Opt out panel findings include A lack of trust in Vermillion School District by David Lias A citizens' panel formed to study budget woes of the Vermillion School District and recommend whether the district should opt out of the state property tax freeze has found more than a shortage of cash.
The panel, which began studying all aspects of the school district in April, has found a lack of trust that could make the chances of an opt out vote questionable.
"It's clear that our community supports education and has been very pleased with the success that our schools have shown and our district has shown," Lisa Bye, a spokesperson for the panel told the Vermillion School Board Monday. "The community wants to educate our children well and is willing to spend some money to ensure a quality education.
"However, there appears to be a lack of trust by staff, parents and committee members of the administration," she said. "Our committee sees this as the central issue. Money is a factor, but not the cause of the lack of trust in the current administration."
The citizens' panel believes that for any opt out attempt to be successful, the Vermillion School District must do the following:
* Evaluate and restructure the administration of the school district to maximize the skills and talents of certified administrators within the costs restraints of the district's financial resources and align them with recommended educational standards.
* Conduct an annual survey to allow for district feedback and to open lines of communication. "We encourage you to establish a standing committee of citizens and school personnel as an advisory committee to the district on ways to maintain quality while increasing efficiency," Bye said.
* "We encourage you to evaluate the pros and cons of increasing the size of the school board," she said, "so that subcommittees could be established in key areas such as budget, curriculum and personnel to to provide greater citizens' involvement in key school district issues."
* The panel encouraged the school board to establish a grant committee in conjunction with outside agencies for the purpose of providing grants that will be mutually beneficial and provide enhanced funding for K-12 education.
"We understand that an opt out is necessary if we are going to continue to maintain the high standards that we have seen in Vermillion before," Bye said. "Our committee recommends that the opt out is for half the expected deficit, and for a maximum of three years."
"So you're saying somewhere in the $350,000 to $400,000
Continued on page 12
range?" school board member Nick Merrigan asked.
"Yes, I guess it's been a little bit hard for us to determine how much that deficit is going to be, but about half of that amount is what we're speaking about," Bye said.
The Vermillion School Board has already made significant cuts in the district's general fund. Without further cuts, an opt out, or a combination of the two, it could soon be facing a deficit of approximately $700,000.
"What the board wanted, and I'm sure that it more than met our expectations, was to look into the possibility of opting out of the tax (freeze) to support the Vermillion School District," Vermillion School Board President Tom Craig said before Bye presented the panel's findings.
With proposed cuts in the 2002-2003 school year, which begins July 1, the school district will have $500,000 to $600,000 left in the fund balance, Craig said.
"That is the projected deficit spending next year if we do not make additional cuts or if we do not opt out," Craig said. "At the conclusion of 2002-2003, we're pretty much going to be even, and at that point we're going to spending in a deficit which we simply can't do."
The citizens' panel was asked to work independently without the influence of the school board or the school administrators to reach its recommendations.
Craig said the panel was free to conclude that the school board should opt out for the entire amount needed, which is between $700,00 to $800,000.
Other possibilities that could be considered include opting out for a lesser amount, and making more budget cuts, or not opting out from the property tax freeze at all, and recommending more severe budget reductions.
Before the panel presented its findings, Craig reviewed past actions of the school board to deal with the daunting fiscal challenges that have grown recently in the school district.
"At the end of this school year, we had already made cuts that totaled $215,850," Craig said. "The cuts that have already been approved by the board for the school year starting July 1 and ending next year amount to $477,000."
Craig said the school board has transferred money from the general fund into the capital outlay budget. "It still saves us money in our general fund which is where we have the problem," he said. "We don't have a problem with capital outlay or the pension fund or special ed. It is the general fund."
He added that the school district, through cuts, will have saved nearly $700,000 through cuts by the end of the 2002-2003 school year.
"We still need to either receive additional revenue or make additional cuts, or do a combination of the two," Craig said.
The district's fiscal problems lie in the fact that it can't control the amount of revenue it receives, Craig said.
"The only thing that we can control are expenditures," he said. "We're pretty well tied by the state funding formula in terms of the money that we receive for education."
It's a problem that's not unique to Vermillion, Craig said. "A lot of districts are opting out, and it's because of the funding formula."
Compounding the problem is South Dakota's demographics. Families are smaller, and fewer children are enrolled in South Dakota schools.
"As we lose students, our revenue declines," Craig said. "The only way we can control our problem is to look at the expenditure side of the ledger."
In the last two months, the citizens' panel met at least once a week. Each meeting was at least two hours long, and committee members usually were assigned research assignments to gather information.
"Since April 9, our committee has studied the financial situation of the district," Bye said. "We have examined where past and current funds have been spent. Since our committee was selected to represent the community, we have had meetings with some groups of the community to facilitate input into this very serious financial situation."
The panel researched several options, from funding caps to increasing revenues. It spoke with members of other school districts, to become better informed, and reviewed educational standards to assist in determining possible job/task restructuring.
The panel's recommendations were reached after study and discussion of anticipated revenue based on enrollment in the next three years, expenses and budget cuts that have already been made for 2001-2002 and 2002-2003, and the projected shortfall that is expected in 2003 and 2004.
"I think the three years is a good amount of time," Craig said of the time limit recommended for any opt out, "and if the state Legislature makes changes that solves the problem before the end of that three years, then that (the opt out) could always be eliminated."
He asked Bye if the panel discussed class sizes in the district.
A great deal of time was spent exploring this topic, she said.
"Not once in the times that we talked with anyone did anyone ever say, 'let's get rid of teachers and increase class sizes.' If staff reductions are a necessity, Bye added, the panel agreed that larger class sizes could easier be accommodated in the upper grades rather than elementary grades.
According to community input, the district's citizens are strongly in favor of keeping its all day kindergarten program. The panel looked at extra and co-curricular activities, and is proposing the school board cut activities by 10 to 20 percent.
Craig noted that 80 percent of the money spent in the general fund is for benefits and salaries of school staff.
"I think it's important that everyone understands that when 80 percent of the budget is going to salaries and benefits," he said, "and when you're talking about an additional $400,000 to $500,000, you're talking about people."
"We understand that," Bye said.
"I think you've done an excellent job," Craig told the members of the citizens' panel. "Certainly, some of the things that you've come up with are a surprise, but I'm glad to hear all that you have presented to us. We will work with it."
Craig said the school board likely will hold a special meeting next week after reviewing the panel's recommendations.
"We would like to make a decision the last meeting of June as to whether we want to opt out, and if we do, how much we're going to opt out for," Craig said. "If we look at it and decide we want to make additional cuts as well as opting out, we need to have an idea of where those cuts are going to come from, so we have some work to do between now and the end of June."
Members of the citizens' panel include Lars and Becky Aga, Dr. Ralph Brown, Bill Brunick, Lisa Bye, Dr. Karen Card, Dr. David Day, Damian Donahoe, Dr. Jerry Engelking, Susan Jones, Rev. Steve Miller, Pat Meyers, Ric Rasmussen, John Robertson, Veronica Schmidt and Gerald Yutrzenka.