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Decision time arrives for Fayette BoE cost-cutting

When it comes to academics the Fayette County School System is in fine shape. But in terms of finances, 2012 was the year that saw a majority vote by the Fayette County Board of Education to kick the fiscal can down the road for the last time. And 2013 will be the year the new school board will have to pick up the pieces and make historic cuts that will take effect July 1.

The first meeting of the board that features two new members is Monday, Jan. 7.

The time of reckoning for the school system’s finances came with the announcement last summer by former Superintendent Jeff Bearden that the budget for the 2013-2014 school year that begins in July would have to include up to $20 million in cuts in order to balance.

The current budget adopted last June has revenues of $163 million and expenditures of $177 million. The budget was balanced by using $14 million of what was then a $15 million fund balance.

Work by a cost-cutting committee headed by Deputy Superintendent Sam Sweat was formed during the summer and began looking at areas to reduce spending next year. Meantime, the school system stepped up its recent posture of leaving many vacated positions empty, a move that by the end of November had saved approximately $3 million in personnel dollars and is expected to save more by the end of the school year. Sweat said the school system will continue to monitor positions that are not currently filled or have a long-term substitute and will continue to monitor purchase orders and expenses.

Sweat in December summarized the cost-cutting committee’s assessment, saying the school system must see a total savings of $14-15 million for the coming school year. To accomplish this, said Sweat, personnel in central office and in schools must be reduced and the school system must be more efficient with facilities by closing an as yet undetermined number of schools.

As had been noted by Bearden last spring, approximately 91 percent of the operating budget is personnel. Sweat stressed that the personnel cuts must be strategic so the quality of the school system is not adversely affected. The budget process needs to proceed quickly, Sweat added, so affected staff know where they stand in terms of employment.

Cost-cutting efforts thus far show a projected school system fund balance for June 30 of approximately $6 million, with just over half of that amount showing up as savings so far this year in personnel. But that amount is a far cry from the historic cuts that will be required to abide by state law and adopt a balanced budget in June.

One of the items Bearden referenced last summer for possible cuts included the positions not funded by state QBE (Quality Basic Education) dollars, positions that are funded entirely by local taxpayers. All totaled, there are 350 positions funded exclusively by Fayette County taxpayers. Sweat said those positions, accounting for salary and benefits, total $16.67 million and include:

- 117 parapros at $2.925 million

- 14.5 counselors at $1.09 million

- 14.5 assistant principals at $1.3 million

- 49 secretaries at $1.23 million

- 150 teachers at $9.75 million

- middle school athletics at $250,000

- 5 parking lot attendants at $125,000 (parking fees help defray this cost)

Sweat in the presentation stressed that there is “no way we can take away that many teachers,” adding that the school system has been reducing teaching positions since 2009.

Sweat said other potential cost-cutting initiatives such as reducing central office positions at $1 million, closing at least two schools at $1.6 million, outsourcing the 152 custodians at $900,000, reducing supplements and extended day contracts at $400,000, increasing mileage on school bus pick-up points (1 mile or more compared to the current half-mile pick-up points), combining middle and high school routes and conserving fuel at $400,000, and saving $700,000 for every calendar day schools are closed. Pertaining to bus drivers, it was noted that Fayette has approximately 200 bus drivers, the state pays for only 92.

So what is the problem with school system finances that will require historic cuts? The answer is two-fold.

The first involves the budget cuts made over the past few years. While millions were cut, those sums were not sufficient to keep up with plummeting revenues.

The second answer involves falling revenues that come from two sources. One source involves the large decreases in student enrollment in the past few years that resulted in a decrease of millions of state dollars coming to Fayette County. The other pertains to additional millions of dollars lost due to falling local property values brought on by the recession.

But there will be yet another financial problem down the road in 2014-2015. If enrollment continues to decrease, as projected, and unless property values begin to climb, the school board in the near-term will be faced with even more cuts than those envisioned for the coming school year.



No one has commented on this yet, but the school budget is drastically more important than the stormwater fees we will have to pay. And yes, though the county and cities in Fayette County have passed the buck for so many years because they were afraid to raise taxes, we are about to see drastic cuts made to our schools that will affect every student in the county.

