School District Hopes to do Better Job of Explaining Financial Crisis

January 11, 2010

Olathe School Board members have tough financial decisions to make, and the outcome could cause concern among parents, students, businesses and residents.

Board members hope to ease those concerns, or at least better explain the situation, by beginning an informa tional campaign throughout the school district.

“We have to let the community know that it’s very serious,” board member Kevin Gilmore said Thursday during the board’s monthly meeting.

Public schools in Kansas could face more budget cuts with the state’s declining tax revenue collection. This comes on top of funds school districts lost last year.

Olathe’s losses started in the 2008-09 school year with the decrease in per-student state funding. The school district watched that funding decrease from $4,433 per student to the present $4,012.

It also lost $5.4 million from the county sales tax for public education. That tax now goes toward funding public safety.

In all, the district lost $19.28 million in funding last year.

The district was able to handle the first cuts in state aid last year, $7.86 million, and the loss of the county sales tax, Superintendent Pat All said.

As for the most recent cuts in state aid, $6.02 million, “that’s not resolved yet,” she said.

With the Kansas Legislature expecting more revenue shortfalls for the remaining half of the 2009-10 budget, and a $300 million-plus shortfall in the 2010-11 budget, the district is preparing for more budget cuts.

Economic realities put many aspects of K-12 public education at stake, All said, including student success, the quality of schools and quality of life within the district.

“Quality of schools has been an economic driver in the community,” All said. “This is at risk if we face long-term funding challenges.”

The district has made several cuts to offset the financial losses, including a reduction in counselors, support staff, paraeducators and administrators. It also has increased class sizes and implemented en ergy-saving measures and other operational changes to save money.

In those decisions, All said, the district always put students’ education first.

The district still maintains high education results. The average student ACT score is 23.3, which is a record high for the district and is above state and national averages. Assessment tests remain above state and national averages.

The continued increase in students each year, however, compounds the problem.

“Some businesses can downsize because they’re losing customers,” All said. “Our customers are increasing.”

What’s also grown is the number of students eligible for free or reduced-price lunches – one in every four district students are in the program, All said.

Many of these students are English Language Learners, for whom the district must add resources to ensure they receive the same education as other students in the district.

“We are doing more with less and taking more responsibility with fewer people,” All said.

The school does have reserved funds, but the board is reluctant to spend the funds and state law restricts the spending of other district reserves.

Operating reserves are $ 7.2 million and there is $9.75 million in a contingency reserve, which is maintained at 6 percent of the district’s total operational costs for its bond ratings. Self-insured funds, which are restricted by law, are $3.345 million, and other restricted funds have $8.656 million and $6.805 million in them, respectively.

All said the district already has used some of the funds to offset costs. However, the district’s monthly payroll is $15 million, which is 86 percent of the operational budget, and reserves wouldn’t last long.

Gilmore said the d istrict could spend those monies, but if the district suffered a catastrophic event it would have pay for it out of operating funds.

Gilmore said he would like the Kansas Legislature to allow school districts to have more control of local funding, lessening restrictions on how money is raised and spent.

He doesn’t think a tax increase would solve the problem.

“We have to make this a business friendly environment,” he said.

The creation of jobs and an improvement in the real estate market will improve the economic situation, he said.

Board member Harlan Parker said he wants the public to know that the last two bond issues will not help the district with operational expenses.

The school district has $137.85 million in construction bonds and interest.

“We are not sitting on funds that can solve this shortage,” All said.

State law only allows the district to spend that money on bond issue projects.

“You see big numbers like this and say, ‘What’s the problem?’ ” Gilmore said.

The district wants to explain the current financial situation and seek support from the community. District administrators plan to schedule town hall meetings for parents and residents, meet with businesses, civic, parent and staff groups, and continue to meet with local state legislators.

They also will increase the flow of information sent to students and parents and information on the district’s Web site.

Parker said this is important because the board will have to make some tough decisions based on the current funding situation and he doesn’t want to see a public backlash.

“They need to advocate for public education and they need to support the board,” he said.