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District facing state oversight

Tecumseh Local Schools must further cut expenses and increase revenues or face a projected $1.6 million deficit and fiscal caution status in 2014, the state education department told the district this week.

While the district hasn’t been placed on the caution list, Tecumseh needs to submit an acceptable fiscal action plan to keep its ledgers and programs out of the state’s control, said Roger Hardin to about 300 of the district’s parents and employees at a community meeting Tuesday night.

Hardin is the assistant director to the Ohio Department of Education’s Finance Program Services.

ODE fiscal consultant Londa Schwierking analysed the district’s five-year year forecast and found it’s projections are accurate, she told the audience.

At the end of fiscal year 2013, the district is projected to have an unencumbered cash balance of about $117,000 — not close to meeting a payroll, Schwierking said.

The district spent more than $15.7 million on payroll in fiscal year 2012 following staff cuts and no across-the-board raises.

At the end of fiscal year 2014, its projected to have a deficit of nearly $1.7 million, according to her analysis.

“I will tell you that there are no hidden funds, there’s no magic wand, there’s no pot of gold hidden,” Schwierking said. “I’m sorry to say that this is the reality.”

Cuts and changes to several revenue streams and increases in costs such as employee benefits lead to the deficit, Schwierking said, despite $6 million to $7 million in budget cuts in the past five or so years.

Even though across-the-board raises have been frozen and employees are now paying more for their benefits, those costs are expected to remain more than 80 percent of the district’s operational budget.

Health insurance costs increased 8 percent this fiscal year and are projected to increase again 11 percent next year, she said.

Schwierking called anything above the 80 percent threshold a “danger zone” and that districts should aim to keep salary and benefit costs below 80 percent.

“Even though they’ve continued to cut staff, because the budget has also shrunk and the revenue has also shrunk, they’re staying in this 84 percent range,” she said. “They can’t seem to get out of it because no matter how much they cut, their revenue continues to get cut.”

And despite an increase in the student population of about 30 pupils this year, the district has also experienced a loss of revenue as money follows open enrollment students out of the district, she said.

Superintendent Brad Martin said Wednesday that he wasn’t sure what other cuts could be made without eliminating programs he said are important to the district.

He said the district needs to pass a new levy in addition to potential cuts.

Voters rejected an 8.95-mill operating expenses levy request in November — and seven other requests since 2004. The last time new money was voted into the district was in 1995.

“It was good to hear somebody else’s perspective and it was good that her numbers confirmed what (the district treasurer’s) numbers are telling us,” Martin said. “I think it shows that we’re in financial need.”

Audience member and voter Jerry Gracy said he thought the administration and board of education had done a good job of making cuts but thought the district needed new money through a levy.

He said he’s always voted yes on levy requests except once when he believed an income tax request wasn’t a fair way to collect district funds.

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