NATCHEZ — By this time next year, the Natchez-Adams County School District could be in desperate need of money and have nowhere easy from which to obtain it.

As a result, the district must begin looking at extensive cuts to personnel and a better budgeting plan, school board members said Thursday.

The board met for a special budget report that included sometimes shocking projections about the district’s savings.

Since 2009, the district has borrowed money from its 16th section interest fund to alleviate cash flow problems due to state cuts to education and unforeseen costs, Business Manager Margaret Parson told the board during a budget meeting Thursday at McLaurin School.

Although the district could have paid some of that money back, it has not, Parson said.

“We would have just had to turn around and borrow it again,” she said.

With unforeseen costs this year such as repairs to Morgantown School’s gym floor and extra transportation costs, Parson said the district will need to again borrow money from its 16th section fund.

Parson informed the board in November that the district’s transportation budget is going to cost $164,000 more than the budget because an extra bus and 10 monitors were added. The extra bus was added because some students who live near the Franklin County line were not getting home until 7:30 p.m. or 8 p.m.

While the principal amount is not expendable, 16th section earnings from hunting leases and timber sales are expendable and are added to the interest.

In 1803, Congress made provision for the reservation of Section 16 in each township for the support of public schools. Sixteenth section land is also known as public school trust land.

The district, Parson said, had budgeted that they would need $166,000 in 16th section funds this fiscal year, which began July 1.

“What I’m telling you today is that we’re going to need $700,000,” she said.

That is taking into the account the entire year, Parson said. The budget should be balanced at the end of the year, Parson said, but the district will not be able to pay back its 16th section funds.

Additionally, Parson said, the fund will be depleted next year.

“I am hoping we will have enough to pay the debt service (next year, which is) $430,000,” she said.

Board member Thelma Newsome asked Parson what she thought the district could do to alleviate the district’s financial problems.

“To me, it doesn’t make sense for us to keep going deeper and deeper, and where are we going when this 16th section runs out?” Newsome said. “Something is going to have to be done, and where do we go at that time?”

“There’s nowhere to go,” Parson responded.

Parson said the district could take out a tax-anticipation loan like the City of Natchez does to make it through lean months until tax revenue can be collected. The city’s tax-anticipation loan must be paid back by March during the same fiscal year.

At some point, Newsome said, the district will have to “face the music.”

“I’m just wondering why it’s taken us so long to do that,” she asked.

Parson said cuts and budget adjustments have been made in the past few years as a response to the decrease in state funding. For example, she said, cutting substitute teachers is saving the district $150,000 to $170,000 a year.

The district, Parson said, was slower than it should have been on adjusting its budget at funding cuts.

“We did not make adjustments as quickly as we should have,” Parson said.

Parson said since 2001, $7.3 million has been transferred out of 16th section interest funds.

“And we are still out of money right now,” she said.

Newsome said, in her opinion, personnel is the most obvious place that cuts have to be made.

“And it should start at the top,” she said.

Personnel accounts for 75-85 percent of the district’s budget, Newsome said.

“If we don’t cut the budget, I don’t see how we’re going to be able to continue,” she said.

Board President Wayne Barnett said the financial woes would not be easily fixed. Barnett said he did not believe the community would support a tax increase.

“I think the community is not able and probably not willing to support us any more than they already are,” he said.

The budgeting philosophy of the district may need to change, Superintendent Frederick Hill and board members agreed.

Parson said the district’s budgeting process has been to add up its expenses and then figure out from where the money was going to come.

Hill said the district should prioritize the needs of the students, cut what is unnecessary and then figure costs.

The budget, he said, should be built around the needs of the students and not the teachers, he added.

Newsome agreed and said that instead of scheduling students around how many teachers the district has, the board should plan for teachers based on how many students it has.

Newsome added that the district has seen a decrease in enrollment every year in the past few years, except the current one. She said, however, she does not recall eliminating positions when enrollment decreased.

“We’ve backed ourselves into a corner,” she said.

The student-teacher ratio is a complicated problem, Hill said, because the district already has teachers who teach overcrowded classes. If the district is out of compliance with enrollment standards, Hill said, it jeopardizes the district’s accreditation and therefore its funding as well.

The board and Hill agreed at the end of the budget meeting that next fiscal year’s budget needs to be built around a worst-case scenario and cuts made accordingly.

In other news:

-The board voted to decline Waste Management’s two-year contract proposal and asked the company if it would consider a one-year contract.

The two-year contract annual price is approximately $89,000, an approximately $40,000 savings from the district’s previous contract with the company.

Board member Tim Blalock said he did not believe it was a good idea for the district to lock itself into a two-year contract.

-The board voted to have its attorney draft a resolution to present to the Natchez Board of Aldermen and Adams County Board of Supervisors requesting that the school district receive gaming revenues.

Barnett said the district does not receive any revenue from the Isle of Capri and will not receive any from Magnolia Bluffs Casino.

Gaming was approved in Adams County, Barnett said, under the premise that it would benefit the children of the area.

“The reason I wanted this on the agenda is because I want the community to realize that we get no gaming revenue,” he said.