June 12, 2013 - In order to fix Oxford Community Schools' $467,817 deficit for the 2013-14 budget, which is proposed to be $45.84 million, teachers and administrators agreed to take pay cuts across the board based on student population growth next year (see below).
"The administrators and the teachers have agreed to give salary concessions of two percent, which we figured is the amount that would get us to that ($467,817) if there is no growth in student count," said Fred Shuback, controller and interim assistant superintendent of business and finance.
The student count was 5,677 in February.
"This is a wage proposal that was agreed upon in a good faith effort (by the Oxford Education Association and Oxford Administrators Association) to help the district eliminate the budget deficit," addedDeputy Supervisor for Human Resources Nancy Latowski.
The salary concessions include Superintendent Dr. William Skilling and all deputy and assistant superintendents.
"That wouldn't look good (if they didn't take 2 percent along with the teachers and administrators)," Shuback noted.
Skilling is supposed to get a $9,270 pay raise for the 2013-2014 school year per his contract.
"His salary, as provided in the contract, is the contractual obligation of the school district to him," Shuback said. "Accordingly, any raises provided for in our contracts are budgeted for, so the $9,270 additional base pay is part of the 2013-14 budget."
The raise would put Skilling at a base salary of $163,769; however, he has proposed if there is a need for a reduction, he will not accept the raise and instead, take a 4 percent cut to his current $154,499 salary.
"When there is going to be a reduction, I always feel like I have to go more than what we're asking others to do," Skilling said. "You have to lead by example."
"No direct offsets to salary budget accounts have been made as of yet," Shuback said. "We won't know definitively whether the salaries will go down, go up, or stay the same until the October student count."
What led to the deficit?
Some teachers have expressed concern that the deficit is due to various capital expenditures such as three pianos for the arts atrium at the high school. They cost the district a combined $165,000.
"All three pianos are used and Evola Music also donated an upright," Shuback noted.
Others concerns are programming such as the IB (International Baccalaureate) Diploma program at the high school. The district spent $110,255 on IB at OHS this year, a lot of which were one time start up costs for materials and teacher training, said to Assistant Superintendent of Curriculum and Instruction Dr. James Schwarz. The expected annual fee for IB is $9,500.
However, that's not case that has caused the deficit, according to Shuback.
"None of the capital expenditures made in the 2012-13 fiscal year have any effect on our budgeted expenditures over revenues for 2013-14 of $467,817 (prior to the potential concessions.) The capital expenditures cause our fiscal year 2012-13 gap of expenditures over revenues to be greater than if they had not happened, but whether or not we purchased the pianos, middle school band lockers, orchestra room carpeting (examples of the onetime expenditures), or other items of a onetime nature last year, we would still have the $467,817 challenge," he explained.
"What has contributed is the fact that our yearly expenditures - primarily salaries, but also supplies - have gone up over the years, and our revenues have been cut - largely by the state, but now also because of the sequester of federal funds."
"We have budgeted a 10 percent reduction in federal funds for the current year due to the sequester," continued Shuback. "This may be high or low, but it is still an expected, recurring reduction of these funds
The State Foundation Allowance is projected at $7,145 per pupil, which is a $58 increase from last year's of $7,087 per student. The district could receive up to $52 more per pupil for accomplishing seven of eight "best practices."
"Although a portion of the state aid is supplemented by best practice and other incentives, it does not get us back to the levels we had in the past," noted Shuback. "The State Foundation Allowance in 2009-10 and 2010-11 was between $7,500 and $7,600 per pupil."
But the increase in per-pupil funding is offset by the steep increase in the retirement rate, which essentially results in a net loss of $27 per student.
"The state retirement percentage that we must contribute for our employees has gone from 12.99 percent of employee gross pay in 2003-04 to approximately 24.5 percent in 2013-14," Shuback said. "In 2010, it was at 16.94 percent, so the jump in the past few years has been dramatic."
He also noted that between 75 and 85 percent all school district expenditures are salaries. "In the past years, we have granted a step increase to the teachers, and teachers eligible to go from the bachelor's (degree) lane of pay over to the master's (degree) lane of pay have done so when they have completed the requisite," added Shuback. "We have not cut staff in the past years, and this means that total salaries have gone up as a result of the step and lane increases that did occur."
