South Adams Schools could cut eight teachers because of $800,000 budget overrun

The elementary school reductions would leave class sizes between 21 and 23 students. (Third, fourth and fifth grades already have four teachers each after cuts made last year.)

In terms of personnel, the superintendent also suggested reducing the custodial staff by one position and removing a half-time nursing position.

The elimination of those positions — nine full-time and one part-time — would save South Adams $497,325 in wages and benefits next year.

If general fund spending continues at current levels, the school corporation is projected for $779,000 in deficit spending for fiscal year 2016.

“This fills a good part of it, but it doesn’t fill everything,” said Litwiller, noting that 87 percent of the general fund goes to salaries and benefits. “But yet, if we would go further with staff, I don’t have any good suggestions of where we would go that really wouldn’t affect student learning …”

Litwiller recommended that the board not continue to pay for cost overruns — South Adams had deficit spending of $393,214 in 2013-14 and will likely surpass the $700,000 mark this year — with its cash balance. 

That money has already been depleted from $2.28 million at the end of 2012 to $1.4 million, and would be in the red by the end of the 2016-17 school year if current spending levels continue.

He also noted that he does not think it’s a viable idea to use the corporation’s approximate $1.6 million in rainy day funds, which are meant to be used for one-time expenditures.

“We knew going into this school year that we would need to use cash balance to pay all our expenses,” said Litwiller. “It was true last school year. … At the end of this school year, our cash balance is going to be less than our target balance. So we need to make some changes to make sure our revenue and our expenses balance out.”

South Adams seeks to keep a year-end balance of about $1.4 million, which is equal to two months of general fund expenses.

Most of the recent budget shortfalls have come because enrollment in the school corporation has dipped to 1,215 this spring from 1,334 in 2009, with most of that decline coming in the last two years. State funding is based on enrollment, with South Adams getting $7.89 million this year compared to high of $8.52 million in 2012.

In addition to the proposed staff cuts, Litwiller said he believes South Adams should continue to work to increase enrollment and seriously consider a referendum for an additional property tax levy for the general fund. 

While not opposing that idea, Amstutz noted information she received this week indicated voters approve less than 50 percent of such ballot measures.

Other suggestions included eliminating $1-per-year health insurance for six administrators, reducing the school corporation’s contribution toward health insurance for all employees, shifting some current general fund expenditures to other funds and reducing hours for aides in order to eliminate the requirement to offer health insurance.

Board members, with Orr absent, asked Litwiller to come up with a plan for eliminating $1 insurance coverage of six administrators. They said the change should be something that is done gradually, but that it’s time to start the process.

“I’m not saying you have to do it all at one time, it’s just going to have to happen,” said board member Julie Mansfield. “We’re all going to have to give … I know it’s like taking a pay cut, and I understand that. …

“I think we’re all just going to have to bite the bullet on that.”

Mansfield also noted that she has ethical concerns with reducing hours for aides to fewer than 30 per week to avoid being required to offer them health insurance. Such a move could save the corporation nearly $100,000 per year.