Lindbergh Board of Education members began considering about 150 proposed budget reductions — including the possible elimination of more than 40 positions — during a three-hour workshop Saturday.
The roughly 150 cost-cutting recommendations — encompassing reductions in paid services, supplies and expenses and the possible elimination of 44 administrative, teaching and classified positions — were formulated by eight committees charged with reducing the school district’s expenditures by more than $3.9 million.
Board of Education members will continue their review of the proposed budget reductions during a second workshop at 8 a.m. Saturday, March 6, in the Anne Morrow Lindbergh Room on the high school campus, 4900 S. Lindbergh Blvd.
Board members look to take final action on the proposed budget reductions for the 2010-2011 school year when they meet at 7:30 p.m. Tuesday, March 9.
Before board members began their review of the proposed budget reductions, Chief Financial Officer Pat Lanane presented an overview of the district’s financial situation, noting cuts totaling more than $2 million were made for the current school year, including the elimination of the district science coordinator and district math coordinator posts.
Board members also heard from four representatives — Pat Otto, John Rahoy, Julie Knost and Marsha Dang — of the eight budget-reduction committees. The four responded to questions from board members regarding the budget-reduction process and the rationale for recommending the cost-cutting measures.
While the goal was to reduce next year’s expenditures by roughly $3.9 million, Lanane said that target has increased by more than $800,000 as a result of a decrease in interest earnings.
The updated reduction target is $4,716,237 while the recommended budget-reductions total $4,725,092.
After a page-by-page review of the roughly 150 recommendations, including the possible elimination of 44 positions — 33 teaching positions, two administrators and nine classified staff members — board members requested some additional information before the next workshop.
Board members expressed concerns about the number of teaching positions recommended for elimination and what impact that would have on class sizes for the coming school year.
Board Vice President Vic Lenz said, … As I look through this, I see eight high school teaching positions. I see four elementary teaching positions. I haven’t been able to add up the middle school ones yet, but our enrollment is not going down. It’s going up. So how is this going to affect our class size … What’s our class size going to look like at each level next year with this because eight teachers out of the high school — I mean we’re running some large classes over there now in some areas, and I hate to see what that is going to look like …”
When the budget-reduction committees assembled for the first time in January to begin their work, Lanane 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 zero-percent salary increase would cost $382,400 while a 2-percent pay increase would cost $1,117,400.
On Saturday, board President Ken Fey said he wanted to know if district employees would be willing to accept less than a 2-percent salary increase to save programs and jobs.
Fey asked Lanane, “Pat, I have a general question that ever since you sent me this, I’ve been wrestling with. And I’m going to make some statements here and then I want you to make sure that I am making the correct statements. I want you to clarify anything here and then I’m going to ask you a question. And I’m going to need this question answered before I can even look at some of this stuff because I think it is a huge question … I know everybody in this district is going to tighten their belt. Everyone is going to look at their supplies, their expenses, every cost they can. They’re going to cut where they need to cut. But in the scheme of things, some of those are pretty relatively small dollars. So these comments I’m going to make and this question I’m going to ask you is going to center around large dollars …
“OK, the clarification that I need: Employers and employees look at compensation as salary and benefits. I’ve never seen the two separated when talking about compensation. So if a benefit cost goes up to the employer and he or she does not pass that benefit cost on to the employee, in effect is that not a raise or a raise in compensation to the employee?”
Lanane said, “I think you have to call it a raise in compensation …”
Fey said, “So since there was a cost hike in some of the district’s benefits and it was not passed on to the employees of this district, is that not actually in effect as little as it may be or as big as it may be, is that not … a raise to the employee?”
Lanane said, “I think you have to look at it that way.”
Fey continued, “OK. Over my seven years on the board, I’ve sat in a few meetings with almost all the district employees and I’ve heard one thing loud and clear: Please do not mess with my benefits and we would not like to pay any more for them. Now I totally understand where all these employees are coming from because I’ve said that very thing to my employer many, many times. But by that fact alone, will not the employees of this district have somewhat of an automatic raise starting out at the starting gate?”
Lanane said, “Exactly. On Jan. 1 of next year, there’ll be a 4.5-percent increase on the medical, which is the biggest of the insurances. And depending on how we treat that, if it’s like in the past — and I’ve been here 18 years and through five or six negotiation rounds — that has always been picked up by the school district. And that was an additional cost and it certainly was an increase in the compensation package of the employees.”
Fey said, “OK. Now on top of everything we’ve looked at in this budget, there is a 2-percent increase in compensation for everyone in the district.”
Lanane said, “It’s actually a little more than that. That would be the average that an employee would see. Some would be seeing much more than that.”
Fey said, “… Well, we’ll just keep it at 2 percent to make it easy. In light of this fact that there are over 40 employee positions being looked at to be reduced, A, can the district afford this 2 percent and is it fair to the employees being asked that are going to maybe have to give up their jobs? Now as a community member and as a taxpayer, I value all employees, not some. Now I do — I’ve sat here long enough — now I do understand that this district has to be competitive with the work force around me and we do want to retain all the wonderful employees that we have now.
“So here is my question that I need answered: I believe there is compromise in everything as shown about what happened last spring. So I will need to know from all — not some — all district employee groups if there is any room in reducing this 2-percent increase number. A 1 percent or even a half percent reduction in this number could save programs, positions, jobs — I don’t care what you want to call it. For me, I’m going to have to know that answer first and you’re going to have to go out and ask these employee groups.”
Lanane said, “We can do that.”
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.
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. Officials plan to further utilize district reserves to cover the increased deficit, and projections indicate those reserves will drop to roughly $19.5 million at the end of the current school year.
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 Lanane has said that under state law, bond-issue revenue cannot be spent on operating expenses, including salaries.