MILLERSPORT – Bussing for Millersport High Schools students is the first casualty after voters rejected an 8.8 mill levy by a 970-691 vote on Nov. 4.
School board members unanimously agreed Monday night to operate a single bus route for grades K – 8 effective January 5. State law requires bussing K-8 students. The change to a single bus route will save $40,000 in this year’s budget. Board members also agreed not to fill a currently vacant central office secretarial position, saving $37,000.
The cuts came after a closed or executive session that followed a nearly 90 minute presentation on how the Ohio Department of Education will monitor the district’s finances.
Ohio Department of Education financial consultants Pat Williard and Roger Hardin made the presentation. Williard will be the district’s primary contact. Hardin, a retired superintendent most recently at Berne Union from 1997 to 2004, will serve as chair of the district’s Financial Planning and Supervision Commission if the district’s financial crisis reaches that stage.
The process is based on the district’s most recent five-year forecast. A current year deficit triggers contact from a financial consultant. Walnut Township is projecting a $92,000 deficit at the end of this year (June 30, 2015). A deficit in year two requires the district to draft a plan with “specific actions” to eliminate the deficit. Walnut Township is projecting an $892,000 deficit at the end of year two (June 30, 2016).
The district’s deficits will place it in Fiscal Caution. It will join 12 other districts there. Ohio has more than 600 local school districts. Hardin said that total is the “lowest number in some time.” The first step is a financial analysis, but Hardin said Walnut Township’s numbers are good.
Fiscal caution status is effective
10 days from the date of the letter from the Ohio Department of Education. The district then has 60 days to develop a plan to eliminate the projected deficits. ODE will monitor the district to make sure the written plan is implemented. A free performance audit conducted by Auditor of State is available.
“You can’t end the year in a deficit mode,” Hardin emphasized. Board members need an additional $15,000 in cuts this year to eliminate this year’s deficit. Eliminating the year two deficit – $892,000 – will be much harder.
The Auditor of State can place the district in fiscal watch if the district fails to submit an acceptable plan or does not comply with it. Three of Ohio’s 600+ districts are currently in fiscal watch. The Auditor of State is much more involved with the district at this point. Once again the district has 60 days to submit a financial recovery plan. Failure to submit that plan, update it or implement it could result in the Auditor placing the district in fiscal emergency.
Right now five districts are in fiscal emergency. A total of 41 districts have been in fiscal emergency. The first step in a fiscal emergency is the appointment of a five-member Financial Planning and Supervision Com- mission. One member is the State Superintendent or designee who will be Hardin if the district is put in fiscal emergency. He will chair the Commission. The Director of Budget and Management or designee is other member representing state government. The governor and the county auditor will appoint one businessperson each who lives or works within the district. The State Superintendent appoints one district parent who has a child enrolled in the district. At least one member must be a woman.
Now it is up to the Commission to adopt a financial recovery plan within 120 days of its first meeting. The plan can not be implemented until it is approved by the State Superintendent. The Commission receives legal assistance from the Attorney General and financial advice from the Auditor of State. The Commission has authority over all issues, documents and actions that could affect district finances. They make “recommendations and implement cost reductions and revenue increases to achieve balanced budgets and carry out the recovery plan.” The Commissions can make reductions in force without regard to collective bargaining agreements, but must first consider administrative and nonteaching reductions. The Commission can not cancel union contracts.
Hardin said the financial recovery plans all have three general options:
• Increase revenue;
• Decrease expenses; or
• A combination of both.
Only two of the total of 41 districts in fiscal emergency were able to balance their budgets with only reductions. The others increased revenue by eventually approving new levies. It took Little Miami School District in Warren County eight tries before voters finally approved new money, Hardin said. “Eventually, the light goes on.” He added that the amount needed to balance the district’s budget generally increases with every levy attempt.
“A school district can not close its doors for financial reasons,” Hardin said. Districts must also continue to meet state minimum requirements. Sports and other extra-curricular activities are not required, he said, but eliminating them often aggravates the problem by chasing students away and the state aid attached to them and upsetting voters.
A district in fiscal emergency can request a two-year, interest-free advance of its state foundation payments. Repayment must start in the next fiscal year and is withheld from the district’s foundation payments. “It is not free money,” Hardin emphasized. Advances can be requested several times, but district Treasurer Kirk Grandy pointed out that the district only receives $1.3 million in foundation aid a year which limits how long advances can be used to balance budgets.
Hardin answered a number of questions from board members, district employees and residents. “The majority of the districts going into fiscal caution don’t go into emergency,” he said. He disputed a contention that the state comes in and takes over if the district is declared to be in a fiscal emergency. Three of the five members of the Commission are local.
Hardin said Walnut Township could be declared in a fiscal emergency next year. “It is a step process,” he explained. “You have to cut $92,000 this year – cut a person or delay a payment.” Hardin is more focused on the $892,000 deficit next year.
“Consolidation is a local issue 100 percent,” Hardin said in response to a question about forced consolidation. A county Educational Service Center can merge two contiguous districts easily, he said. To do so, both district’s boards must approve the merger. Hardin added that most districts don’t want to merge with a district in fiscal emergency due to the responsibility for the inherited deficits and the addition of the “no” voters. If a merger occurs, he said, “You will pay your new district’s taxes.”
Hardin agreed that most districts in fiscal emergency lose students, particularly if they reduce extra curricular activities or put pay to play too high. “It is always a balancing act,” he said.
“Fiscal caution is not the end of the world; it is a path to it,” Hardin said. “Don’t expect help from within the beltline (I-270),” he cautioned. “It is a local issue.”
Hardin told board members, “Don’t make me come back with a commission in tow.”
In other business Monday night, elementary principal Angie Harrison had some good news for board members. Preliminary results show that Walnut Township third graders had the best scores in the county with 69 percent passing the fall Ohio Achievement Assessment in Reading.
High school principal Jeff Stought said White Christmas packages will be delivered to 30 families and senior citizens on Dec. 18. He congratulated varsity football coach Terry Holder who was named Coach-of-the-Year for Division VII. The team broke a 48-game losing streak and were undefeated midway through the season. The Lakers narrowly missed the playoffs and finished with a winning record.
In his brief report, Superintendent Randy Cotner said the district is reviewing policy changes particularly with respect to electronic cigarettes. They will be considered tobacco, he said. “We will be back on the ballot in May 2015,” Cotner added.
Board President Faye Whitaker signaled she is ready to step down as president. She appointed Tom Cumbow to serve as President Pro-Temp for the board’s reorganizational meeting on Monday, Jan. 12. Board members will select a president and vice president at that meeting.
On personnel matters, board members accepted the retirement of family and consumer science teacher Donna Anderson at the end of the school year. Joe Malone’s resignation as assistant girls basketball coach was accepted effective immediately. Supplemental contracts for Tasha Holbert as basketball cheerleader advisor; Jessica Schilling as junior high cheerleader advisor; and Jenny Matthews as assistant girls basketball coach were approved.
Board members scheduled a special work session to discuss cuts for 5 p.m. on Wednesday, Dec. 17, in the elementary library. The meeting is open to the public. Cotner expects have more details about the impact of the bussing cut, including its impact on school starting times available at that meeting.
The board’s next regular meeting begins with the annual budget hearing at 6 p.m. on Monday, Jan. 12, immediately followed first by the reorganization meeting then the regular January meeting. All three meetings will be in the elementary school library.