Due to three teachers taking an early retirement incentive, the district avoided having to pink slip three teachers.
Early retirees include Mary Kraniak, fourth grade OES teacher and IB elementary program coordinator, 23 years teaching in Oxford; Dan Sargent, Oxford High School Social Studies Teacher, 20 years teaching in Oxford; previously worked as a sub teacher and tutorial assistant at Crossroads; and Bob Segula, Oxford Middle School Teacher, Math/Science Teacher, 26 years teaching in Oxford.
The general fund's fund balance is currently at $4,399,512 which is at 9.3 percent of the budget. According to board policy they like it to be between 10 and 20 percent. While they still have a positive fund balance, Shuback said they decided to take a $4 million loan out. This year, the district took a $3 million loan.
"This year is the first year we've had to borrow and next year we'll have to borrow," he said. "If we have more fund balance we won't have to."
The deficit is something that needs to be addressed said Shuback so they don't automatically deplete their fund balance on a yearly basis due to recurring costs exceeding revenues.
"We can look to increase student enrollment, but understand that our district is extremely unique in its ability to continually accomplish this. It won't happen forever," he said. "We still have the very real possibility that student aid revenue for virtual academy students, comprising the bulk of our growth, may be cut at some point because the state could decide that costs for a virtual student are less than for seated student, and that this should be reflected in per pupil state aid. So, this leaves us looking for methods to creatively reduce expenditures."
Skilling agreed the fund balance is healthy and needs to grow.
"It wouldn't stay healthy if we didn't take a very strict, disciplined approach to the budget for next year," he said. "The two ways we disciplined our selves was by not assuming any student growth and secondly, we refused to deficit spend to balance the budget."
Other budget highlights include a 17.9946 non-homestead millage rate and 5.9946 commercial personal property millage rate. Under maintenance, a $100,000 has been added for roof repair. Also, with the resignation of the Communications coordinator Linda Lewis, the district is looking to outsource communications and save a projected $72,270.
With former Deputy Assistant of Business and Finance Tim Loock leaving earlier in the year and changes to the organization and a late start on the budgeting process, Shuback said this year's budget was a difficult one.
"It was an interesting effort. People really worked hard to get this done. The administrators, the principals, and their administrative assistants have never had to work as hard as they did this year to get something done," he said. "We totally changed the way we're doing things. We went to the zero-based concept and there was big learning curve in that. It will be good to do it again to get people more comfortable."
"The biggest thing is to get people aware of what they're spending and to make sure they understand (it) in the concept of the whole district. Sometimes people think 'the district provides.' No, it's your money and you have to look after it," continued Shuback. "I think they got the message loud and clear on that."
Shuback is also looking forward to Pamela Anstey coming in, who will be taking over as assistant superintendent of business and finance.
While Oxford pales in comparison to other school districts with financial troubles, Skilling said they could not have achieved fixing the budget without the selflessness of the OEA and OAA members.
"For the second time since I've been here as superintendent, they have opened their contract and are willing to take a concession if need be and they did that in 2010.
"I can't stress how important the relationship we've had with the OAA and OEA. How they've worked with us the past six years to keep our district in a financially solvent position both by being willing to make sacrifices, if necessary, and secondly by investing time and effort in creating new opportunities and programs and furthering their existing education to help make our district very attractive to students and families," Skilling continued. "The results of their efforts, their selflessness, (are 1,100 new students enrolled) in the last six years."
The board of education will vote on the 2013-14 budget at its Wednesday, June 19 meeting. It will begin at 6:30 p.m. and take place at the Oxford Administration Building, located at 10 N. Washington Street.
OEA/OAA Salary Proposal based on Full-time Enrollment
Zero Student Enrollment: 2 percent
50 FTE*: 1.5 percent
100 FTE: .5 percent
200 FTE: 0 percent
400 FTE: 1 percent
450 FTE: 1.5 percent
500 FTE: 1/2 step on salary schedule; 1.5 percent for individuals who are frozen in longevity.
*FTE denotes Oxford students who are enrolled in the district on a full-time basis
Trevor graduated with degrees in English and communications from Rochester College. He wrote for his college and LA View newspapers before joining The Clarkston News in May 2007.