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District delays salary cuts

November 13, 2013 - Teachers, administrators and central office administration expecting 2 percent salary reductions due to the student count being down this year were relieved when the Oxford Board of Education decided to hold off on the reductions until next year.

The board recently voted 4-2-1 to delay the Oxford Education Association (OEA) salary reduction until September 1, 2014. Treasurer Robert Martin and Secretary Kim Shumaker voted against the measure, while Trustee Bill Keenist abstained from voting because he has a wife and son who are teachers in the district.

The board also voted 5-2 to delay the Oxford Administrators Association (OAA) salary reduction until August, 1, 2014 and delay the central administrators' (superintendent and all deputy superintendents) salary reduction until July 1, 2014. Martin and Shumaker again cast the opposing votes.

Martin questioned what had changed since teachers and administrators agreed last May to take salary concessions based on student growth in order to help fix the nearly $470,000 deficit in the 2013-14 budget.

This year's unofficial October student count showed 98 fewer students in the classroom, but the number of Full-Time Equivalent (FTE) students increased by approximately 10 students. Official FTE numbers are expected from the state sometime this month.

According to the agreement salary reductions were as follows: 0 enrollments = 2 percent cut; 50 FTE's = 1.5 percent cut; 100 FTE = .5 percent cut and 200 FTE = 0 percent cut. Salaries would have increased by 1 percent if 400 FTE's were obtained; 450 FTE = 1.5 percent increase and 500 FTE's = half-step on salary schedule; 1.5 percent for individuals who are frozen in longevity.

Superintendent Dr. William Skilling told Martin the main thing that changed was that the fund balance was 2.2 percent higher than anticipated last year.

"Our goal was to make sure we had a balanced budget and we had to work towards maintaining a 10 percent fund balance," noted Skilling.

According to Fred Shuback, controller and interim assistant superintendent of business and finance, the final amended budget anticipated a $1.4 million shortfall for fiscal year 2013, but the actual shortfall ended up being about $0.7 million.

"Unofficially, we are slightly above 10 percent as of the end of the year, with a fund balance of approximately $5 million," added Shuback.

While taking a 2 percent cut across the board would help with the structural deficit, Skilling said it wouldn't eliminate it.

"Even if we break even we're still not out of the woods as far as the potential structural deficit, that's going to be hanging over us either way," he said. "We don't know what for certain is going to happen next year, but if history keeps repeating itself we're probably going to see an increase in growth."

"The structural deficit can be thought of as a situation where recurring expenditures exceed recurring revenues," explained Shuback. "One-time reductions in expenditures and one-time increases in revenues will help alleviate the symptoms, but are no cure for such a problem."

An example he said was when questions came up last year regarding certain capital expenditures and their effect on the budget.

"One of the things that was indicated was that these one-time items in no way affected the fact that we had a structural deficit," Shuback said. "A permanent reduction of two percent in salaries is a measure that would help close the gap, and it would be a recurring cost savings.  So in that regard, the reduction would help the structural deficit."

However, as long as state and federal government have the ability to modify revenues and impose additional expenditures, the structural deficit will "remain a moving target," Shuback said.

"It is impossible to say what the exact amount of the structural deficit is, but until we are in a position where our fund balance is increasing on a regular basis, we have not solved the problem," Shuback said.

Why delay the salary reductions?

Skilling said he proposed delaying the reductions because he felt the reason they were in "such good shape" was primarily because of teachers and administrators.

He also feared what taking the 2 percent away would do to the moral and motivation of the staff.

Over the past six to seven years, Skilling said Oxford is the only district that hasn't actually taken a reduction in their salary compensation and it was a question of value.

"It is true we've only had one step increases in the last three years and our increases have been pretty flat, but I just feel this is an example of us continuing to build trust with our principals and our teachers and letting them know we value what they've done going above and beyond what I think other staff has done in this county," he said.

A deal is a deal

While Martin said teachers and staff have his full support as well, the union contract was voted on and they "should take responsibility for it."

OEA President Jim Gibbons offered a different perspective.

"Things have changed and things do change. When we negotiated in May this agreement we were working under the assumption that the foundation grant or fund equity was well below 10 percent," he explained. "It turned out through cost savings of winter and spring last year that wasn't the case. That's a pretty major factor in what I would take to my members in the OEA."

Gibbons reminded Martin that when the district needed help financially, the teachers union agreed to open up its contract.

If teachers and administrators gave up the 2 percent, Gibbons said the fund balance would "literally be grown on the backs of the teachers and administrators."

"That would do serious damage to the trust the teachers have in the school board and central office administration," he said.

Martin was not alone in his fight. Shumaker also believed they should adhere to the contract that was signed and make sure they are "fiscally sound." If things turned out okay next year, Shumaker said she'd be willing to discuss a potential raise then.

"Part of the trust is that it has to work both ways," she said. "You can't just keep your word when things are good. Sometimes you got to keep your word when things don't turn out so good,either."

Regarding the fear that a lack of trust on the part of teachers and administrators could develop, Shumaker said she doesn't see it.

"Knowing we all made the agreement with right and good intentions, I believe they all did as well," she added. "I just don't believe our employees are the kind of people who are going to turn around and not have disregard for us or lack of trust because we kept the agreement. I just don't think they're that way."

Keenist said they need to take the focus off the $400,000 deficit and focus on the value of the relationship with the OEA.

"The value of the relationship we have with the OEA is worth a lot more than $400,000 to me and I can't begin to put a price tag on that," he said. "After what Jim (Gibbons) just said there is going to be some erosion here. Is it worth it? I don't think it is. What they did to open up the contract was unprecedented. What we are voting to do is not unprecedented. I think it's logical."

Board President Colleen Shultz agreed.

"I served on the board for 15 years. We've had an outstand relationship with our union from what I hear of other school districts. It's been a give-and-take the whole time," Shultz said. "They've never protested, they've never worn shirts to school. I am not willing to penalize them right now when I feel the risk for me is worth it."

Trustee Jim Reis also didn't see it as a big risk. either. "I see next year we have a new partnership with Weiming (Education Group). I see next year student growth. I know it's not a guaranteed . . . I just have hope that this is going to happen," he said.

Martin disagreed.

"We had to agree to a balanced budget this year. That potential concession (of $470,000) was part of our balanced budgeting procedure. That was a number in there. If that number weren't in there we would have to find it from some place else. We struggled for months to get to the point where the budget balanced. It's because of that number," he said. "Now we're taking that number out and saying we're giving up on a balanced budget. I am not going to give up on a balanced budget."

"I think that's why we're here. That's why this board is here, that's why the board agreed to this," continued Martin. "Now, we're saying we will go into deficit spending. I will not go into deficit spending. That wasn't the point of all of this."

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.
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