We can expect school closings, less teachers and parapros and a lot of other cuts. A lot of emotions will be shown at the board meetings, however, the board has to make informed cuts without reacting to these emotions and political agendas.

suggarfoot's picture

"Sweat said other potential cost-cutting initiatives such as reducing central office positions at $1 million, closing at least two schools at $1.6 million, outsourcing the 152 custodians at $900,000, reducing supplements and extended day contracts at $400,000, increasing mileage on school bus pick-up points (1 mile or more compared to the current half-mile pick-up points), combining middle and high school routes and conserving fuel at $400,000, and saving $700,000 for every calendar day schools are closed. Pertaining to bus drivers, it was noted that Fayette has approximately 200 bus drivers, the state pays for only 92"

Sam Sweat is in charge of a group independant of the BOE that says schools need to be closed. Why is everyone mad at the incomming BOE? Everyone must be aware that if humanly possible, the BOE will retain as much as they can. They were given a big mess by the old 3 vote block that spent us into this.

G35 Dude's picture

[quote]As had been noted by Bearden last spring, approximately 91 percent of the operating budget is personnel.[/quote]

This is outrageous. Most business plan 30%-35% of their budget to be salaries. Generous business will plan an equal amount for benefits. So personnel cost should run in the 60%-70% range. Couple these numbers with the fact that Fayette County is the lowest paying Metro Atlanta County in regard to the BoE employees, (Teachers, cafeteria workers, bus drivers etc), and we pay the highest legally allowed school tax. What does this tell us?

This isn't normal business. This is government.

You have the state supplements, ESplost, and some others that cover a lot of the general business costs (based on how we have budgeted for years). You know mix it up until caught. Remember Enron? This seems to be how a majority of schools budget now. That 90% is not something new they just threw at us.

We have been living above our means too long.

Your analogy to a business plan is not valid. In a business you have cost of materials and supplies to deliver a product. In the school system you are delivering the service of education. Teachers are the main cost to deliver that. In addition, since this is governmental accounting capital (plant and equipment) is not depreciated as an expense. It is usually in a separate fund from the operating fund. For a school system the 85% to 90% range is appropriate for salary and benefits. In your calculation benefits cost just as much as salaries. If that is the case someone making $30,000 gets $30,000 in benefits. The normal range is closer to benefits being about 1/3 of salaries if medical is offered.

G35 Dude's picture

You two make a very good point. Government is not run like a business. Hmmm...... Maybe that is part of the problem?

I think we are saying the same thing.
Of course the budget has to be balanced, by law!
ESplost was enacted by the State of GA so they could reduce their funding to it what you want, but that's why.
Fayette is the last county to have parapros and smaller class sizes too. Now that will change too!
The change is due to falling tax revenues at county level and state level. Partially due to declining enrollment.

Call it living beyond your means, call it whatever you want! Class sizes will rise to 40 or more students per class.
Not sure that is good or bad, time will tell..... And since we continue to teach to the tests, it will most likely reveal itself in SAT and ACT scores.

Find it alittle sad, we are suppose to leave the next generation a world slighter better than we had. There's alot I would give up to ensure our children's future. I'm concerned that education and/ or lack of a good education will become a bigger indicator of inequality in our society. Bigger than it already is! For the sake of living within our means!

Before jumping to conclusions, what you are NOT factoring in is the role of the ESplost money which is maintained in separate budget and used to fund a wide range of capital expenditures such as new technology, new buses, bus maintenance, building repairs, new equipment such as a/c and heating, new roofs, etc.

The ESplost allows the school system to focus it funds in salaries, all salaries, interest expense and other, non capital expense charges.

What is interesting here is the article refers to revenue atleast 3 times.... As if this was a revenue problem. During the ESplost discussions everyone said it was an expenditure problem not revenue!
Funny how that's changed

Bottom line, revenues are falling due to declining enrollment, declining milage taxes and cuts by the State of Georgia in their support of schools and we need to balance.

It is not mis-management as people want to believe and used to oust some in their elected roles. By law they must balance and as you can see it will be painful.

