Schools consider doomsday scenarios
Carroll school leaders hope for financial help but brace for worst-case woes
March 6, 2013
Gary Sinclair (standing), from PMA Financial Network, presents a future budget scenario to the Carroll Community School District Board at a meeting Tuesday night. Sinclair discussed the current financial standings of the district and looked in the past and future to help create a budget estimate for the next 10 to 15 years. Daily Times Herald photo by Paige Godden
The Carroll Community Schools superintendent warned Tuesday that the district must cut its workforce to cope with declining student enrollment and stagnant state funding.
Superintendent Rob Cordes made the comment in a special school board meeting that explored the worst-case financial scenarios the district might face in the next five years.
"Doing nothing cannot be an option in a declining-enrollment district," Cordes said.
School data show that the district's enrollment has declined about 172 students in the past nine years - a drop of about 9 percent. The bulk of that decline happened in the 2007-08 school year, when enrollment dipped about 89 students.
Enrollment numbers that Iowa schools report to state officials are not the true number of students in each district because students with special needs count for more than one student based on a formula.
Cordes suggested that school leaders evaluate the need for every staff position when an employee retires or quits.
The district's website lists 26 potential job openings for next school year, including six for teachers. School board members might vote next week to add a new job - a district technology integrationist - to help teachers use technology in the classroom. It's unclear how much the job will pay.
School leaders offered early-retirement buyouts to senior staff members this year to usher out some of the higher-paid employees in favor of younger, cheaper ones. Most school employees are paid based on their years of experience.
So far, the school board has approved three buyouts and plans to consider another. To be eligible for the buyout program, an employee must be 55 of older and have at least 20 years of continuous, full-time employment with the Carroll district or a total of 30 years of school employment.
Those selected would be paid a lump sum equal to half of their annual salaries, with a maximum payout of $35,000.
Gary Sinclair, a financial consultant of PMA Financial Network, presented on Tuesday several grim budget scenarios to the school board. The worst-case funding scenario - in which the district's enrollment dips 20 students each year and state lawmakers approve no additional school funding - shows Carroll Community School District in $8 million of debt by 2018.
Carroll's enrollment dipped 28 students since the last school year.
Sinclair presented what he believed to be a close estimate of the district's financial stability and said the district could be facing a $5 million shortfall by 2017, even with less drastic enrollment losses and some additional state support.
He said all school districts need to be demanding stability in the state's so-called allowable growth, which dictates how much schools can spend per pupil and affects the amount of financial help from the state.
As for the solution to long-term budget planning, Sinclair said, the answer is two-fold.
"It's looking at expenses and revenue funding," Sinclair said. "I can give you a hundred different scenarios, but in the end it's what you and your community feel comfortable with."
Board member LaVern Dirkx wondered aloud: "If we're in 'good' shape, where are the districts that are in bad shape now?"
After the financial presentation, the board members discussed several big projects that are under consideration for the next several years.
The district is already planning to borrow $1.6 million for an addition to the middle school, which will be paid for by expected revenue from a statewide sales tax for school building and infrastructure improvements. It must decide whether to borrow money for the softball field renovation and high school gymnasium heating-and-cooling upgrade that are already under way.
Cordes ticked off a list of other potential projects that he said would be smart to borrow money for all at once rather than pay thousands of dollars in fees to seek bonds individually for the projects: moving the learning center, or alternative school, from a portable building on the Adams Elementary grounds out to the high school campus; adding 7,000 square feet of space to Fairview for a new entrance and cafeteria; and adding a wrestling room and storage space to the high school.
Board president Kim Tiefenthaler wondered whether it would be wise to juggle all those projects at once.
"I know exactly what you mean, but it irritates me if we bond and do all the work that goes into bonding. ... How many times do we want to spend that?" Cordes replied. "It comes down to how much of this is a need and how much do we want to do right away?"
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