School deficit is bigger and came sooner than expected
- Published: June 17, 2010
The Yellow Springs school district budget deficit is bigger and increasing faster than expected, according to Superintendent Tony Armocida at the school board meeting on Thursday, June 10. While the district accumulated an almost $600,000 deficit in this school year, it forecasts a $900,000 deficit for the upcoming year, unless significant cuts in spending are made.
But those spending cuts can’t happen without cooperation from the Yellow Springs Educational Association, the teachers’ union, Armocida said,
“It’s hard to wrap our heads around how this happened so fast,” Armocida said.
The school board will address the financial situation at a special Committee of the Whole meeting Thursday, June 17, in rooms 106–107 at Yellow Springs High School. The public is encouraged to attend the meeting, which will also address the effects of financial constraints on the 2010–2011 Education Plan, the primary planning document of the district.
At the June 10 meeting, board members emphasized the need to take action on the financial shortfall.
“This is too severe,” said Board President Sean Creighton, suggesting that a fiscal task force be formed. “We can’t take the summer off. We have to keep this conversation going every single day.”
Some cuts to the 2010–2011 budget were agreed upon when Armocida, Creighton and board member Richard Lapedes met with teacher union leaders in May, Armocida said. However, those agreed-upon cuts, which mainly cover supplies and professional costs, add up to less than $150,000, with a resulting $769,000 deficit even if the cuts are implemented.
“Unless the [union] contract is renegotiated, you can’t do much more than I’ve given you,” Armocida said. “But it’s not enough.”
In a prepared statement that he read to the board, Lapedes called for an immediate wage freeze for all employees. According to the already-negotiated contract, teachers are in line to receive 3 percent cost of living raises and step increases that average 1.9 percent this year.
In the statement, Lapedes stated that the board is not able to impose a wage freeze without agreement from the union because the contracts “are legal obligations immune from negotiations unless both parties agree. They are time bound with deadlines that dictate when the Board can or cannot make any changes. In short they are work rules that allow everyone, but the taxpayers who pay everybody’s wages, to pay no attention to reality whatever.”
The rising deficit is the result of static revenues and rising expenses, according to District Treasurer Dawn Weller in a presentation to the board. Overall, she said, expenses are rising at a rate of about 4 percent yearly, mainly due to increases in teacher salaries and benefits. Salaries and fringe benefits are projected to cost about 91 percent of total revenues in the 2010–11 school year, she said, and to rise to about 96 percent of revenues in three years. Good fiscal practice states that salaries and fringe benefits cost no more than 85 percent of revenues, she said.
The district suffered a loss of 30 percent of income tax revenue this year, and has been advised to project a similar loss for the upcoming year, Weller said. Property tax collection has been stagnant, due to a decrease in property values and little new construction, she said, and state funding is also decreasing.
Without significant changes, the district will have about a $1 million shortfall in its budget soon, she said.
The district had total revenues of $7,222,650 in 2009–2010, and expenses of $7,802,609 in this year, with a $580,000 deficit, according to a budget summary presented by Weller. In the upcoming school year, the district projects revenues of $7,260,938 and expenses of about $8,180,660, with a deficit of about $920,000.
The district does have a positive ending cash balance, however, due to a budget surplus from a one-time payment by The Antioch Company when it restructured several years ago.
Consequently, the ending cash balance for the district for the current school year is $2,840,448, with a projected ending balance next year of $1,920,726. In 2011–2012, the ending balance is projected to be about $910,000, with the district entering the red in the following 2012–2013 school year.
Lapedes and Creighton volunteered to take part in the fiscal task force, although the board did not take action on establishing the group at the meeting.
Board Vice-President Benji Maruyama suggested charging the new administrative team with developing a plan for addressing the fiscal problems by April 15, 2011, but no official proposal was made at this time.
In other board business:
• Maruyama announced that the school district has been awarded $33,971 to make the school a STEM hub. Maruyama, who wrote the winning grant, said that 10 of the 19 applicants received funding. The money will fund two Yellow Springs teachers this year who will develop a school curriculum for STEM, which stands for science, technology, engineering and math, which will be implemented the following school year.
• The board approved hiring two new district teachers, who will fill empty teaching slots. Jennifer Scavone, a recent graduate of Wilmington College, will teach fourth grade at the school, replacing a previous teacher who moved out of town, and Hilary Riepenhoff will be the new McKinney intervention specialist. She is a Mount Union College and Wright State University graduate who has previously taught in the Bright and Wayne local districts, as well the Emerson Academy in Dayton.
• The board approved renewing the food service contract with Sodexo Food Service, which served local schools for the first time last year. Changing food service suppliers was risky and could have resulted in a loss of about $60,000, but the service has instead almost broken even this year, due to an increase in the number of young people using it, Armocida said.
• The board thanked Yellow Springs High School Principal John Gudgel, who is retiring this year after 30 years with the schools, as a teacher, guidance counselor, interim principal and principal. Next school year, he will serve as the longterm substitute to replace Mills Lawn guidance counselor Lynda Sikes, who is on sabbatical for a year.
In presenting a plaque to Gudgel, Armocida said he has been “honored to be John’s friend and colleague.”
Working in the school system has been “an honor and a privilege,” Gudgel said, noting that the room he will occupy next year in Mills Lawn is the same room where, as a boy growing up, he received speech therapy as a Mills Lawn student.
“I’ve come full circle,” he said.