Asheville City Schools reviews draft interlocal funding formula with county, seeks clarity on tax pots and protections

Asheville City Schools Board members spent the bulk of their Dec. 1 meeting reviewing a draft interlocal funding agreement that would change how the district receives county operational funding, moving from an annually negotiated dollar amount to a percentage-based share.

The draft on the table ties the district’s allocation to a defined slice of county tax revenue. Under the version discussed, the county would calculate the district’s portion using the sum of 12 months of property and sales tax collections preceding March 15, then apply a percentage (the working number discussed by staff was 37.76%) and the district would receive its 15% operational share of that resulting amount on a monthly basis.

Maggie, speaking for the district’s administration, said the percentage model would provide predictability and allow the district to “get growth” when the county’s collections rise, instead of receiving a fixed dollar amount chosen prospectively. She said the proposal includes automatic adjustments if enrollment shifts (the draft ties a 50-basis-point change in the percentage to a 2% enrollment change) and emergency-language to permit discussions if extraordinary events affect revenues.

Board members pressed staff and county negotiators on the treatment of revenues that are statutorily earmarked for capital and debt service. Several members read the draft as both including and excluding proceeds tied to Articles 39, 40 and 42; staff and legal counsel (Anna) said the working intent is that statutory disbursements for capital stay separate and would not be part of the percentage calculation, but the language needs to be clarified.

Sarah, who introduced the topic to the board, reviewed recent history: county budget actions and an episode this year in which Article 39 receipts were reallocated for one year. She said the interlocal approach is intended to reduce the last-minute budget uncertainty that has made district planning difficult.

Several board members said the agreement could reduce an avenue for visible board-level advocacy at county budget hearings, and urged the district to protect tools for state- and county-level advocacy even if a formula is adopted. Board members also asked administrators for follow-up math on how declines or increases in enrollment would translate into actual dollars and asked finance staff (Heidi and county counterpart Tina) to produce clearer examples.

Anna, the board’s counsel, told members the interlocal would be a legally binding contract that each board – Asheville City Schools, Buncombe County Schools and the Buncombe County Commission – would need to approve individually. She said termination mechanics and dispute-resolution language would be part of the final draft.

Maggie and other staff said work will continue with county negotiators, finance officers and counsel to tighten the language and return to the boards with a clarified draft. The board did not vote on the interlocal at this meeting; members were told more public comment opportunities and further review will follow before any formal approval is requested.

Next steps: staff will redline the draft to make the treatment of Articles 39/40/42 explicit, provide worked numerical examples of enrollment-triggered adjustments, and schedule further public comment and additional briefings before any vote.