Press Release

October 15, 1999

For Immediate Release

$435 MILLION BUDGET APPROVED FOR 1999-2000 SCHOOL YEAR, INCLUDING $8.2 MILLION IN REDUCTIONS; "CHALLENGES AHEAD" FOR NEXT YEAR

The Board of Education approved this week an amended $434.9 million general fund budget for the 1999-2000 school year.

Significant changes were made relatively late in the budget cycle this year - already more than three months into the fiscal year - because several key decisions around labor costs were not finished until recently.

Those changes include $8.2 million in spending reductions needed to pay for new costs, including the pay-for-performance plans for both teachers and administrators.

The amended budget was approved unanimously at a special legislative meeting Thursday.

None of the reductions alter direct funding for schools or classrooms (other than spending that was due to expire), but Chief Operating Officer Craig Cook said the district is running out of options for savings in the future.

"A considerable amount of staff analysis helped identify the savings that led to the balanced budget the Board approved today," said Cook. "Many of these reductions reflect significant changes in our overall level of service. We do not easily absorb cuts worth $8.2 million. The amount of resources that is directly provided to schools remains unchanged, however, and for that we are grateful.

"But major financial challenges are just around the corner. With the cost of labor our largest expense by far, we see a troublesome crossroads ahead. Many efficiencies have already been identified on the business and support side of the district. Unless new revenue is found, current projections for the 2000-2001 budget already suggest that a minimum of $10 million in reductions will need to be found. This projected shortfall, which assumes no increased cost for labor, will be difficult to meet, particularly since so many one-time sources of cost-savings have already been tapped over the last several years."

During a discussion at a Board retreat on Wednesday, Cook discussed with the Board the idea of forming a community-wide citizens committee that might begin to study the current spending plan and "validate" the need for additional revenue.

Several Board members seemed receptive to this idea, but agreed that the new Board (three contested seats are up for election November 2) should choose committee members for this work.

The new spending plan adopted by the Board this week reflects a host of changes:

• $4 million in new costs for the 2.56 percent cost-of-living increase approved for teachers.
• $1.3 million in new costs to implement the pay-for-performance pilot for teachers.
• $1.8 million in new costs for cost-of-living increases for other employees.
• $980,000 in new costs for legal services, support for Balarat, health benefits for hourly employees and other items.
  A variety of reductions in central office departments were made in order to balance the budget.
  
• $300,000 from Curriculum/Instructional Services.
• $50,000 from Instructional Focus Team
• $200,000 from Elementary Education for unallocated teachers (teachers not at first assigned to a school)
• $100,000 from Secondary Education
• $225,000 from Unemployment Compensation based on requirements
• $400,000 from Department of Transportation, based on requirements
• $100,000 from Special Education, based on requirements
• $45,000 from Office of Chief Operating Officer for various expenditures
• $50,000 from Personnel Services; elimination of one manager position
• $800,000 from Department of Technology Services due to E-Rate Discount
• $1.3 million by using mill levy funds for the annual lease payment for the district's new student records system (SASI)
• $200,000 from Workers Compensation, based on historical and projected claims
• $800,000 million reduction in contingency reserve fund, to just under $1.3 million (.3 percent of total general fund) for emergency needs.

For a complete copy of the amended spending plan, please call the Public Information Office, 720-423-3414.