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Supt.’s severance payment will use up school system’s fund balance

In voting 5-2 to accept the resignation of Alamance-Burlington superintendent Dr. Dain Butler at a special-called meeting on Monday, school board members also agreed to pay him $102,038 in severance by March 31.

That payment will deplete the remaining $102,038 that the school system had in unrestricted fund balance (i.e., rainy-day savings)when the previous fiscal year ended on June 30, 2023, based on the results from the latest financial audit presented to the school board on November 14 of last year.

State law requires the payment of any severance to Butler to come exclusively from unrestricted fund balance within the county-funded portion of the school system’s budget.

School board members Ryan Bowden and Seneca Rogers said Monday that, while they supported the resignation agreement, but voted against a motion to accept it, saying they disagreed with the severance payment, given the financial circumstances ABSS is facing.

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Asked whether it is appropriate to use all of the remaining $102,038 in unrestricted fund balance (i.e., rainy-day savings) – given the dire warnings that ABSS had recently issued about its fund balance – to pay Butler $102,038 in severance, school board chairman Sandy Ellington-Graves told the newspaper that “the entire board had concerns” in finding a way to move forward with new leadership “with minimal financial impact.”

“There was unanimous support from the board to negotiate a resignation agreement to accomplish a quick transition in leadership with minimal financial impact,” Ellington-Graves said Wednesday in an interview with The Alamance News.  “As an individual board member, it was my goal in the midst of a financial crisis to do what I felt was best for this district and that was to part ways quickly and amicably, with minimal financial impact. Contractually, he could have gotten $327,600 [based on the amount of time left on his contract, which was good through June 30, 2027].

“Based on the options that were available to this board, with the loss of a deputy superintendent and a chief financial officer, and now with a search for an interim and permanent superintendent, I did what I thought was best to move this district forward,” Ellington-Graves explained in the interview.  “Any other options taken by this board, in my opinion, would have created further disruption; it’s time to put our focus back on the children, where it belongs.”

Later this year, Butler will also be eligible to receive a second payment of $116,362, if it is available from unrestricted fund balance after the current fiscal year ends on June 30, according to the terms of his resignation agreement between Butler and the school board.

The terms of the second payment to Butler contain two caveats: an outside auditor and the school system’s finance officer must determine that sufficient funds are available within the unrestricted fund balance; and the funding source must not be prohibited by state law from being used for this purpose.  That second payment payment also “shall not exceed” 50 percent of the total amount of available unrestricted fund balance, according to the resignation agreement.

He will not receive a second payment if sufficient funds are not available, according to the agreement.  He has also agreed not to sue the board if ABSS is unable to pay the $116,362.

A state law allows North Carolina school boards to terminate a superintendent’s contract prior to its scheduled expiration, but the same law places several conditions on how severance may be funded.

That law requires the following conditions to be met:

  • No state funds may be used to pay severance;
  • No local funds may be used that have been appropriated for teachers, textbooks, classroom materials, supplies, and/or equipment;
  • The board makes public the funds that are to be transferred or used for this purpose and notifies the State Board of Education of its intent;
  • No funds acquired from donations or fundraising are used for this purpose, except for funds raised exclusively for this reason or for funds donated by private for-profit corporations.

School board members and Butler had held a press conference at Cummings High School on Thursday, November 30, 2023, to highlight what they called an “unprecedented financial crisis facing ABSS” and asked the community to stand with the board to “demand greater investment in public education” by Alamance County’s commissioners.

Butler had said during the November 30 press conference that ABSS was looking at the possibility of requiring staff to take on additional job duties as employees resign or retire and/or eliminating programs in order to replenish its fund balance.

On February 2, Butler announced his plan for a reduction-in-force, much of which would’ve taken effect at the end of last month.

Two weeks ago, he backtracked on that plan, saying ABSS had found federal stimulus funding (initially $4.6 million, later revised to $2.7 million) to cover those personnel costs through June 30 of this year and after the county commissioners allocated $250,000 in emergency funding on February 5 to forestall a potential RIF, which Butler later announced his intention to return.

“We are hopeful that we will be able to return the $250,000 to the commissioners once we are able to confirm our financial stability for the remainder of the year,” Ellington-Graves told the newspaper Wednesday.  “We just want confirmation before we do that.”

Asked what options would be available to ABSS if there’s a financial emergency between now and the end of June, given the depletion of fund balance, the chairman said the board would work to identify solutions, hopefully without having to ask the commissioners for a lifeline.

“We are hopeful that our work with [the state Department of Public Instruction] in reallocating [the federal stimulus funding] will help us to restore the financial stability,” Ellington-Graves said.  “I am told that, with the reallocation, we should be financially solvent through the end of the fiscal year.  There’s a there’s a pretty good likelihood that we’ll be able to return that $250,000 to the commissioners – our intent is to return that to them.”

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