caused in part by the debt service. Hicks said the debt on the books is actually low compared to other school systems, but the rising payments are making the budget tighter.

The study presents “several options including possible reductions in spending as well as increasing revenues, both where may be appropriate, for school system and city leaders to consider utilizing to reverse the system’s negative financial trend.”

One of the key long-term solutions to the problem according to the study is the reversal of declining enrollment, which reduces the revenue the system receives from the state.

The study demonstrates that the average amount of contributions and grants to the system has fallen approximately $2 million.

It points to average daily membership (ADM), the number used to determine state funding each year, as the primary cause for that drop with ADM falling 19 percent from 2007 to 2017.

“Spending has been maintained at a level higher than available revenues by using a portion of the unreserved fund balance each year,” the study reads.

In reviewing the report, Reeves said he was not surprised by the findings regarding financial concerns in the system and the declining enrollment. “I’m fairly familiar with the ADM (enrollment) number as it has come down over the last 15 years,” he said. “And obviously we’re aware of the decreasing reserve fund levels over the last four years and increasing debt service expenses … being aware of those things is what led to the study.”

One option to reduce spending offered in the study is to cut personnel costs either by reducing administration costs or making other staff reductions. Another possibility is refinancing debt to make payments more manageable. The study also suggests a partnership with the city to furnish utilities to the system free of charge would close the gap.

The study also includes proposals to raise local tax revenues. This includes the possibility of raising property taxes by five mills, which would add $40 annually to the tax bill of an owner of an $80,000 home. A 0.5 percent sales tax could also shore the gap the system faces.

Reeves cautioned the answer is not simply to increase funding.

“You can’t throw money at something and expect it to be fixed,” he said. “We’re not at that point. There are a lot of things we’ve got to work on and we’re a long way from the point of considering (a tax increase or other financial incentives from the city). Pushing in that direction right now shortchanges us on things we need to do to be engaged and helping make the schools more successful.”

Those things might include exploring opportunities to grow the career readiness curriculum, finding ways to partner with Troy University, or even seeking available grants to fund programs in the system, Reeves said. “Brock Kelley (CHHS principal) and I have already had some discussions about career readiness programs and he has some excellent ideas,” Reeves said. “This is the type of engagement we need to have.”

Once the system finds more stable financial footing, the study proposes making long-range goals including improving facilities and setting instructional best practices

The most critical facilities need according to the study is the “extensive renovation of the existing Charles Henderson High School at its current site or the construction of a completely new school.”

The study projects a new school would cost at least $40 million with another 12 to 15 percent of that budgeted for “associated soft costs.”

The study also lists recommendations for the school system’s continual improvement in curriculum and instruction including the support of teachers becoming National Board Certified; implementation of Alabama’s voluntary First Class Pre-K program; full engagement with Alabama’s A+ College Ready program at the middle school and high school; the conducting of an audit on the schools’ delivery of mathematics instruction; and the expansion of career-technical education classes and opportunities.

Reeves said as mayor he believes his responsibility is addressing the future growth of the city and the school system. Citing his years of work on economic development, both as a council member and then as mayor, Reeves said education is a crucial component of both quality of life in the community and workforce development.

“For all of our existing businesses to thrive, and for all of the business we recruit and try to bring, we need to have the very best workforce we can,” he said. “And obviously, education is a very big part of that.

“Our state is looking at getting our students college or career ready, and as mayor I feel it is my responsibility to engage with the schools … to get the highest percentage of students possible college and career ready.”

But, he cautioned, doing so will require a community effort. “The schools can’t do this alone, the parents can’t do this alone, the community can’t do this alone … it has to be done together,” Reeves said.

Part of that community involvement in the study comes in the form of a survey included in the report.

With the study in hand, Reeves wants to begin meetings and discussions to identify areas of concern and opportunity, as well as outline strategies for moving forward.

“The city council and school board need to take a good, hard look at the information and get very familiar with it,” he said. “Then, we need to begin prioritizing next steps.”

Reeves said he expects work to begin in earnest after the holidays, citing joint meetings; public forums; and meetings with stakeholders as part of the process.

“We need to get as many people included in the plan moving forward as possible,” he said, adding that it will not be a simple or quick process. “We didn’t get in this position overnight and we’re not going to get out of it overnight. It’s going to take all of us working to do it.”

And despite the concerns raised by the study, Reeves said he also received encouraging feedback from representatives of the Business Education Alliance. “One thing we discussed in depth with the team was the tremendous opportunity here,” he said. “They said things are in place for the schools and community to thrive, and we’ve just all got to work together to make that happen.”

Editor’s note: See the full report online with this story at www.troymessenger.com