The Clarkston School District’s budget is caught in what administrators are calling ‘the perfect storm.? As a result, drastic steps are being taken to avoid a further financial crisis.
The first such step is the decision to cut $4 million from the 2007-08 budget, a move that will likely result in the loss of jobs throughout the district.
Superintendent Dr. Al Roberts described the factors coming together as ‘decrease in enrollment, three years of no foundation increase catching up with us and the economy ? health care and retirement costs are going up.?
Even with the $4 million cut, the district will still post a deficit for the third year in a row, said Bruce Beamer, executive director of business services.
According to Roberts, the cuts are one of several drastic steps that need to be taken in order for the district to operate on a balanced budget by the end of the 2008-09 school year.
General fund revenue for the district steadily increased from 2000 until the 2006 school year, according to numbers released by Plante Moran auditors. In 2000, the district reported approximately $50.8 million in general fund revenue, increasing to approximately $69.1 million in 2005. Even so, the district’s expenditures increased as well, and in 2006, the district posted a $4.8 million deficient.
On June 12, the Clarkston School Board approved a one-year contract for 196 central office administrators and support staff that increased their salaries by two percent.
It includes a three-percent ‘performance merit incentive,? approximately $4,345, for Roberts at the end of this school year if he meets goals set by the school board.
All contracts are up for renewal this school year. Negotiations are underway.
Beamer said he projects the district to post a $5.5 million deficit by the end of this fiscal year, even with the cuts. The general fund balance will be depleted to approximately $7.9 million, leaving it at approximately 10.1 percent of the annual average expenditures. The district’s goal is to keep at least 10 percent of the budget in the general fund balance.
‘We’re projected to run at a deficit next year, and that’s why the board made their decision to say we can’t continue to use fund equity to balance the budget,? Beamer said.
The district currently receives $7,332 per pupil in state funding, a slight increase over last year, but the district also experienced the first drop in enrollment in nearly 20 years.
Roberts acknowledged that people will be concerned over how the cuts will affect jobs in the district, but added that with approximately 80 percent of the district expenses coming from staffing, it would be unreasonable to expect no jobs losses.
‘We care about the people we hire and we care about the work they do, but we know that under the mandate set by the board ? and it’s a correct mandate ? that everybody has to live within their means, that we have to do it with fewer employees,? Roberts said. ‘I think it’s unfair to go down the road without any idea, so we want to give them some idea without creating paranoia.?
While cutting staff means affecting classrooms throughout the district, Roberts said some operations such as busing are already running on minimal funding, so cuts will have to be made elsewhere.
‘If we cut any more from transportation, there won’t be any sense in running it at all because we’re at the bare minimum,? he said.
Nothing is certain at this time, but Roberts said the cuts will likely be in program development, staffing, class sizes, and supplies such as textbooks. Roberts stressed that all ideas are still very much in the planning stage and no ideas have been committed to yet. Administrators and staff are working to develop ideas based on their areas of expertise, but he has also received ideas from concerned parents in the district.
‘We’re taking any idea that is generated and putting them on the list for now ? no idea has been a bad idea,? he said.
District-wide teacher and administrator contracts are up for renegotiation this year, and the cuts will definitely play a role in those negotiations.
‘I can’t say how it’s going to play out right now,? Roberts said. ‘Even if every employee said ‘okay, we’ll take a freeze this year,? our budget would still go up.?
The district’s possible switch to a trimester system to meet new state graduation requirements has also been influenced by the budget crisis. Roberts said the trimester system became the favored option because it would be the most cost-effective solution.
‘The state has come up with these new high school graduation requirements. There’s no new money with that, but there will be a number of implications for us in terms of certification of staff and in terms of how many staff we have,? Roberts said.
A final draft of recommendations is expected to be prepared early next month, with a board workshop meeting scheduled for Jan. 22. An official decision on the cuts is not expected until February or March, however.