Fayette County board approves up to $95 million short-term loan, adopts tentative budget amid community outcry

The Fayette County Board of Education on May 27 approved a tax revenue anticipation note authorizing up to $95 million in short-term borrowing to shore up district cash flow and adopted a tentative 2026–27 budget after extended public comment dominated by allegations of financial mismanagement.

Board members voted unanimously to approve the loan after Interim Chief Financial Officer Kina Co said the district received multiple competitive proposals and narrowed its request from $110 million to $95 million. "We are drawing and taking all the money at one time," Co told the board, saying unused funds would be invested and drawn down as needed.

The vote followed hours of public comment in which dozens of speakers criticized recent staff reductions, questioned decisions that increased central-office compensation in recent years, and called for greater transparency. "We were told positions were cut because they did not directly impact students — that's simply not true for our department," said Dr. S Adams, a parent who described training and supports her unit provided and pressed the board for numbers underlying staffing cuts.

Board members said approving the note was a reluctant but necessary step to meet payroll and stabilize operations. "It's our responsibility to move forward in the right path," Chair Tyler Murphy said before casting his vote in favor. Several members said they had serious reservations but accepted that short-term borrowing was needed.

Financial context: staff told the board that restatement and reconciliation work on FY2025 uncovered material overstatements in several revenue lines — including property tax and the district''s OOLT tax — and in grant accounting. Acting finance director Amy Smith said the restatement left the district with a $1.3 million beginning balance on the April report after adjustments and that general- and special-revenue reconciliations were nearing completion.

Budget and personnel votes: the board also adopted the district''s 2026–27 salary schedules, addressing technical changes tied to state certification dating that affect how supplements and rank changes are prorated. Members asked for a crosswalk showing which job titles are on which work calendars to understand where future work-day reductions might be possible without illegal cuts to pay. The board then adopted the tentative budget, which meets the state-required 2% minimum contingency but not the board''s informal 6% target. "I would like very much for the working budget to not be balanced on the sale of property," one member said.

Pilot agreements tabled: after questions about timing and equity related to proposed Related Affordable pilot agreements for Midland Station and Rose Tower, the board withdrew a motion to approve and unanimously voted to table those items for a future meeting until more fiscal detail and community impacts can be provided.

What happens next: staff said they will continue restatement and reconciliation work, provide monthly updates and more detailed crosswalks of positions, calendars and administrative additives, and return with a working budget in the summer that incorporates findings from internal and external reviews. The district also plans to report monthly on actual drawdowns of the tax revenue anticipation note.

Votes at a glance
- Tax revenue anticipation note (up to $95 million): motion passed 5-0.
- Table pilot agreements K1/K2 (Midland Station, Rose Tower): motion passed 5-0 to table.
- Adopt 2026–27 salary schedules: motion passed 5-0.
- Adopt 2026–27 tentative budget: motion passed 5-0.

The board said it will bring additional documentation and comparative monthly reporting to future meetings so trustees and the public can track whether expenditures and revenue trends match expectations.