IVC District 321 officials are adjusting the school district’s operating budget to account for a “new fiscal reality.”
With revenues declining and expenditures rising, Superintendent Dr. Nick Polyak said the school board directed him to cut about $600,000 from the 2013-14 budget.
“The board said that we have fund balances for a reason and that we don’t need to cut out the entire deficit, but we need to slow it. They want us to make reasonable cuts that don’t significantly impact students.”
The district has a projected deficit of $1.28 million for this school year, amounting from a variety of sources.
Roughly half of that deficit comes from the school district purchasing land east of Illinois Valley Central High School on Bradley Avenue, next to the Chillicothe Public Library, for $630,000.
School officials have said they do not have any plans for that land except for possible future growth. For now, they are leasing it as farmland.
Polyak defended the school board’s decision, saying that the district will receive around $20,000 in revenue from leasing the land, which is far more money than investments would earn.
“It was a good decision. It was a financial win for us. We will see a financial gain (from the land) until we need it,” said Polyak. And we will never be able to get it at a cheaper price.”
After that, $500,000 of the deficit is comprised of general state aid issues. State aid makes up about a fourth of the district’s annual budget, totaling $4.5 million.
In addition to keeping the rate per student flat, the state is currently six months or more behind in payments, plus officials recently announced the state would prorate their funding to 89 percent.
It could be even worse next year as projects include the state prorating funding to 80 percent, which translates to $900,000 less for the district.
For the last few years, the district’s highest level of revenue — property taxes — has declined.
State and federal grants also have been cut and investments are making less interest.
“Everything is getting pinched,” said Polyak.
On the expenditure side, vendor and contract costs — such as food service janitorial services, office and other supplies — are going up, as well as salaries and benefits for employees.
Taking into account all of those increases, Polyak met with district faculty and staff Feb. 6 to share the “new fiscal reality” in the district.
Because 75 percent of the district’s expenses are employment related, some cuts have to be made for the next school year, Polyak told them.
No exact number is known for how many people will be affected, Polyak said, but it is “more than a couple, less than 10.”
“In some of those cases, some will be released. Some cases will be precautionary. We don’t know what our needs are,” said Polyak.
Cuts are not expected to be made to tenured teachers. Some teachers may move to different grade levels or schools or teaching other content areas. Polyak noted attrition would be used whenever possible.
Some teachers’ positions will change to a part-time status.
Those who are affected by the changes would have “one-on-one conversations” with their building administrators.
Polyak said generally April 1 is when the district notifies teachers if they will be released from the district for the next school year.
In this case, he said, by telling those who will be released and those whose status will change to part-time, they will get a head start on finding another full-time position.
Additionally, the curriculum director position will be eliminated. Jennie Hawkey, who currently holds the administrator position, is retiring at the end of this school year. Those job duties will be split among district administrators.
Officials also will audit participation rates in athletics and activities and some stipend positions will be unfilled next year.
Other cuts include different roles for maintenance/custodial staff, a reduction of hours and staffing of the four-member technology staff, as well as a reduction in supplies and capital outlay, purchasing fewer busses and changing the district’s handling of life/accident insurance.
Support staff hours may be reduced as well, but no changes are known yet.
He also told the staff that some may think the district should not go through with its planned renovations to Mossville School in order to save money. That money, however, comes from another source of funding.
“We don’t gain dollars back by not moving forward with this project,” said Polyak.
For right now, the cuts have the most impact on the older students, said Polyak.
“We’re trying to be smart about it,” said Polyak. “We don’t want to overreact.”
Looming issues add concern to school district officials
As the downward revenue spiral continues, additional problems could be on the horizon for schools.
The “fiscal cliff” that has been referred to last year with the federal government’s finances also could affect the school district’s finances.
IVC District 321 Superintendent Nick Polyak said that if the Democrats and Republicans do not come up with a joint solution, there are expected across the board cuts called for by the sequester, which means for District 321, about 8 percent of its federal funds.
Additionally, the district has the “potential” to have a lot more people eligible for health insurance under the Affordable Health Care Act.
In a district of 300 employees, the result could be hundreds of thousands of dollars to be paid by the district, Polyak said.
Add to that the continued talks by state officials of shifting the responsibility of school pensions from the state to individual school districts, and the next few years could involve changes for not only District 321 but districts around the state.