The Clay Community Schools Corp. can probably operate in the red, at the present level, for just one more year, Supt. William Schad told the school board Thursday night.
"Then, it's time to pay the piper," he said.
The school board is already considering seven options to balance the budget. He added an eighth option Thursday.
The seven options are:
- Reduce current staffing loads (reduce staff through Reduction In Force action) and then cut programs and curriculum offerings
- Close facilities (school buildings)
- Utility cost management
- Insurance cost management
- Staff investment strategies
- Review the need for extended contracts
- Charge for extra-curricular activity participation
To the seven, Schad added an eighth option Thursday night: a tax referendum to raise school revenues through increased taxes.
However, Schad thinks the solution is to be found in not one, but a combination of options; some options which may not even be considered yet.
"I don't see any one option doing the job," he said. Schad proposed either a long board meeting or a work session with the public and teachers to discuss which options should be taken to assure the school corporation doesn't run out of money.
Schad was asked by Board Member Terry Barr if the corporation's efforts were only making "small dents" in achieving financial solvency.
Schad replied in the affirmative, saying it is not enough.
The superintendent and Board Member Steve Grigsby addressed rumors of school closings by saying that no school is being targeted for closing despite many rumors circulating through the community and they oppose closing schools.
Grigsby said he could not support the idea of closing neighborhood schools because children attending those schools feel a part of the school and they learn much better than if they were transported to a school some distance from their home.
He used the illustration of students and parents who walk to neighborhood schools for evening programs. He fears that some students would not be able to attend if they had to rely on parents driving them to school. Some neighborhood schools are in areas where families cannot afford two cars and if a parent has to work, the child may lose his opportunity to attend after-school activities.
Students will lose interest in school and in learning if they cannot participate in those activities, Grigsby said.
Schad said closing schools is not enough. If that avenue is chosen, the buildings must be sold so maintenance is no longer an expense.
Grigsby said closing schools would increase transportation costs and ultimately lead to new construction costs, for students moved out of a closed school must still be educated.
Schad disagreed, saying the corporation may have enough space in existing schools, if a building is closed.
Wages, benefits and unfunded pension liability is where cuts must be made, Grigsby said.
Grigsby and Schad agreed 90 percent of the school corporation's financial burden is in wages and benefits. School buildings and other expenses comprise only 10 percent of the budget.
Grigsby wants to see the corporation better manage its unfunded pension liabilities.
"It was illegal to escrow money to pay for unfunded liabilities until two years ago," Schad reminded the school board, but, "We have something in the works that we will bring to the board" to solve the problem.
Relief may be found in companies like Met Life that buy out unfunded liabilities in such a way as to make the debt manageable for school corporations while preserving teacher pension programs.
Grigsby pointed to Spencer-Owen Community Schools' experience, where Grigsby teaches.
Met Life's program solved that school corporation's unfunded liability pension problem and the school corporation changed the wording of its agreement with teachers in such a way as to avoid the problem in the future, while satisfying teachers' pension needs.
The solution is "good for the school corporation and good for the teachers," Grigsby said.
Clay Central Office personnel are investigating such a program to benefit Clay Community Schools.
"I'm very pleased to hear Mr. Schad and Mr. (Randy) Burns are looking into this," Grigsby said.
Another option mentioned by Schad is reducing programs. However, if programs are cut, those students must attend other classes and "class sizes grow tremendously," Schad said.
Increased taxes are not likely to be approved, so "we can only cut expenses," he said.
Schad believes that when the public has the opportunity to express their concerns in public meetings to be scheduled in October, the public will say, "We really believe in neighborhood schools," and may come up with ideas to achieve solvency the school board and administration have not yet considered.
Board Member Ted Jackson suggested public meetings be held in both ends of the county and people who cannot attend be encouraged to give their input in writing. Such meetings are expected to be scheduled soon and will be publicized in The Brazil Times.
All seven school board members were in attendance at North Clay Middle School Library Thursday night including Terry Barr, Len Fischer, Jim Guy, Ted Jackson, Joe Thomas and Steve Grigsby. Dottie King arrived late.