The Archbold Area School District is looking at cutting costs through attrition of staff.
Aaron Rex, superintendent, said as teachers and other staff members retire, administrators and the school board will look at not hiring anyone new for the positions.
Instead, they will look at filling slots with current staff.
The discussion came up during the Monday, Feb. 25 board meeting after Rob Miller, a fiscal consultant with the Ohio Department of Education, reviewed an analysis he performed of district finances.
Using information from several sources, including Christine Ziegler, district treasurer, Miller pointed to some areas of concern.
Miller calculated what the district pays out in salaries and benefits to employees, compared to total income.
For Fiscal Years 2009 (July 1, 2008 through June 30, 2009) through 2011, the salaries and benefits ranged from about 70.6% to 76% of total revenue.
But in FY 2012, the last year actual figures were available, the percentage of income paid out as salaries and benefits rose to about 82.4%.
For FY 2013 and FY 2014, the percentages are projected to climb to roughly 85.6% and 88.75%.
Miller said, “The baseline you want to stay at is about 80%. When it starts creeping over 80%, that’s a danger signal.”
Two things that affect that are not only employee compensation, but also revenues. If revenues flatten out or go down, it will make the percentage go up.
“You might look first at that and say, ‘well, our salaries and benefits are just going too high,’ and man, you’re going to have the union screaming at you.
“You also need to look at revenues to look at that percentage,” Miller said.
Miller also looked at cash surpluses or deficits at the end of each fiscal year.
Last school year, FY 2012, the district spent $390,691 more than it took in.
He said school districts might say a strong cash balance will offset the losses. At the end of FY 2012, the district had more than $4.6 million in cash.
“If that (expenses exceeding revenues) is not dealt with, that doubles in the next year, if everything stays constant,” he said.
“That negative figure needs to be addressed for Archbold.”
Overspending revenues “tends to wipe out the cash balance faster than you can believe,” he said.
“On your five-year forecast, you go to a negative cash balance by FY 2016, if that is not dealt with.”
If the school district doesn’t deal with fiscal problems, it could fall into a three-phase program ranging from “fiscal caution” to “fiscal emergency.”
The emergency step calls for a commission to be formed to help a school board find where budget cuts or additional revenues will come from, Miller said.
Miller cautioned that the analysis should only be used for planning purposes.
He also said the state’s upcoming two-year budget could have some impact on the district’s financial picture.
“It’s not July 1, yet, and we really won’t know anything until July 1,” which is the state budget deadline.
“It does look good for Archbold to get some additional revenue,” he said.
“But it’s politically driven, and it can change signifi- cantly.”
Rex said the school board has not talked about additional revenue. No new property or income taxes are being discussed.
While the district may need to go to the voters for more money eventually, it wants to put that off as long as possible.
Part of that depends on the final figures in the state budget, Rex said.
Rex called Miller’s analy- sis a reaffirmation of what school officials had already seen in their own five-year financial forecast.
School administrators are “continuing to look at ways to save dollars,” which are being discussed at school board meetings.
Rex said district officials need to look at what kind of school system Archbold wants– one that covers the bare minimums, or one that gives students choices in terms of classes.
Rex said the biggest thing administrators and board members look at is keeping Archbold schools as a place where students have a chance to excel, rather than be lured away by programs such as the post-secondary option or open enrollment.
“We want the kids to be in school, to stay here” at Archbold, he said.–David Pugh