For a school system that brings in $163 million but spends $177 million, it is not surprising that the search is on for ways to cut expenses and increase revenues a year from now.
With little fund balance expected next June 30, Superintendent Jeff Bearden on Monday night presented a variety of cost-saving options for consideration by the Fayette County Board of Education to implement in time for the 2013-2014 school year.
Among those items on the expense side were reducing staff, reducing pay, closing schools, eliminating assistant principals, parapros and middle school athletics and outsourcing custodial services. And on the revenue side, Bearden surfaced the idea of out-of-county students and a referendum that would raise the school millage rate beyond the legal maximum.
BoE cost-cutting ideas
• Close up to 5 schools and fully utilize Rivers Elementary
• Outsource school janitorial services
• Cut up to 14 locally-funded assistant principals
• Through attrition cut or combine central office positions
• Eliminate all middle school athletic programs
• Eliminate all first-grade parapros
• Either make salary cuts or institute “shut-down days”
• Eliminate local funds for pre-K
• Combine middle school and high school bus routes
• Voter referendum to allow school tax rate to rise above state cap of 20 mills
• Allow out-of-county students to pay tuition to attend Fayette schools
The list of cost-saving ideas supplied by Bearden was broken down in terms of “recommendations,” “other possibilities” and revenue ideas for 2013-2014. The “recommendations” came from Bearden while the “other possibilities” suggestions came from members of the community.
Though no decisions were to be made Monday night and though the presentation was followed by few suggestions by the board, Bearden after the meeting said both his recommendations and those from the community all on the table for further discussion. Further discussions on the cost-saving measures will continue in the coming months.
The recommendations section list included maximizing savings and efficiencies, school closures, outsourcing custodial services, continuing to reduce and combine positions at the county office and continuing the process of staff reduction in all employment categories through attrition.
By maximizing savings and efficiencies Bearden was referencing the monitoring of all vacancies and filling only those positions that are critical to the school system. The recommendation also included being efficient with energy and purchases. Bearden noted that the school system last year increased the fund balance by $7.2 million by using these approaches.
Citing school closures, Bearden said each closing would save approximately $800,000, with a total savings ranging from $1.6-3.2 million. Bearden in April had proposed to close Fayette Middle, Hood Avenue Primary and Fayetteville Intermediate and open Rivers Elementary as a way to help offset the school system that is facing significant decreasing revenues from plummeting local tax revenues and falling student enrollment that generates approximately $4,000 per student from state sources.
The discussion among board members at the May 2 workshop ended with Bearden being asked to develop four optional closure plans for consideration. Those include:
1. Bearden’s original proposal for closing Fayette Middle, Hood Avenue Primary and Fayetteville Intermediate and opening Rivers;
2. Bearden’s proposal and closing Tyrone Elementary;
3. Bearden’s proposal and closing Brooks Elementary; or
4. Bearden’s proposal and closing both Tyrone and Brooks.
The savings would be $1.6 million if the initial proposal of closing the three Fayetteville and opening Rivers is selected. The savings would top out at $3.2 million if Brooks and Tyrone are also closed and Rivers is opened.
A third recommendation Monday night was one that would outsource custodial services for a savings estimated at up to $1 million. Bearden said the reason for looking at custodians for outsourcing is because it is the one job category with significant turnover.
Bearden’s fourth recommendation would continue to reduce or combine staff positions at central office, including through attrition. Bearden noted that Fayette spends less than the state average on general administration, citing the example the six assistant superintendents funded by the state though the school system employs only two of the upper administrative positions.
The fifth recommendation would be to reduce staff in all employment categories through attrition.
As for “other possibilities” for cost-savings, those included reducing the number of assistant principals. The school system currently employs 14 more assistant principals than the state pays for. If reduced, the cost savings for the 14 positions would amount to approximately $1.2 million in salaries and benefits.
Also up for discussion is the elimination of all middle school athletics at a savings of $210,000.
Another potential on the list is the elimination of all 1st grade parapros for a savings of $1.2 million.
Yet another cost savings would be “shut down days” that would save approximately $700,000 per day.
An additional suggestion came in the form of a salary reduction that would save $1.325 million for every 1 percent of salary reduced. Bearden in stating the possibility said that employees last year overwhelmingly preferred “shutdown days” to salary decreases.
And the final possibility would come from eliminating local funding for pre-kindergarten for a savings of $110,000.
Board member Terri Smith during the discussion suggested that the board look again at the potential for combining middle and high school bus routes.
“I know we’ve talked about it before,” Smith said, suggesting that it might be worthwhile to take another look at the advantages and disadvantages of combining the routes. She also suggested taking another look at the supplements paid by the school system.
The flip side of the coin involves the potential for generating additional school system revenues. In that regard Bearden suggested two possibilities, one of which surfaced in the past and the other more recently.
The suggestion from last year that has surfaced again is one that would allow out-of-county students to pay tuition to attend Fayette schools.
The other revenue idea would be a referendum to allow the school board to raise the millage rate beyond the current 20-mill rate that represents the legal maximum. It is not surprising that the idea would surface as a potential revenue-generating measure since Bearden initially floated the idea at the school board meeting on May 31. Minutes later Chairman Leonard Presberg followed suit. Bearden and Presberg said they had been told by a couple of parents that they would support a referendum allowing the school board to increase the millage rate beyond where it sits today at the 20-mill maximum allowed by Georgia law.
The school board in June adopted the 2012-2013 budget that totaled $177.34 million by using the nearly all of the $15 million fund balance from the school year that ended on June 30. The budget was adopted on a 3-2 vote, with board members Leonard Presberg, Terri Smith and Janet Smola in favor and with Marion Key and Bob Todd opposed.
Revenues are expected to total $163.14 million, with $78.9 million coming from local ad valorem taxes, $81.39 million from the state and approximately $2.8 million from other revenue sources.
Expenditures, on the other hand, total $177.34 million. That represents $14.2 million in expenses over revenues for the 2012-2013 school year that begins in July.