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UNION — Although the Daniel Boone Area School Board took action last week to save kindergarten and extracurricular programs, the district’s financial woes are far from over.
For one thing, a number of proposed curricular and personnel cuts remain on the chopping block. For another, the board is relying on a $2 million fund balance to close its deficit gap, and while that may be available this year, it won’t be next year when the district’s expenses will almost certainly be higher.
The board has been working since December to close a $5 million budget deficit projected for the 2013-14 school year. In order to balance the budget, the board had seriously looked at eliminating all sports, extracurricular activities and kindergarten programs traditionally offered by public schools, but not mandatory.
Those highly unpopular cuts, which would have saved the district about $1 million ($486,000 for kindergarten and $450,000 for extracurriculars), were taken off the chopping block by a unanimous vote at a budget meeting Wednesday night. The board opted instead to use $2 million fund balance from a projected $3.8 million fund balance (as opposed to the $1.2 million originally proposed).
But several board members and parents in the audience expressed concerns about what the future holds. Because, while kindergarten and sports have been saved for this year, they could wind up under the ax again next year.
At Wednesday’s budget meeting, Superintendent Gary Otto gave a brief history of the district’s financial crisis, which dates back to the 2009-10 school year. He noted that the board had made a series of budget cuts totaling about $10 million since that time, trimming $3.5 million in 2010-11, $4.4 million in 2011-12, and $1.7 million in 2012-13.
Otto read a litany of cuts that included: a reduction of 65 staff members, elimination of the middle school foreign language program, consolidating bus runs, discarding full-time kindergarten and returning to half-time, decreasing the library staff and instituting activities fees for all extracurricular programs.
“Our economic times are making us take a long look at what is necessary, because we are getting to the point where we can only do what’s necessary,” Otto said, explaining why the board was looking at slashing kindergarten and sports programs.
But why, if the district has made $10 million in cuts since 2010, is it still plagued each year with the threat of staggering budget deficits? The answer, according to board President Andrew Basile, lies in the district’s spending patterns.
“We don’t have a revenue problem, we have a spending problem,” Basile said. “We’re in the position we are today because of poor financial planning.”
He believes the path to the district’s budget woes lead directly to two culprits: the first is salaries and benefits, which rise to the tune of more than $3 million each year; the second is a $7 million debt service that will remain in the budget through 2034.
The debt service on the district’s $104 million debt accounts for 14 percent of the $52 million proposed budget. And while Basile called that a “significant liability,” it is at least a fixed cost. Salaries and benefits for teachers, on the other hand, account for about $27 million in the proposed 2013-14 budget and rise by $2.5 million every year.
As Basile sees it, the board never should have signed an early bird contract with the teachers in 2009 that includes yearly 4 percent salary increases.
“We need another $2.5 million every year just to cover the teachers’ contract,” Basile pointed out. “I don’t begrudge the teachers for negotiating in their best interest. I was disappointed that the board didn’t take the time to figure out what that obligation was going to cost the district. It turns out that obligation was something we couldn’t afford.”
While the contract isn’t set to expire until August 2015, the board is hoping the teachers will make some concessions to reduce the impact of salaries and benefits on the budget for 2013-14.
“It’s up to the teachers’ union to provide us with some relief. The teachers’ jobs are on the line. If they want to save jobs and save programs, we think they should come back to us with some concessions.”
If they do, it won’t be the first time. Two years ago, the teachers’ union made concessions, taking an across the board pay freeze for the 2011-12 school year, and getting rid of tuition reimbursement. That saved the district $1.1 million in exchange for extending the contract through 2014-15. Those adjustments continue to save the district $800,000 a year, the teachers’ union has stated.
The board is also seeking concessions from administrators and support staff, Basile said.
Meanwhile, the board’s revenue enhancement committee is wrangling with ideas to bring in additional money for clubs, sports, band and all extracurricular activities.
“The committee is working to figure out ways to make our clubs and athletics self-sustaining so that they are never part of a budget discussion going forward,” said Basile. “The kids don’t deserve to have to worry about whether they’re going to be able to participate in a sport, or play an instrument or enjoy a club activity.”
The committee is looking at possibly raising activity fees, embracing district-wide fundraising campaigns, and possibly selling advertising and Daniel Boone merchandise, all in support of sports and extracurricular programs. Meanwhile, the overall cost of those programs could be reduced if stipends were eliminated from future teachers’ contracts, Basile said.
Another possible revenue source could come from the Amity Primary Center, which the district has proposed closing. While no decision on that can legally be made until May, the district stands to save more than $600,000 annually in staff and maintenance costs by closing that building and moving the students into other facilities, according to information on the district website.
The building could then serve as a revenue source if it were leased, or it could be used as an administration building, saving the district the $100,000 it currently spends on renting office space.
For 2013-14, the board will likely be able to close the budget gap by raising taxes to the Act 1 index and using $2 million of a $3.8 million fund balance, in addition to cutting expenditures. But Basile pointed out that the $2 million fund balance won’t likely be available in 2014-15, and salaries and benefits will rise by over $3 million.
“We’re already looking at being $5 million in the hole going into 2014,” he said.
While that may be eased by increased revenues from sources being considered by the revenue enhancement committee, and savings from the Amity Primary Center, ultimately Basile feels the district’s best hope may lie in long-term budget planning.
“My hope and dream is that this school district will implement a five to seven year budget and use that going forward so that we can look at the impact of all our contracts on the budget,” he said.