ORANGE BEACH — After working with the State of Alabama Department of Education, the Orange Beach School System has been cleared of owing millions to the Education Foundation Program.

Monday, Superintendent Randy Wilkes announced the state had worked through the issue and confirmed the school system did not have to pay $4.6 million. The state said the school system owed the money to match the foundation's 10-mill match funding program last year. However, the school system argued that was not true and was based on a system flaw because although they are a small school system, they had higher property values.

Since the state had already budgeted the money and State Superintendent Eric Mackey did not have the authority to change the rules, Mackey said it would take legislation to correct the flaw.

On Tuesday, Wilkes held a press conference concerning the matter.

"It's been almost a year now since we first contacted the State Department of Education, Dr. Eric Mackey, regarding the Foundation program and its application to Orange Beach City Schools (OBCS)," said Wilkes. "Today, we are pleased to announce that we received a correspondence from State Superintendent Dr. Eric Mackey stating that Orange Beach Board of Education does not owe any money to the state in any form as a match for the Foundation."

State Sen. Chris Elliott (R-Josephine) wrote a letter to Mackey in March requesting a correspondence stating the school system did not owe money. He said the state's allocation of the Foundation program funding for FY23 did not require the system to give local tax dollars to the state.

"If the foundation program's allocations are out of balance, the State Department of Education should seek a legislative solution," he said.

Following the letter from Elliott, the FY23 Supplemental Appropriation and the FY 2024 Annual Appropriation Bills were finalized by the Alabama Legislature and signed by Gov. Kay Ivey, clearing OBCS of any dues.

Mackey sent a letter on June 26 stating, "[I]n preparing the FY 2024 budget, the Legislative Fiscal Office made a programmatic change, which we expect to be utilized in future budget cycles to correct any over or underpayment issues related to this matter in successive years."

Orange Beach officials said this has never happened to any other school system and do not foresee it happening again. However, it has been challenging for the leaders of the new school system to deal with the issue during their first year in business. Despite the headaches, Wilkes said the school system is in excellent financial shape because of support from the community and hard work from inside the school system.

"Orange Beach City Schools can continue its focus on providing a safe learning environment, academic excellence, reducing student/teacher ratios, developing character and citizenship and instructing state-of-the-art type facilities," he said.

Orange Beach Mayor Tony Kennon has defended the city and the school system for over a year. He said he knew that no money was owed and the rumors surrounding the controversy were false and damaging. However, some parents still complained at public meetings, saying the school system is doing a disservice to students, especially special education students who will not benefit from more state money if the school system doesn't pay the Education Foundation.

"First, let me say, 'I told you so," Kennon said Tuesday.

Kennon added that the case was very complex, and he appreciated the patience of the school's BOE members and superintendent.

"It means a lot because these folks are so nice and diplomatic and I'm not, to be vindicated from those who question our integrity, transparency and honesty," said Kennon.

He then gave out his cell phone number and said he was taking calls for apologies. He also said he appreciated state officials coming up with a resolution and did not expect an apology from them.

School Board president Randy McKinney said officials could not speak about the issue due to possible legal ramifications.

"We didn't go to litigation, which is one of the reasons we could never talk about it for the last year because any potential litigation, we are not supposed to discuss," said Wilkes. "And so, we looked for a good solution. The good solution came through with good heads prevailing and coming up with something that's reasonable."

School leaders said once again that not paying the money would not hurt students or teachers.

"The majority of our funding does come from our local means," said Wilkes. "Our city has done a terrific job funding education. In our schools, we are very fortunate that we have such a support group with the mayor and the city council and they're going to lack for nothing. We have several capital projects that we're considering. We are reducing class sizes by adding teacher units to our schools. We are just looking forward to a fantastic school year next year. So, there is no shortage. The city has done a great job at making sure that our needs are being met."

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