Luckily for all of us, the ESplost passed so what is paid for by ESplost does not have to incorporated into future budgets creating even greater deficits and most cost cutting. You can put off some maintanence issues for a while but you can't ignore them. Luckily that will be paid for separately.

We have lived above our means for too many years. The esplost allowed us to play a shell game with our budget. Those expenditures funded by the esplost are still costs of running a school. We have had past boards that were afraid to make the cuts needed and chose to raid the slush fund.

This board has been selected to make the needed cuts. It really doesn't matter if it's a Revenue or expenditure problem it's still a problem. We have lived above our means and now we have to right the ship.

NUK_1's picture

The state cuts were known. It wasn't like any intelligent person thought the state of GA was suddenly going to reverse that trend. Please.

The declining enrollment has been known for a few YEARS and it's going to go lower. Everyone knows and accepts that as REALITY.

What was done to address these two issues before it got to this point? Not a helluva lot at all and Bearden wanted to wait another year before taking the kind of drastic action that is about to happen, and surprise, he's not going to be around to have to deal with it!

The BOE did a horrendous job. Bearden was a real problem and certainly not part of the solution, and now we deal with it with hopefully a much better BOE than before and also hopefully with someone who isn't a Bearden. He knew when he took the job what was happening and didn't take action when it was needed way before now.

I don't care what anyone says, Bearden was not the problem. The previous BOE was the problem. Bearden just wasn't strong enough to make the cuts and have to work with the remaining staff that will initially feel overwhelmed.

No one on the BoE wanted to be the bad guy either. They could have been making incremental cuts and it wouldn't feel as bad. Now, people will feel they lost a limb. The past BOE manages Bearden and they didn't do it.

Our new board needs to be strong enough to listen to staff and community, then make informed rational decisions without letting emotions or politics get in the way.

I trust that our new interim supt Is strong enough to withstand the process. I believe he is.

NUK_1's picture

I agree that the ultimate authority rests with the BOE and FC has been very ill-served by several members-including two still residing on the BOE-but Bearden didn't get it done at all and I thought he did a very poor job from almost Day 1.

The time for finger-pointing is over. Let's see what can be done to correct all the horrid mistakes of the past in the least painful way possible, though there is going to be a lot of irate people out there.

Strangely enough, the FC Commission is in the same boat right now. These aren't great times for FC.

I totally agree. We have to live with the problems. I believe the interim Supt is seasoned enough to make the suggested cuts and the board needs to push harder to get there. And there will be a lot of negative feedback from parents especially with school closings and larger class sizes. I may need to get a side Job with Larry because he should be able to add some coin to his pocket.

I am worried about the commission too. I didn't go to the meeting this week because I knew it would be a zoo between the inauguration and then the rain tax. It will be interesting to see how if SB can step up and be a good leader. I have reservations about his acolytes. Not to concerned about the rain tax, as this is required and needed and is more of a PR issue in how it was passed without a better plan.

NUK_1's picture

The last 3 I went to(all where WFB was the hot topic) were enough to make me want to poke my eyes out so I obviously skipped the latest and will not be attending any in the future with the new rules in effect on even more public comments.

If person after person getting up and saying the same exact same thoughts as the person before them, and the person before them, and the person before them, constitutes "open government," hello totalitarianism and welcome!

Maybe after a few meetings drag past midnight they'll realize how dumb this idea was. No one with half a brain needs to hear the same argument repeated over and over and over and over by multiple people.

Lets just see what shakes out on this new board. Lets see who acts by making the tough decisions vs the game players!
Contrary to your belief that Bearden was not the problem, I think the real problems will be exposed on the board. Hopefully I'm wrong but we will see very quickly.

Paralysis by analysis..... So elected leaders, both FCBOE and Fayette Commission delay and avoid decision making making by continually asking for more and more and more data and reports!

Hope you are going to Monday night's Fayette Career Academy presentation. It's a real bright spot for the county!!!! At the board office at 7PM.

I am saddened to think the parapros will possibly be gone. They have such an important role in the schools. Secretaries - I can see them being cut. They have an important job, but not as important, in my opinion as the paras. The second graders will really struggle in upcoming years. Sad times ahead. I hope to get my kids out of Fayette County before it really takes a nose dive...

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