Lindbergh board eyes tax hike in wake of cutting $4.7 million

‘… For me, it’s a sad day to be a Flyer,’ Board of Education president tells crowd.

By MIKE ANTHONY

In the wake of approving more than $4.7 million in budget reductions, Lindbergh Board of Education members agreed last week to proceed with a telephone survey to help determine whether to place a tax-rate increase on the November ballot.

Board members voted unanimously March 9 to give final approval to the more than $4.7 million in reductions for the 2010-2011 school year recommended by eight committees charged with cutting the school district’s expenditures.

The board’s action eliminated 60 positions — 16 more than initially estimated — and included 45 teaching positions. Of the 60 positions, 29 will be cut through attrition while 31 certified and classified employees will be released at the end of the current school year.

The eight committees began meeting in mid-January to formulate a list of potential budget reductions while protecting student achievement. The roughly 150 cost-cutting recommendations formulated by the committees were reviewed by board members during two Saturday sessions before last week’s meeting.

Chief Financial Officer Pat Lanane has noted the budget-reduction target included an increase in employee health insurance premiums, mandated increases in two employee retirement programs and a possible 2-percent employee salary hike. Because of the increases in insurance and retirement, a salary freeze would cost $382,400 while a 2-percent pay increase would cost $1,117,400.

The amount of any potential raise will be determined based on the outcome of negotiations between the Board of Education and Lindbergh National Education Association teachers. All employees, including administrators, will receive the same pay increase as teachers.

While the goal was to reduce next year’s expenditures by roughly $3.9 million, that target increased by more than $800,000 as a result of a decrease in interest earnings, ac-cording to Lanane. The updated budget-reduction target was $4,716,237 while the recommended budget-reductions total roughly $4,725,000.

“… I know these reductions will not be received well by some community members or employees, but in the financial condition the district is in these are the actions the committees felt necessary …,” Board of Education President Ken Fey said. “Everyone should also understand, though, that the negotiations with the district employee groups are still under way. That piece of the equation may or may not have an impact on the decisions of this evening.

“On a personal note, I understand I ran for this board position. I asked for this job, but I want to let you know as a board member, I didn’t think — I probably will never be prepared for what has occurred the past few weeks and what will come in the months ahead. Programs I voted for I know will help educate students will be reduced. Valuable employees of the district will no longer be employed.

“In some cases, those employees are much more. They’re my neighbors and my friends. It has been said many times at board meetings, it’s a good day to be a Flyer. Today for me, it’s a sad day to be a Flyer,” Fey told those present.

Board members also agreed by consensus last week to proceed with a telephone survey to help determine whether to place a tax-rate increase on the November ballot.

Cognizant of the financial difficulty residents and businesses are experiencing, Lindbergh officials pledged in late 2008 not to seek a tax-rate increase for at least 24 months.

Though Lindbergh also faces financial challenges as a result of the current economic recession, the district’s reserves of roughly $24.6 million are the reason why the situation is not a crisis at this point.

The district’s long-range financial plan calls for a spend down of those reserves with a deficit-spending cap of $3 million per year. In June, the school board adopted a 2009-2010 operating budget that projected a deficit of $3 million.

That $3 million deficit was reached by making more than $2 million in reductions for the current school year.

But a further decline in the assessed value of commercial real estate — including successful appeals by commercial property owners to the county Board of Equalization — increased the projected budget deficit for the current school year to roughly $5.1 million. While the majority of local taxing districts have rolled up their tax rates through the Hancock Amendment to regain lost property-tax revenue, Lindbergh was unable to roll up its operating tax rate, which remains at the state minimum of $2.75 per $100 of assessed valuation.

Officials plan to further utilize district reserves to cover the increased deficit, and projections indicate those re-serves will drop to roughly $19.5 million at the end of the current school year. If reserves fall below roughly $13 million, the district would have to borrow money to operate.

The district recently conducted groundbreaking ceremonies for the new Concord Elementary School and Early Childhood Education Building that are being constructed as part of a $31 million bond issue approved by voters in November 2008. But under state law, bond-issue revenue cannot be spent on operating expenses, including salaries.

Asked about the telephone survey, Superintendent Jim Simpson told the Call, “… We’re at a fork in the road and we need to talk with our community about which path to take. The telephone survey is exactly that. It will ask our community: What do you think is important about Lindbergh Schools? What are the things you want to preserve about Lindbergh Schools and what do you think about paying extra to make sure those strengths stay in place? And we’re very focused on the results of that and we are very apprehensive, frankly. I know I am. I’m afraid that because this recession has touched so many people, so many families, that it’s a hard time for anybody to consider more taxes. And I know that’s actually such a negative way of even thinking — more taxes, we’re all burdened with taxes.

“But I think the Lindbergh community understands that we have national and state awards. We have the highest student achievement in many areas and many subjects in the state, and that has been accomplished on the rock-bottom, minimum state operational state levy — the lowest you can have in the state of Missouri. What a value. What an incredible multiyear value that’s been. It’s been a strong point of pride for the Lindbergh district …

“But the fork in the road is that strategy will not work in the future. It has many variables why it won’t work for us, including this recession, including the fact that we used to have a mall that was a major player in helping us finance this school district that is now barely a player …,” Simpson said.

Since the 2007-2008 school year, Lindbergh has lost more than $14 million in cumulative revenue. Given the fact that the district receives very little financial support from the state and federal governments, he said, “… There is no way to help unless we get relief with declining revenues … It’s the only life preserver that’s out there. There’s no state life preserver, there’s no federal life preserver for us.

“We have one egg in the basket and so we have to talk about that … We’re going to really be watching that (the survey results) closely and that will actually become a trigger for whether the board places an issue on the November ballot,” he said, noting the election could cost $40,000.

“But even on top of that, it’s also not wise to put something on the ballot that you know has no chance … We have to position ourselves to where we really listen to our community. Our fate is their fate. It’s one of those things that we just can’t contemplate running the district without additional revenue — revenues that basically allow us to keep what we’ve had in the past that we’ve had to dismantle with this one (the $4.7 million in cuts) and the $2 million one we dismantled last year — and if we don’t get the levy, the millions that we will dismantle the next round,” Simpson said.

“So this district actually — and this is the conversation piece — we will have to reinvent this district. We will actually have to take this district apart and put it back together and it will in no way be the same district. If we have to run the district on just rock-bottom survival revenue, obviously the district will be a different district. So we’re hopeful that our community honors this long tradition of conservative financial stewardship, appreciates the incredible achievements of this district and steps in front to say: We’ll help you out with the revenue that’s being lost for you and doesn’t seem to be coming back in any kind of real time frame.”