For the first time in four years, Lowndes County School District will not borrow money to make December or January payroll.

Cost cuts, deferred facility maintenance and reimbursements from federal COVID-19 relief funds have helped build the district’s general fund balance to nearly $14 million at the end of the calendar year, according to both Superintendent Sam Allison and Business Manager Sayonia Garvin.

“This time last year, it was zero,” Allison said of the fund balance. “… This is a step in the right direction.”

Ad valorem, or property, taxes account for a significant portion of the school district’s funding and is its primary source for local money. The bulk of those taxes are collected in February or March.

Bonded debt and large building projects drove down LCSD’s general fund balance from a high of $17 million in 2014. By 2018, the fund was empty in December, throwing the district into a cycle over three consecutive years of borrowing millions in tax-anticipation notes to make December and January payroll. LCSD repaid the principal and interest from the TANs with ad valorem taxes collected the following spring. In 2020 alone, the district issued $3.8 million in TANs, Garvin said.

Allison, since he began his tenure as superintendent in January 2020, has focused on building a healthy enough fund balance to break that cycle. A key piece in rebuilding the balance has been cutting costs and delaying maintenance projects, he said.

“We think (our fund balance) is sustainable outside of the unknown,” Allison said Friday. “On the other hand, there are some things that need done that haven’t been done.”

In the spring, Allison hopes to begin attacking some of those deferred projects, including new paint at several campuses and an estimated $500,000 for parking lot paving at New Hope.

He also wants to start removing carpet from district facilities and upgrade HVAC systems, projects Allison estimated at $1 million that qualify for federal COVID-19 relief reimbursement.

“We want our facilities to match where we want to be as a district overall,” Allison said.

Much of the federal dollars the district has received were reimbursements for things it would not have purchased if not for COVID-19, Allison said — such as extra cleaning supplies and personal protection equipment.

Some of the federal money was used to accommodate smaller class sizes, as well as through a program that paid 75 percent of a $4 million purchase to replace outdated technology devices for students districtwide. Otherwise, Allison said, the district would have paid the whole amount over four years to Apple.

Also included in the $14 million fund balance is $3 million in a shortfall note the district sought after the Lowndes County Board of Supervisors did not approve LCSD’s full funding request for 2020-21. The district that year asked for a significant increase in ad valorem funding, which supervisors must approve, based on added value to the county’s assessed tax base from 10-year incentives expiring at several local industries.

Supervisors denied the funding request, citing concerns over its legality, and the issue is being litigated. The county did approve the millage necessary for the district to repay the shortfall note over three years. Still, Allison said the district likely won’t spend it until the legal matter is settled.

Speaking to The Dispatch, school board president Robert Barksdale complimented both Allison and Garvin for helping restore the district to firmer financial footing.

“We’re going the direction we need to go,” he said. “It’s a positive thing that we’re not going to have to do the TAN note this year.”

Zack Plair is the managing editor for The Dispatch.