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News
School plan shows how to cut $5.5M : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, IllinoisSchool plan shows how to cut $5.5M
| Savings could be realized by cutting staff, programs, board told
| by Lyle R. Rolfe
| 2/11/2010
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Oswego School District Board members were presented with a plan Monday night on how to make up a $5.5 million deficit in the district's 2010-11 fiscal year budget.
The presentation was made in the Oswego East High School auditorium because of the large audience anticipated for the meeting. An estimated 350 persons attended which included administrators and teachers as well as interested residents.
The cuts, presented by the administration, affect most areas of the district and include cuts in employees as well as programs.
Tim Neubauer, director of finance services, said they were made on the basis of information obtained from the administrative cabinet, building administrators and staff members and parents.
Superintendent Dr. Dan O'Donnell said the administrative staff decided what cuts to make after going through the entire budget line-by-line hitting all departments and expenses, while maintaining salary and benefits to attract a attract and retain qualified staff and faculty.
They also looked at all possible ways to increase their revenue and follow the rules outlined in employee contracts. And there were some things that cannot be changed by state law such as changing education plans for special education students, he said.
Next they tried to establish maximum class sizes across the district and agreed not to affect the core curriculum and to protect the extended curriculum as much as possible.
Officials said they selected a combination of reductions that minimize the impact on students.
The district has two main sources of revenue-local and state.
The primary local sources are primarily property taxes, food service programs and student tuition, he said.
Neubauer explained that property taxes rely primarily on the property values and the Consumer Price Index (CPI) for that year. The CPI numbers are low for this and next year which are not good.
And the Equalized Assessed Valuation (EAV) of property in the district has remained stable for this and last year, but officials are predicting a four percent decline for each of the next two years, he said.
When the EAV drops, the taxes are paid on the lower values which mean less money to all taxing bodies, he noted.
Working against the district is a projected enrollment growth of more 3.5 percent each year and the district's commitment to keeping the operating tax rate at $5.06 per $100 of assessed valuation for the next year, Neubauer said.
And the state, on which the district relies for much of its revenue, is having its own problems and is way behind on payments to all school district statewide. He said Illinois' financial condition is third worst of all states nationwide.
"State funds to our district this year have been very late and the future of funding levels is at risk. There's a lot of speculation as to whether the state will be able to pay schools funds they owe them this and next year, even if they want to," he added.
Neubauer explained that the $5.5 million budget deficit is a deficit in the district's bank account that is used to pay for day-to-day expenses.
The fund balance for this year of $23,408,960 is expected to drop to $17,786,077 for the 2010-11 school year because of the low CPI numbers, the EAV decrease, a 13 percent increase in the district's cost of employee health insurance, a $160 per pupil reduction in the state's General State Aid payments and state payments for categorical grants being flat.
He told board members they have already taken action on ways to generate an estimated $450,000 in new revenue to help offset the $5.5 million deficit.
They include offering breakfast in all schools next year which will generate $50,000, and fee increases which include $30,000 for building rental fees; $100,000 for additional student fees; $200,000 for additional course/registration fees, $40,000 for driver education fee hikes and $30,000 for increased athletic user fees.
He said they will realize salary reductions totaling $3,908,500 which includes the reductions that were to be determined in the Monday night executive session following the board meeting.
Cuts recommended by the administration were presented by Neubauer to the board which includes instituting a district-wide employee furlough day that would save $350,000.
He said they also recommend hiring only 12 of the 32 additional teachers needed for the expected enrollment growth next year. Cutting 20 teachers will save $1,200,000, he said.
Reducing police security for school events would save $20,000 and reducing the hours and workdays of select administrators and support staff would save $194,500, and replacing eight retiring teachers with new teachers will save about $300,000, he said.
Program reductions would save another $878,000.
Postponing curriculum renewals which is primarily for textbooks and materials would save $300,000, suspending the Building Trades program to build a house would save $20,000, and restructuring Driver Education, Academically Talented Program and Junior Curricular Coordinators would save $187,000.
Neubauer said that because they have more than $500,000 invested in two homes, one built and not sold and another one almost complete, they are recommended the Building Trades program be suspended until the housing market improves.
Dr. Carla Johnson, director of secondary teaching and learning, said they will put five new programs on hold. They affect math, the learning center and student services which were to be presented this fall and career and tech and fine arts which were to be presented next year.
Cathi Mundsinger, director of elementary teaching and learning, said they just completed the math program changes and will postpone action on the social studies and reading programs.
She said the Academically Talented (AT) programs will be restructured. One teacher is retiring, so the program may be postponed next year at the second grade level but still presented for third, fourth and fifth grades, she said.
Other savings would be $108,000 by reducing the number of intramurals and clubs by half; $50,000 by reducing high school athletic budgets by 10 percent and $27,000 by reducing the junior high summer band program.
Todd Colvin, assistant superintendent for administrative services, said the fifth grade summer band program is being restructured and will now be presented as a summer school enrichment program with the Oswegoland Park District.
He said school principals and administrators will be reviewing the intramural programs to be sure they are the same for all elementary schools, junior highs and the high schools. He said these are programs that are offered in addition to the soccer, volleyball and similar sports programs.
List programs
targeted for elimination
Programs proposed to be eliminated and their estimated savings include elementary roller skating PE Unit, $28,000; all non-curricular field trips, $58,000; and high school student salaries for the Interrelated Cooperative Education (ICE) program, $100,000.
Students will still be able to participate in the ICE programs as interns, but will not be paid unless they are working for an outside firm, officials said.
Proposed operation reductions would save an estimated $476,000.
They would save $315,000 by reducing budget allotments for the Office of the Superintendent, and reducing costs for the board of education and school buildings by 10 percent and cutting the budgets for transportation and Hands on Science department.
Another $100,000 would be saved by reducing meeting costs and $61,000 saved by reducing postage and printing expenses.
The total estimated savings would be only $5,262,500, but with the additional new revenue from fee increases, the savings is estimated at $5,712,500 which would cover the $5.5 million deficit, Neubauer said.
He said they would have to continue to limit district expenses, monitor the state financial situation, and review e-mail comments.
Neubauer said they have received only $13 million of the $33 owed them by the state so they expect to issue Tax Anticipation Warrants (TAWs) this spring. This is a form of borrowing on which the district must pay interest. And the TAWs must be repaid as soon as the district receives property taxes from the county.
"We will be looking at borrowing up to $15 million, not $6 million like in the past," he added.
Colvin said 90 percent of the expenses for their Early Childhood Center are paid from state categorical grants.
"We don't know what to plan for next year," he said.
Neubauer said Oswego is already more fiscal responsible than many other districts.
He said Oswego's pupil-to-administrator ratio is 263.4 students for each administrator making it fifth highest out of 13 comparable districts. The state average is 201.8 to 1, he noted.
Oswego's pupil-to-teacher ratio is 16.2 students per teacher, which is highest of 13 comparable districts, and higher than the state average of 13.3 students for each teacher, he said.
He said the district's operating expenses per pupil for 2009 were $8,885. He said only four of 13 comparable area districts are lower.
Board to hear more
public comment Feb. 22
An expanded public comment forum will be held at the Feb. 22, school board meeting before the board members direct the administration to implement the deficit reduction plan so the 2010 (FY2011) budget can be developed and adopted.
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