Dr. Price outlines four budget options and defends 4% payroll allowance as realistic tool

Superintendent Dr. Price told the Lexington County School District One Board of Trustees at a May 8 workshop that the administration built the 2025'26 payroll on a 96% fill rate, using a 4% payroll allowance and $11 million from fund balance to help balance the budget without raising millage.

"The difference is $9,833 in a payroll budget of more than $350 million," Dr. Price said, citing an estimated actual payroll of $353,811,399 versus a budgeted $353,821,232 and arguing the close variance showed the allowance "worked as intended." He added, "It was not hidden money. It was a budget tool used upfront to reduce projected payroll from 100% to 96%."

Dr. Price outlined several areas where actual or projected expenses exceeded prior estimates: contracted special-education services (about $2.2 million over budget), substitutes (an added $900,000 since first reading driven by higher long-term substitute use and a substantially improved fill rate after contracting for substitute services), repairs and maintenance tied to a new HVAC contract, and utilities (an added $1.5 million because electric and water costs rose across the district).

To balance the proposed 2026'27 budget, the administration presented four illustrative options that trustees will consider at second reading: Option 1 would cover the gap with a millage increase (presented as 46 mills and no use of fund balance); Option 3 would use roughly $19.7 million in fund balance with no millage increase; and Options 2A and 2B are hybrids (2A: 32 mills + $6M in fund balance; 2B: 14.2 mills + $13.6M in fund balance). Dr. Price cautioned that relying on fund balance to close the full gap would likely force deeper cuts the following year because it would deplete reserves.

Board members pressed administration staff for more detailed "actuals" showing the 2025'26 approved budget, year'to'date actual spending (a specific cutoff date was requested), and the 2026'27 proposed budget so trustees can reconcile pooled positions and where overages appear on account-level detail. One trustee asked how the payroll allowance and pooled-position overages interacted; Dr. Price and staff said the allowance is a net calculation across thousands of payroll-coded lines and that overages in one pool were offset by underuse elsewhere (for example, unpaid leave or vacancies) in the current year.

Trustees also sought clarification about a transfer to the food-service fund tied to fringe-benefit offsets. Dr. Price said the transfer arises from a proviso calculation that nets to a presentable amount (he referenced about $3.3 million gross transfers before indirect-cost offsets) and pledged to provide precise wording and supporting documents between workshop and second reading.

On substitutes, staff said the district's substitute fill rate rose from roughly 69% to about 86% after contracting with an outside provider, improving classroom coverage but increasing substitute expenditures because the district now secures more fill days than before.

Board members requested the administration provide: (1) a reconciled document showing approved 2025'26 budget, the most recent available actuals by a specified date, and the 2026'27 proposed budget; (2) a clear breakdown of the utility increase (electric vs. water and magnitude of year'over'year changes); (3) documentation on the food-service transfer proviso wording; and (4) ties between requested recurring expenditures and strategic-plan goals/KPIs where available. Dr. Price said the academic-outcome KPI data will be finalized after end-of-year assessments and that staff will return with requested line-item clarifications before second reading.

The workshop included two procedural motions: approval of the meeting agenda early in the session and a motion to adjourn at the close of the workshop so trustees could attend the district's special-education graduation. Both motions carried with voice votes.