There have been disputes over how much the Campbell County school board should keep in its fund balance to be fiscally sound, but how much is the county legally required to keep there?
School board chairman Jeffrey Miller said at a budget committee meeting on Monday that there was a dispute over how much money the school system needed to keep in its fund balance.
“I’m striving to get to that point on what’s the right number because knowing what our fund balance has to be is very important here,” Miller said. “There’s all kinds of speculation of what it should be, but we need to know what it needs to be by law — and then you can move toward trying to find a good solution.”
According to state law, that number is 3% of the current fiscal year’s operating budget.
“Any fund balance remaining unexpended at the end of a fiscal year in the general fund of the local public education system shall be carried forward into the subsequent fiscal year,” per state law. “The fund balance shall be available to offset shortfalls of budgeted revenues or, subject to § 49-2-301(b)(1)(U), shall be available to meet unforeseen increases in operating expenses. Any accumulated fund balance in excess of three% (3%) of the budgeted annual operating expenses for the current fiscal year may be budgeted and expended for any education purposes, but must be recommended by the board of education prior to appropriation by the local legislative body.”
So that number would be 3% of $55 million, or roughly $1.65 million, that the county needs to keep in its fund balance, per state law.
“The fund balance is about $7.6 million the last time we drew out of it, which was last October,” Miller said.
Miller said school board attorney Dail Cantrell advised him that the figure would be 3% of $55 million.
“There’s a debate back and forth on how much you’re supposed to have in there, 3%, 10%, 7%,” Miller said. “Again, we’re getting a lot of different numbers from a lot of different people on what’s really right, Mr. Marlow has his thinking, and then 3% is what I understand, so 3% of $55 million would be kinda the number that Mr. Cantrell has said to me.”
The Tennessee School Boards Association and the County Technical Assistance Service also cite the 3% figure.
The Tennessee Comptroller of the Treasury’s Tennessee Budget Manual for Local Governments, approved in December 2024 by the funding board for the state, has a recommendation: two months of operating cost.
“Our office recommends local governments adopt a fund balance policy for all fund types and include in its policy a requirement to maintain an unrestricted fund balance of not less than two months of the regular operating revenue or expenditures for operating funds,” per the manual. “Local officials may determine more than two months is appropriate (for example, because of the timing of the receipt of major annual revenue sources and/or the timing of larger expenditures, such as insurance). The nature of each fund will determine the appropriate minimum amount of fund balance that should be maintained.”
According to an email from county budget analyst Richard Terry to Jennifer Fields, dated April 23, Terry writes: “In follow up from our meeting on Monday, it’s my understanding you plan to propose the use of equity to balance the upcoming 2025-26 budget, rather than proposing personnel and/or other recurring cost reductions to balance the budget. Please be advised that it is inappropriate to use fund balance as the funding source for recurring expenditures as BOE Attorney Dail Cantrell advised the Board of Education at their recessed April 10, 2025 meeting. When you determine the recurring cost reductions to be implemented to balance the 2025-2026 school budget, please let me know.”
Miller brought up that another installment of teacher raises would come next year, plus tariffs’ impact on projects, as well as vouchers.
“Mr. Marlow proposed using debt service payments being paid out of fund balance at about $700,000,” Miller said.
Tennessee Department of Education Chief Financial Officer Maryanne Durski wrote an email to several people, including Creekmore, dated May 9.
In the email, Durski writes in part: “The TISA formula does not generate a specific number of positions, nor are positions ‘earned’ through the formula. TISA generates funding for the school district based on the number of students, and each student’s specific characteristics. The funding does not include any specific components or positions. The local school board and district administration are charged with budgeting those funds to best serve the needs of the students. TISA, like the BEP before, is strictly a funding formula, not a spending plan. Neither formula dictates what positions, or how many positions, should be employed. That is the decision of the local school board and the district administration. Budgeting should focus on the needs of the students and what resources should be employed to meet those needs — not on a number of positions.”
School board member Brandon Johnson said on Monday that he refuses to vote for a proposed budget with cuts to Campbell County High School, full stop.
“I will not vote for any budget that is going to continue to take away from our students at Campbell County High School, period,” Johnson said.
Johnson spoke near the end of the Campbell County Board of Education’s Budget & Finance Committee meeting on Monday night.
