Published Wednesday, July 3, 2002
By Erin Remai
Herald Staff Writer
The Reynolds school board has a three-year plan to get out from under a $2 million deficit.
That plan includes tax increases each year for the next three years and a loan to pay back a $1.5 million tax anticipation note, in addition to staff cuts and the elimination of one elementary principal position.
Also, an investigation may soon be under way into former administrators and financial records to determine why the deficit came about.
At a special Tuesday board meeting, the board voted 7-1, with Director Jeff Colson absent, to approve a $14.6 million final budget for 2002-03. The budget includes a 4-mill increase, or 9 percent, setting total millage at 47 mills -- 141 mills under the old tax assessment ratio.
The board plans to raise taxes another 4 mills next year and 5 mills the year after that.
School Director Barry Nelson, a teacher in the Commodore Perry school district, was the only one who voted against the budget.
"I'm concerned about the huge staff cuts involving people who work directly in the classroom with the kids," he said, adding he felt some "less important or non-important" items that made it to the final budget should have been cut. He also said the tax increase was too high.
"A tax increase is necessary, unavoidable this year, next year and the year after to get us out of the financial quagmire the past board and administrative team left us in," he said. "I feel we should have spread it out over five years to soften the impact ... I don't disagree we need a tax increase, I just disagree with how high this increase should be and the period of time."
A mill is $1 for every $1,000 of a property's assessed value. Each mill brings in $78,000 -- or, at a 90 percent tax collection rate, $70,000 -- for the district.
Last year, Mercer County commissioners changed the property tax assessment ratio from 33.3 percent of a property's 1970 market value to 100 percent, decreasing all millage to a third of its former level but keeping dollar amounts intact.
In the year following a ratio change, school boards cannot raise taxes more than 10 percent without court approval. The board had previously filed a petition in Mercer County Common Pleas court for 12 mills, which would have been a 28 percent increase, but asked for a continuance at a hearing Tuesday morning before Judge Francis J. Fornelli until the budget was voted on last night. Now that the budget has been passed, the petition will be withdrawn.
At the hearing, Fornelli also approved a three-year plan by the board to pay back a $1.5 million tax anticipation note originally due on June 30 with a three-year loan through First National Bank. The board approved the loan later at the meeting. Interest on the loan, which is at 85 percent of the prime rate, will be set at 4.038 percent for the first year.
Fornelli approved the plan on the condition the board appoints an audit and finance committee to work closely with the superintendent and business manager on financial matters. The board, which already has a finance committee, appointed an audit committee last week.
Fornelli said the three-year plan appeared to be a wise choice because taxpayers won't have to pay an enormous millage increase all at once and the school board can react to financial situations each year, such as declining enrollment and additional state and federal funds.
"I approve of the school board's attempt to solve the fiscal crisis over a three-year period ... instead of trying to swallow the camel all at one time, you can do it in three bites," Fornelli said.
Teacher furloughs will not be announced until the next regular board meeting on July 24, but directors voted unanimously to furlough elementary Co-Principal Brian S. Bronson. Bronson has been with the district since 1999.
The public had been questioning cutting teachers while retaining four principals in two buildings since staff cuts were announced. Another administrative position, director of curriculum, was cut last week.
"I will vote for this with regret," said Director Elizabeth Schuffert. "This came as a result, obviously, of the community wanting it and the REA (teacher's union) calling for this. It became a matter of fairness. We are furloughing teachers, so it was fair to furlough yet another administrator. I just consider this a very big loss."
Fornelli said last week he encouraged board members to launch an investigation into the business practices of former Superintendent Dr. Charles M. Cagno and former business manager John Simon. A study by the court-appointed Keystone Research, Inc., Greenville, revealed Cagno had spent a $2 million surplus during his two years in office. Simon quit recently, without notice, in the midst of preparing the 2002-03 budget.
Superintendent Dr. Anthony Trosan said a claim has been filed with the district's insurance carrier to begin an investigation into financial records, and the state Auditor General's office has been contacted.
The board has received more than 20 applications for the business manager position. Trosan said the board personnel committee has begun screening candidates and hopes to hire a new business manager this month.
Reynolds budget at a glance
Here is a breakdown of Reynolds School District's proposed 2002-03 budget of $14,613,798 with current-year figures in parentheses:
Spending:
» Instruction -- $7,777,814 ($8,121,960)
» Support Services -- $4,287,707 ($4,543,283)
» Noninstructional -- $305,648 ($346,077)
» Capital expenses -- $0 ($0)
» Other expenditures and financing uses -- $2,242,629 ($1,217,033)
Funding:
» Local taxes, including a 47-mill real estate tax levy -- $5,771,700 ($3,877,585)
» State funds -- $9,724,098 ($8,783,086)
» Federal funds -- $117,500 ($78,084)
» Fund balance -- $0 ($955,033)