Roanoke County Schools to seek May 22 approval for one-time employee bonus and $1 million health reserve transfer after state funding boost

Roanoke County School Board staff told members May 12 they will ask the board on May 22 to appropriate a state one-time employee bonus and transfer an additional $1 million into the division’s health insurance reserve after receiving larger-than-expected state funding.

"We have wonderful news from the state. We have a lot more money," Susan Peterson, a school division staff member, told the board as she opened a budget work session.

Peterson said the division’s adopted fiscal 2025 general fund is facing a projected shortfall of $660,855 after the division’s March 31 average daily membership count came in about 80 students below estimates. The staff estimate also shows an estimated payroll lapse of about $5,000,000 and a net remaining payroll lapse of $788,000 (net payroll lapse only), with other exposures including a maximum PTO sick payout exposure of $713,000 and estimated electricity overruns of about $803,000.

Peterson presented two decision points for the board: to appropriate the one-time bonus provided by the state for employees and to approve an additional $1 million transfer into the health insurance reserve. "So if there was agreement, this would go on as one item for May 22," Peterson said, asking the board to decide by May 19 so the items can be scheduled for the May 22 meeting.

A board member (unnamed in the transcript) cautioned that a recently passed state law requiring automated external defibrillators (AEDs) at all sports practices and games is an "unfunded mandate." The division’s lead nurse, Ms. Veil, worked with high school and middle school principals and athletic directors and identified a one-time cost to implement the new requirement of about $69,000 to purchase roughly 46 AED devices, 24 temperature-controlled cabinets and two other cabinets plus signage. Peterson said the cost is a one-time figure and the division expects to handle replacement needs from the nursing budget in future years.

On fiscal 2026, Peterson said state revenue for the division is expected to rise by about $3.3 million, Roanoke County revenue-sharing by $597,284 and the division’s CSA (Comprehensive Services Act) flow-through by $250,000, with corresponding adjustments to expenditures. She also described changes related to dual enrollment: the legislation that followed a JLARC study bars community colleges from charging tuition for a prescribed set of dual-enrollment courses that lead to a universal certificate of general studies; courses outside that list remain subject to tuition (Peterson said some colleges in the Virginia Western service region still charge about $42 per credit hour for those courses).

Peterson outlined staff proposals on compensation: the division built a 1.6% step increase into the current budget and is proposing a 3% scale shift plus a 3% increase for employees at or above the top of the scale. "So all employees should get the 3%. If you're below the top of the scale, you will also get 1.6%. So anyone who is below the top of the scale should get a total of 4.6% this next year," Peterson said. She provided an illustrative example of how the changes would affect the net pay of a sample teacher under specific insurance-plan assumptions.

Other budget items Peterson described included: - An $81,000 ongoing cost for an AI platform for teachers and students that staff say includes data-privacy safeguards and Virginia Data Privacy Act compliance; Peterson said the product will scrub personally identifiable information before external model calls. - Addition of a Student Safe product into the technology replacement plan to support threat and bullying assessments and workflow notifications. - A $50,000 add-back to athletic allotments, which Peterson said would equate to roughly $7,600 per high school and $2,400 per middle school. - A school counselor floater add-back and funding to pilot a student apprentice position in maintenance/operations. - A small reallocation into the general fund for nutrition marketing materials the division believes encourage participation but cannot be purchased from the nutrition fund.

Peterson reported one piece of potential cost relief: Senate Bill 1017, which would have required schools to pay off unpaid meal debt annually, did not pass, reducing projected expenses by about $100,000. She also noted that the governor included approximately $1,514,496 in the division’s grant fund for 2025.

On process, Peterson said staff plan to take the board’s direction to the Roanoke County Board of Supervisors on May 27 and that the county will read the ordinance revision at its June 10 meeting with a second reading scheduled for June 24. Board members discussed whether to place the recommended items on the May 22 consent agenda or as action items; the board generally agreed to place the bonus and the health-insurance transfer on consent and to present the FY2026 budget revision as an action item so staff can highlight the changes publicly.

Board members thanked staff for the work and several noted the state revenue change put the division in a stronger position than some nearby localities. Peterson asked for board decisions by May 19 to allow the items to be collated and included on the May 22 meeting agenda for formal action.

If approved by the board and the county, the division would appropriate the one-time state employee bonus (eligibility per staff: employees who sign their 2025-26 contracts by June 15 plus retirees) with payout tentatively scheduled for June 30, and would transfer the additional $1 million into the health-insurance reserve as recommended by staff.