“Campbell County High School, in so many ways, has been funding this school district,” Johnson said on Monday. “I’m proud to represent Campbell County High School. I just can’t vote for a budget that continues to take away from our students there, period. And at some point, board, we may not like these conversations. But when we look at these schools, that just based on personnel cost alone are running a deficit, we can’t long-term afford these schools. If I were chairman of the budget and finance committee, I would go to each of our schools in the county and say, ‘hey, here’s what your TISA allocation is for your school. The district as a whole, through administrative support, needs 3% of your budget. The other 97%, we need your school to operate within that budget. How does that work?’ And I just don’t know how long-term we can continue to take and take and take and take and take from students, like these students sitting here, to support other students. I want every student to have the same opportunities and access. I want every student to have these great opportunities. These things that we, as a board, promised these students at Campbell County High School, and now this essentially same board is talking about taking those opportunities away. I just don’t think that’s fair, and I won’t vote for any budget that does that. I know I’m probably the one no vote. That’s not atypical, but I just had to get that off my chest. And finally, I want to give a special thanks to Director Fields, who has continuously worked on these budgets and got us different options and has gone above and beyond. So, Director, if nobody else tells you, I want you to know that I appreciate your hard work on this.”
White Oak Elementary is the only school in the district that is running at a deficit based on only personnel cost, and the difference district-wide between personnel cost and TISA funding, $12.7 million, goes toward the district’s operating costs.
Johnson asked to speak near the beginning of the committee meeting on Monday, but BOE budget and finance chair Crystal Creekmore said she wanted people on the committee to speak first.
“Sorry to my constituents,” Johnson said.
However, Creekmore did make an exception for Miller to speak.
“Mr. Miller, since he’s more been involved in this from day one, he’s not on the committee, but I’m going to allow him the right to speak,” Creekmore said.
Toward the end of the meeting, school board member Sharon Ridenour, who is on the committee, yielded her time to Johnson to speak.
“I have zero interest in ever seeing Elk Valley STEM School close,” Johnson said on Tuesday. “Now if the enrollment drops to 12 students, which hopefully will never happen, of course, the board will have to make responsible cuts at that point.”
Johnson said on Tuesday that he was in favor of plans to mitigate areas where deficits occur in terms of different school’s TISA funding.
“Somehow this has got to come in line,” school board member Randy Heatherly said, referring to the differences in numbers for each school when personnel cost is taken out of the TISA funding each school generates. “These numbers have to come in line, and it’s tough. It’s very tough, but somehow they do. And I don’t know what the $12.7 million is, but obviously, we’re spending more than that on these total, combined. Obviously we’re going to have to make a tremendous amount of cuts, but guys, Campbell County High School generates the most money for this system, and it is funded the majority of projects and positions in this county — Campbell County High School. So let’s look at that, and think about it because — and it is and it always has. So making cuts at Campbell County High School, to me, and I know it’s in my district, but that’s not the place to make the cuts, in my opinion. And that’s just one opinion.”
Heatherly is against a plan that would divert the rest of the money initially earmarked for the sports complex at Campbell County High School toward balancing the budget.
“Using any funds that have been appropriated for other projects should not be considered in this, guys,” Heatherly said. “Those funds were committed for projects that we committed to a community. We’ve committed to children, some of which are present here tonight, that we’re going to do this. And I feel like we need to do it, and I feel like we need to see it through. And I’d like to be one that helps see it through. I just feel like that’s not the responsible thing to do to use money that’s been committed to something else for a budget that’s not working. And guys, this is $2.8 million this year.”
Four members of the Campbell County High School softball team were in attendance for Monday’s committee meeting.
“Mr. Heatherly, we’ve discussed the sports complex,” fifth-district school board member Ryne Cummins said. “I’m not against it so much as I feel like it’s luxury spending, and whenever you’re looking at the mission of a board of education, it’s education. Athletics is great, and I support that in my community and in my schools. But I think education is the mission. I think we have to make that a priority.”
Heatherly mentioned in the past how the school board funded the turf-field project at Jellico High School before Cummins came on the board.
“I think Mr. Miller mentioned, this is not going to be $2.8 million next year,” Heatherly said. “This is going to be far more money next year. I’d love to see us be able to come to a solution that I don’t think we can do it in one year, based on what Jennifer’s saying, it’s probably not possible in one year but in two years, because we can’t just plan that we’re going to make these cuts this year. We’ve got another year to think about. There’s going to be more cuts that we’re going to have to make.”
