November/December 2008

            At the November meeting of the Board of School Trustees, we began the very difficult discussion about ways to trim $5,000,000 from our budget on a yearly basis. The need for this drastic reduction is complex and the remedies will not be easy. However, as a community we have made these kinds of tough decisions in the past, and I am confident we can do so again.

            Let me try to explain the sequence of events that have taken place, most of them recently, which seem to be the largest contributing factors in this situation. First, in 1971 we had over 20,000 students. The decline in enrollment began the following year and has continued steadily. In 2008 we have 9500 students. This steady decline followed closely the decline in automotive jobs in our community. During most of those declining years the state gave schools a guarantee so that revenues would not be lost. This meant that schools with declining enrollment still received additional state money each year. This was done to help offset the costs over which schools had little or no control, such as insurance and utility costs. This changed a few years ago; and, the current formula is based strictly on enrollment. Thus for every student lost, the corporation loses approximately $6000. Our loss of 378 students this year will create a loss of $2,268,000. In 2007 we were shorted over $1,000,000 due to uncollected taxes. Once again in 2008 we were shorted $1,400,000 due to drops in estimated revenue from several sources. In 2010 the property tax reform bill, in a provision commonly known as the Circuit Breaker, will create an additional yearly loss in excess of $2,000,000. These issues along with the Charter school which opened in the fall and the change in transfer tuition will likely create additional student losses. Thus, by 2010 we must reduce our budget by the $5,000,000 mentioned earlier.

            I met in late October with President Bohnenkamp and Vice President Morgan to discuss our financial situation and to see what kinds of data they would like my staff to provide them to help them make informed choices and decisions. At that time they asked that I provide projections of lost revenue and a data analysis on the consolidation of facilities. We have consolidated facilities several times during the last 37 years, sometimes due to declining enrollments and most recently due to construction of new elementary schools. At this time, we have only provided the Board a preliminary analysis of viable options based on the age, condition, and location of the facilities as well as the space available. The options currently being reviewed by the Board range from little to considerable consolidation. These are certainly not the only options concerning consolidation of facilities, nor are they by any means the only options for reducing costs.

            This information provided to the Board at the request of the President and Vice President is only a preliminary analysis and should not be confused with a plan carved in stone, nor even a recommendation as some might believe. We are, in fact, trying to ensure that the information is not presented as the final or only options available for cost savings. This analysis is intended only as a starting point for information for the Board. This community is rich with patrons who have not only the best interest of the community in mind, but also the knowledge and skills that could shed light on other ideas not yet presented. We need community involvement to remedy this situation in the best way possible for our students and community.

            I agree with Mr. Muir, president of the Anderson Federation of Teachers, that cost savings should be made as far away from the classroom as possible. Thus, the data given to the Board to date provides cost savings from sources other than classroom teachers.

            This discussion has just begun. We must now pursue strategies for not only sharing information with the community, but more importantly for gathering input from all stakeholders…students, parents, taxpayers, staff members, civic leaders.

            It may appear to some that we are over-reacting; however, having a well-thought out plan in place if our enrollment and financial trends continue their expected path is not only wise but absolutely necessary. While the year 2010 sounds far away, we are only six months from building the 2010 budget. And, we are only a couple of months away from beginning to build schedules for students for the 2009-2010 school year. As you can see, 2010 is really very close. We must begin to plan for the drastic loss of revenue in ways that we can ensure quality of education, provide cutting-edge technology, and be rich in opportunities for students. We can’t wait until 2010 arrives to cut costs.

            In the next few weeks the corporation will schedule town hall meetings. The purpose of these meetings for the community is to receive information and also make suggestions toward a solution. We are working diligently to ensure that all interested parties and stakeholders have ample opportunities to participate.