Simpson calls financial plan ‘a measured, tactical retreat’


Superintendent Jim Simpson termed the Lindbergh School Dis-trict’s long-range financial plan “a measured, tactical retreat” during a Board of Education budget workshop last week.

Cognizant of the financial difficulty residents and businesses currently are experiencing, district officials pledged last November not to seek a tax-rate increase for 24 months.

Though Lindbergh also faces financial challenges as a result of the current economic recession, the district’s reserves of nearly $25 million are the reason why the situation is not a crisis at this point. The long-range financial plan calls for a planned spend down of those reserves with a deficit-spending cap of $3 million per year.

During the May 19 budget workshop, Chief Financial Officer Pat Lanane told board members the district is following that financial plan.

“… I would point out probably the most significant number is this number ($3 million) because that’s what we’re planning for. That’s kind of what we’re planning against — that $3 million spend down of our balances. At some point in the future, that has to get back to zero. We have to get back to that,” he said. “In the meantime, using these funds that this board and previous boards had so wisely put in abeyance for this rainy day — and it is pouring — we will spend those funds. That’s what they were given to us by the public to do and now’s a good time to utilize those. But only in a limited fashion and very much on this disciplined approach that you all have adopted.

“But again, the bottom line kind of is someday we have to come back and we have to address this either in the form of some sort of tax increase or failing that in the future, $3 million of additional reductions …,” Lanane said. “We still are very much on this track of a deficit that would allow us with a 23-cent increase to get even. It doesn’t put you ahead, but it gets even at 23 cents, and that again has been our adopted plan … We kind of planned our work here and now we’re working our plan. Year one, we’ve accomplished that and this would take us into year two.”

After board members gave tentative approval to more than $2 million in reductions for the coming school year, the chief financial officer noted that the preliminary budget contains a few bright spots, particularly salary and benefit increases for employees.

“… As you look at it, of course our No. 1 accomplishment looking at next year would be the salary and benefit increases,” Lanane said. “We have been able to in spite of these terrible economic times maintain our benefit package for all the employees and, of course, that goes up a little bit every year.

“But that will continue intact and that’s not a small thing. You will be providing increases for staff …,” he said, noting the total compensation package increase totals roughly 3.28 percent. “So that’s extremely positive. Many, many employee groups would love to be in that situation to know that their benefits and salary package is going to increase over 3 percent. And it does keep us in the race (with other school districts). It isn’t necessarily where we want to end the race over the next five years, but it keeps us in the race, and I think that’s extremely positive …”

Board Vice President Vic Lenz, a retired district administrator said, “… I hate to say this, but when I look at that long-range sheet and we’re talking about staying at a $3 million deficit again next year, there’s certain costs that are going to go up and we have to look at salary and that’s obviously going to be something.

“So these are just the top cuts and guys, start looking because the hard ones are yet to come. I mean I lived through this back in ’88, ’89, ’90. (Board member and retired district educator and coach) Don (Bee) lived through it, too, and that’s when it really gets tough is the next year or two,” Lenz said.

Lanane said, “You’re exactly right …”

Lenz said, “… For all of us, it’s going to be tough.”

Board Treasurer Mark Rudoff said, “… Some of these (reductions) weren’t easy today.”

Lenz said, “… These weren’t easy, but the next ones are going to be that much harder.”

Lanane said, “You’re absolutely right and (Director of Accounts) Kathy (Wood) and I and Dr. Simpson, we kind of run ahead of the rest of the people in the school district. We’ve talked about next year.”

Lenz said, “That’s all I’m asking you to do is keep running ahead …”

Lanane said, “The items that will be on the table for next year will be — these are harsh — will be more harsh unless something dramatic turns around in a non-reassessment year. It’s very, very hard for me to imagine that especially since we’re on nobody’s list for stimulus money.”

Lenz said, “I just hate to throw a wet blanket on your comments, but the blanket’s there …”

Rudoff later said to Lanane, “… Thank you for wisely choosing not to impact the number of our SRO (School Resource Officer) officers …”

Lanane responded that he was uncertain about whether that would be the case next year as “all items will be back on the table. We felt that they have provided a great level of safety and protection and comfort for both our students and our parents.”

Board President Ken Fey said, “Well, I had the same kind of comment. I had seen in the past reductions in like counselors and social workers, but we looked at all that and felt that we were either ‘A’ OK there or ‘B’ we just could not do without them?”

Assistant Superintendent for Personnel Services Rick Francis said, “They provide such a service for kids.”

Simpson said, “… This is a tactical retreat, a measured, tactical retreat … and we’re pulling back $3 million a year. As you can imagine, the only medicine to end that tactical retreat is new revenue, and so every year we have to implement the harsh medicine of $3 million more down, $3 million more the next year and $3 million more the next … The point is the measured, tactical retreat is the way to because we save — and it goes back to the counselors — and we’re trying to save, or as we talk in the cabinet, keep as many people in the lifeboat as possible.

“And so we’re really looking to keep as many programs in the boat, as many people in the boat as possible — plan for time and that plan for time is plan for new revenue … I know the state is in terrible financial shape, living off stimulus money for the next 24 months. When that runs out, it’s going to be ugly.”

Lenz said, “If we think we’re hurting, the rest of the state that’s depending on state money for their schools, they’re going to hurt a lot worse.”

Simpson said, “Then you go to our biggest source, our main source is our local wealth, but in terms of our property and personal tax, it seems like when is that going to go the other direction is anybody’s guess. But for the first time in my career, it seems like there’s an array of forces designed to make sure those don’t go up … There’s nobody in Jefferson City that would tell you: ‘I’m all for making sure schools get a good, healthy cut of the tax base. I wouldn’t want that to go down.’ There’s nobody (saying) those words. Everybody wants to jump on the bandwagon of ‘I can help your taxes go down.’

“And I understand that. That’s because they have escalated through the bubble over the last decade and gotten so high. Most people’s houses are worth more. Then people are getting to the breaking point and so all the politicians then line up to be the savior of those people.”

Lenz said, “They line up because they get elected by saying that.”

Simpson said, “… The elected assessor (for St. Louis County) that’s going to be on the statewide ballot, I’ve never thought of the whole state voting on one county’s assessor, but that will occur. That’s nothing more than let’s see if we can find a way to keep property values from going up by getting somebody that is political in how they operate rather than analytical in how they operate. So all those things are arrayed in a way that what you’re hearing tonight is a tactical retreat in a measured way, and we will keep everybody in the lifeboat as much as possible.”