School’s 5-year forecast in red
- Published: October 28, 2010
The current school district budget picture, as presented by district Treasurer Dawn Weller at the school board’s Oct. 14 meeting, shows that expenditures are increasing at a greater rate than revenues, and the local district will begin running a negative cash balance at the beginning of the 2013 school year.
The district’s budget has been a major point of discussion for the school board for the past two years, due to uncertain state funding and decreased tax revenue related to the recession. District revenue has been declining since 2007, and last year was the start of a projected trend in which the district will begin spending more money than it brings in. For the next three years the district will make up the difference with its current cash reserves, but by 2013 the district projects that it will be $1,191,911 in the red, Weller said during a presentation on the five-year budget projections.
“That’s an average of $500,000 a year that we’re bleeding, which is about 10 percent of the overall operating budget,” board member Richard Lapedes said during the meeting.
Both the treasurer and board members agreed that programmatic cuts and revenue increases should be made in order to improve the financial forecast. Board President Sean Creighton encouraged board members toward having “a serious conversation about ways to increase revenue,” and Vice-President Benji Maruyama also encouraged research and discussion about “solutions outside the traditional budgeting models.”
Lapedes urged the district to look for ways to “revise the way we deliver the program” by “radically altering the cost of labor to deliver our services,” like other businesses and industries have done to weather the economic slump.
Salaries and fringe benefits for district employees currently use 89 percent of the district’s total revenue, with salaries about 66 percent and benefits about 23 percent. Over the next five years, the two expenses are expected to increase until 2014, when they could account for 98 percent of the district’s revenue, according to Weller’s calculations. Good fiscal practice would put the salaries and benefits between 80–85 percent of total revenue, Weller said. Since 2004, salaries and benefits have averaged 82 percent of revenues, but beginning last year, the number rose to over 85 percent.
Salaries automatically rise 1.9 percent each year due to step increases, and every 1 percent of additional negotiated increases above that level costs the district $75,000, according to Lapedes. The district budgeted one small cost reduction in the average of about three retirement-age teachers who will likely retire within the next five years, to be replaced by teachers at a lower rate of pay. But a more constant expenditure is the 14 percent of wages the district is required to contribute to the State Teachers Retirement and the School Employees Retirement systems, which will likely increase over the next few years, Weller said. Employee health, dental, vision and life insurances have averaged an 11 percent yearly increase.
The five-year forecast also accounts for the expected 5 percent increase in the cost of purchased services, which include utilities, property insurance, maintenance contracts and facility maintenance. -Materials and textbooks are budgeted with a 2 percent increase, and $50,000 in annual capital outlays are budgeted with a 10 percent increase every other year, which could be reduced if the district froze equipment purchases for the next several years, Weller said.
Weller also presented an updated five-year forecast which accounted for changes made over the summer to reduce some salaries, salaried positions and benefits. But due to decreased real estate and personal property tax revenues, the negative budget outcome remains virtually unchanged, she said. Weller calculated property tax increases based on a 9 percent increase in property valuations over five years, and she assumed flat contributions from the state, she said.
“Even with the projected ending cash balance being better by $826,475, the deficit spending is nearly the same [in both scenarios],” Weller noted in the budget forecast.
In other school board business:
• The board sanctioned a proposal to unite Mills Lawn with YS Kids Playhouse toward an all-school production of the musical The Jungle Book this year. YSKP representative Lisa Hunt presented the proposal for a Yellow Springs Endowment for Education, or YSEE, grant that rolled the production into an all-school arts and technology program centered around the show.
YSKP proposes using its director John Fleming to produce the show with original music. In addition, students would engage in the classroom to learn about filmmaking and broadcasting by documenting the making of the production as well as publicizing it. They would also be involved on the curricular level in conceptual and problem-solving elements of a show, including designing and making costumes and sets.
YSKP has received a $8,100 grant from the Ohio Arts Council, and the money from YSEE would be a matching grant to cover other project costs largely related to the production of the musical. The schools would not be asked to contribute more than for a normal school musical production, she said.
“This is an excellent example of using community and school resources to increase the value of education for kids,” Hunt said.
The school community is committed and excited about the all-school event, according to Mills Lawn Principal Matt Housh.
• In the superintendent’s report, Superintendent Mario Basora apprised the board of the administration’s efforts to address the issue of bullying by evaluating policy guidelines, giving feedback to the original complainant and naming a point person for teachers, parents and students at McKinney and the high school. The school also plans to continue helping students to recognize what bullying is and improve communication skills with each other through positive recognition of good behavior.
• The consultant selection committee for the Class of 2020 strategic planning initiative decided not to choose one final consultant, according to Creighton, selection committee co-chair. The committee will break the initiative into two components: 1) expansive thinking and 2) community interaction and plan development. The group will contract with Knowledge Works to lead the expansive thinking phase and work with another consultant or group to guide the community interaction and plan development, Creighton said. Knowledge Works has expertise in best practices and leading brainstorming sessions, but needs more experience in strategic planning, he said.
In addition, local resident Fred Bartenstein has volunteered to help design a strategic plan process, and local parent Jay Rothman has offered to donate the data collection instruments he has designed to help with the process, Creighton said.
The cost of creating a strategic plan is estimated to be around $20,000.
Board member Angela Wright cautioned the board against spending on anything nonessential, given the extremely tight budget.
“I would not make this investment now because of the financial uncertainty,” she said.
• After an executive session at the end of the meeting, the board approved a five-day disciplinary suspension of high school chemistry teacher Michelle Edwards earlier in the month. Edwards was absent from school for a total of two and a half weeks, of which five days were unpaid, according to Basora. Edwards returned to school on Oct. 18.
• The board agreed to cancel the second meeting of the month.