Forsyth County approves nearly $12 million in transfers and budget adjustments to help schools, sets strict repayment and reporting conditions

Forsyth County commissioners on Aug. 14 approved a package of funding moves and budget changes worth roughly $12.1 million intended to help Winston‑Salem Forsyth County Schools (WSFCS) repay outstanding debts and simplify payments for county‑provided services.

Deputy Chief Financial Officer Lee Plunkett told commissioners the board was being asked to (1) reallocate $3.87 million of unspent county general‑fund transfers in the county’s education capital project ordinance back to the general fund and then appropriate that as current expense for the schools, (2) allow $4.7 million of investment earnings from the county’s 2023 general obligation bond proceeds to be used to pay debt service interest so that the property tax revenue originally appropriated for that interest could be repurposed as current expense, and (3) reduce this year’s county appropriation to the schools by $4,600,010.20 so the county will pay directly for school resource officers and public health nursing services rather than routing the money through the district.

Plunkett said the combined result of the two transfers being considered for debt repayment would be $8,568,000, and described mechanics for each plan. He said the school share of the 2023 bond interest in question is $4.7 million and that about $11.8 million in investment earnings exists in the education CPO, with roughly $5 million available after setting aside amounts for the county’s arbitrage rebate liability.

The board placed strict conditions on the use of funds. County counsel read identical paragraphs that were incorporated into the board’s actions: “Winston Salem Forsyth County Schools will use the entire amount of such funding to repay part of its debt to the North Carolina Department of Public Instruction with payment occurring within 1 week of receipt of the funds from the county. Provided, however, that if there are legal requirements to provide a portion of this county appropriation to other parties, WSFCS may do so. The interim superintendent shall provide the county manager with evidence of such payment to NCDPI and to any other party within 24 hours. If Winston Salem Forsyth County Schools uses such funds in any other manner, the county may offset future payments to WSFCS to recoup the amount of any unauthorized spending.”

Public commenters who addressed the board during the allotted public‑comment period urged both caution and action. Jenny Easter, president of Forsyth County Association of Educators, urged the board to “provide these funds today to help erase debt that has accrued on this district,” saying the vote is “an opportunity to protect our schools, our staff, and our community.” Lisa Sykes, a longtime voter and tutor, said earlier that “the system’s outstanding debts and immediate needs are clear” and supported providing the requested funds under the interim superintendent’s leadership. Several other speakers, including Michelle Jordan, an educator, said the district had spent money on student needs and appealed for community support: “It was spent on student needs,” Jordan said.

Other commenters emphasized accountability. Alan Daniel, a resident, said he supported county help but conditioned it on accountability measures: “I support it on the condition that the entire board of education resign their seats before the money transfers,” he said during public comment.

Board action and votes - Item 4: The board authorized a transfer to appropriate available capital maintenance general‑fund dollars to the schools for current expense and debt repayment. Motion passed 5–2. The approved motion authorized the county to transfer $3,800,000 (motion language) to assist in paying down outstanding debts in the form described in the agenda and read into the record by county counsel.

- Item 5: After an initial motion to postpone, the board approved a proposal to use $4,700,000 of bond investment earnings to pay debt service interest (thereby freeing property tax revenue to be used as current expense). The approval included a condition that the Winston‑Salem Forsyth County Board of Education provide a formal letter committing that the next capital project the system undertakes will be Ashley Elementary School, and incorporated the clawback and 24‑hour evidence requirement read by counsel. The vote passed 4–3.

- Item 6: The board approved an amendment to the fiscal year 2026 budget to reduce the appropriation to WSFCS by $4,600,010.20 for school resource officers and public health nursing services; the county will continue to provide those services directly. Commissioners approved the item unanimously.

County and school officials also discussed an administrative appeal to the State Board of Education seeking relief from a 1% interest penalty the district faces. Interim Superintendent Katie Moore said the appeal will be submitted to the State Board of Education and is expected to be reviewed by a panel and then the full board in early September; Moore said the penalty takes effect Sept. 20.

Several commissioners expressed concern about precedent and oversight. One commissioner objected to the county effectively paying a state obligation and said repeated unconditional payments would create expectations the county cannot sustain. Other commissioners urged urgency and described partial payments as a demonstration of good faith to the State Board of Education.

The board’s votes included a mix of support for providing short‑term relief while seeking written assurances, and dissent based on state versus county responsibility. The board also instructed staff to withhold future payments or offset future appropriations if the district used funds for unauthorized purposes, per the read clause.

What happens next WSFCS is to make payments to the North Carolina Department of Public Instruction within one week of receiving county funds and give the county manager evidence within 24 hours, per the approved language. The district will pursue an appeal with the State Board of Education to waive or mitigate the 1% interest penalty that takes effect Sept. 20; the State Board will consider that appeal at its September meeting. Commissioners said they may seek additional written assurances from the school board about capital‑project timing and will continue discussing longer‑term accountability and budget controls.