Cooperative’s budget is in red, cuts recommended
Marion County Special Education Cooperative board members heard some bad news and then heard more bad news Monday evening.
Director Chris Cezar informed the board that the cooperative was in the red nearly $240,000 for the remainder of this year and at least that much in the 2010-11 school year, and that Peabody-Burns USD 398 no longer wants to be a part of the county cooperative.
He explained that state funding had been reduced from $28,760 per full-time equivalent teachers and paraprofessionals in 2008-09 to $23,000 in 2009-10. There are approximately 80 in the cooperative.
State funding for special education is based on the number of instructors, not students as in school districts.
With the shortfall, the cooperative will be $460,800 short by the end of the school year. The cooperative did receive $442,000 from the federal government’s American Recovery and Reinvestment Act. Cezar suggested that amount be split over two years, giving the cooperative an additional $221,000 for this year and next year.
Even with that assistance, the cooperative will be short this year and next year.
“There will be less expenditures next year,” Cezar said, “but we will have less revenue.”
One of the ways the cooperative can reduce costs next year is to cut 3.5 teachers’ positions for a savings of $65,000.
On the heels of the concerning news, the board reviewed a letter from Peabody-Burns USD 398 Superintendent Rex Watson, stating that “due to the current financial status and recommendations of the Kansas Learning Network, the USD 398 Board of Education reviewed and discussed current program status.
“At the regular board meeting on Dec. 14, the USD 398 Board of Education would like to withdraw from the Marion County Special Education Interlocal Agreement pending approval of the Kansas State Board of Education.”
“My board was more than supportive to come to Marion,” Peabody-Burns USD 398 representative Tony Zappone said at Monday’s meeting. “We wanted to see the cooperative on a school campus, close to resources. It was very fortunate.”
Zappone continued that his school board said it would support the renovation project of the former Golden Living Center in Marion as long as there were funds for the project.
“Through each one of these steps, we were told there was money,” Zappone said, directing his comments to Cezar.
State support was all part of the formula, Zappone said. Some members of the cooperative were not in favor of the renovation because of the economic environment.
“Where’s the reassurance? To me, the buck stops with the director,” Zappone said. “I don’t know what to believe.”
Cooperative board president and Hillsboro USD 410 representative Deb Geis said a year ago we thought we knew the bottom line.
“A better answer would have been ‘I have the money but not sure what the future holds’,” Zappone said.
“It doesn’t do any good to go back,” Goessel USD 411 representative Dan Miller said. “We need to look to the future. There are five people here to do this. We’re here to serve the kids.”
Zappone said he and his school board want accountability.
“This group of five is accountable. The director works for us,” Miller said.
“Credibility is gone,” Zappone said.
State statute 72-968 was reviewed by the board. In the statute, it requires a two-thirds vote by the cooperative board to approve USD 398’s request to withdraw from the cooperative and approval by the state school board.
“The state board would take into account what USD 398’s withdrawal would do to remaining districts as well as what it would mean to the district that requests the withdrawal,” Cezar said.
Zappone clarified that Kansas Learning Network did not specifically recommend the school district withdraw from the cooperative.
“They pointed out a lack of coherence of the cooperative versus having in-house. KLN was not addressing any individual teacher,” Zappone said. “It was more of the organization.”
KLN works with districts to improve Annual Yearly Progress standards. USD 398 fell short this year in meeting those standards.
School districts are required by state statute to provide special education services to their students. The countywide cooperative was formed to provide those services.
The board met for a total of 50 minutes behind closed doors to discuss personnel with Cezar in attendance. There was no action when the meeting returned to open session.
More about the shortfall
The cooperative’s expenses for the 2009-10 school years are $4.265 million. Of that, $3.462 is for instruction, $381,000 for support services, $37,000 instructional support, $280,433 administration, $71,800 operations and maintenance, and $33,000 for student transportation and miscellaneous expenses.
“Will cash reserve cover payroll?” Miller asked.
“I’m not sure,” Cezar said.
The cooperative does not have a “reserve” but tries to carry over funds each year.
Cezar said he went line item by line item and predicted expenses for the remainder of the year. He then went through each line item of expense to try to adjust with actual expenses.
Some potential cuts for this year include a hiring freeze of paraprofessionals, custodian, and part-time secretary, and cutting the number of hours worked by OASIS paraprofessionals. Doing that, would save the district $43,500.
A potential reduction next year of teachers and part-time support staff and the elimination of holiday pay for paraprofessionals could save the cooperative $93,500.
When the cooperative board reviewed the cooperative financial history, Miller asked why some of the numbers had been changed. Cezar said they were adjusted after audits.
Part of his challenge, Cezar said, was delays in payments from the state and school districts. When the state was late paying school districts, it made the school districts late in paying the cooperative — thus causing numbers to be added to the budget later than desired.
Cezar also showed the impact of cutting teachers and paraprofessionals from the cooperative. If a teacher with a salary and benefits of $41,961 is cut from the cooperative’s budget, the cooperative will lose $23,000 in aid, giving the cooperative only a $18,961 net savings.
If a paraprofessional is laid off, that net savings is only $3,146.
“What I’m hearing is the districts should not ask for additional services between now and the end of the year,” Miller said.
“We’re at a hiring freeze,” Geis said. “My suggestion is to meet with the superintendents and get their views and ideas. There are ways to make it work. We can use recovery (federal) money this year but it means a deeper cut next year.
“We have to make it through this year.”
The cooperative board of directors decided a special board meeting before the regular monthly meetings of the school district boards would be advisable.
The cooperative board will meet at 6 p.m. Jan. 6 in the cooperative board room, 1500 E. Lawrence St., Marion.