News on the financial outlook for the Harrisburg School District is grim, Superintendent Dennis Smith told the board during Tuesday night’s meeting.
The state will likely prorate — keep a portion — of the amount of state aid the district receives. Smith has heard the state may distribute 89 percent of the normal amount of state aid, 85 percent and 80 percent.
He said the amount of proration is determined by a complex formula that takes into account the area’s equalized assessed valuation of property, average daily attendance and the poverty rate with the goal of setting the amount of funding per student at $6,119 — the minimum amount deemed to be adequate to educate students.
Smith said if the state prorates at 85 percent, the 2013-2014 state entitlement of $9,763,668 would be reduced to $8,299,118, a loss of $465,178. Over a three year period the loss of state aid to the district would be $3,070,066.
“That’s over a $3 million loss to our district, over $3 million just because the state is not paying its bills,” Smith said.
The school’s ending balance for this year is predicted to be $825,933. Under the 85 percent proration the ending budget in 2013-2014 is predicted to be $266,259, for 2014-2015 is negative $149,116 and for 2015-2016 is negative $564,490. When the ending balance hits negative Smith said the district would have to borrow money through issuing tax anticipation warrants.
“Then we go to the bank to borrow against future taxes,” Smith said.
Smith calculated the cost savings efforts the board put in place this year of not replacing six retiring teachers at the end of the school year which saves $512,000 and not replacing two retiring teachers after 2013-2014 that saves about $144,300.
There are also unknown factors that could come into play and make the situation even more dire, including Governor Pat Quinn’s desire to transfer responsibility of teacher pensions from the state to the district, a decision by the state to up the proration percent and pay districts less than 85 percent of their entitlement, possible impact on the equalized assessed valuation of taxable property due to the Feb. 29, 2012 tornado, penalties to the district from the Affordable Care Act if employees who cannot afford the district’s insurance turn to the state for health insurance, salary costs for staff for 2013-1014 and impact from federal sequestration if lawmakers fail to raise the debt ceiling.
Board member Dean West returned to a challenge he issued in December for the board to find a way to cut $450,000 from the budget over the next three years.
“If we do nothing or do the minimum we could take a cash flow problem and turn it into a debt problem,” West said.
He believes the time to “stop bleeding” is now rather than wait until debt forces the district into action.
“We have got to make cuts some time, so do it while we’ve got money in the bank, not when we get $1 million worth of money to pay back,” West said.
Among his suggestions — that he said he determined based on suggestions a year ago from Smith — are doing away with 12 classroom special education aides for a savings of $300,000. Currently, the 12 aides are required under Illinois law. There are federal guidelines regarding special education that do not require special education aides. The state guidelines do require them, but the Illinois State Board of Education is questioning whether to keep its guidelines in place or revert to the federal guidelines.
“If they revert to the federal guidelines, we are not obligated to have aides. That doesn’t mean we shouldn’t,” Smith said.
Other considerations are cutting the teacher’s retirement system benefits for substitutes for a savings of $20,000, cutting one janitor for $24,000, cutting one ag teacher for $46,000, cutting a records nurse for $12,000, imposing a pay for play fee of $150 per student to achieve an $18,500, cutting an assistant cheerleading coach for $2,500, cutting one media specialist for $46,000, cutting two assistant football coaches for $7,000 and cutting two kindergarten aides and and an East Side copy aide for $22,480. West calculated making all those cuts would amount to a savings of $498,480.
Board members discussed forming a committee with administrators involved to see what areas could be cut to achieve $450,000. Administrators were not happy.
“It’s hard as an administrator not to vehemently defend your school, but I think everybody knows what we need to do,” High School Principal Karen Crank said.
Middle School Principal John Crabb said it is hard for him “to look at a young family and say, ‘Sorry, your kids are going to get a second-rate education here.’”
Crabb questioned whether making that amount of cuts would actually save the district’s budget or whether the state will simply continue to shrink money to schools forcing a bad situation regardless of the district’s action.
“I don’t think it’s fair to the kids or to the employees to fix it while we’ve got money in the bank,” Middle School Assistant Principal Gabe Angelly said.
“It’s not fair,” West said. “It’s ugly and not right, but nobody is going to forgive our debt because it’s not fair.”
“Three years from now we could be gone beyond (issuing tax anticipation) warrants,” DeNeal said.
The worst case scenario was not directly spoken, but Smith made a passing reference to the “C word” in mentioning hearing Hardin County’s school board may be cutting 12 staff.
“If this doesn’t push the ‘C word’ — consolidation…,” he said.
As action to reduce certified staff — an ag teacher and media specialist — must be taken in time to send a letter to staff by March 15, the board set a special meeting for 6 p.m. May 7 at the high school media center as there will be a spring musical and a large crowd at the middle school at that time.
During the meeting:
The board voted to offer a summer food service program at West Side School June 3 through July 26. Smith said he the sight of children running from buses into the school in eager anticipation of breakfast motivated him to research the program. Also the district’s poverty level has crept above 50 percent. The state would be reimbursed $2.99 per meal from the federal government.
The board approved maternity leave for Cassidy Russell.
The board expelled two students, one middle school pupil for violent altercations who is to attend the Learning Alternative School for at least one year and one LAB school student for disciplinary issues.
Rehired Scott Dewar, Karen Crank, John Crabb, Gabe Angelly, Kim Williams and Randy Smithpeters as administrators.
Accepted the resignation of individual aide Deborah Basham.
Hired Crystal Partain, Jarrine Fletcher, Sharon Horton, Brandon Elam and Sherri Casteel as individual aides.