Even if the Marietta City Schools' five-year reorganization plan is passed, the district could still face major budget deficits by 2007, Marietta City school administrators told board members Monday.
With the district plan, the 2007 deficit is estimated at nearly $4 million. Without the district plan, the 2007 deficit is estimated at nearly $7.7 million, school administrators say.
The district plan is to close North Hills and Reno elementaries, reduce some staff positions and redistrict students. The reorganization is estimated to produce a four-year savings of approximately $3.7 million. But with deficit projections at $7.7 million, the projected district plan savings don't even cover half of the financial troubles threatening the city schools.
Ohio Department of Education fiscal representative Sam Henderson helped present the financial projections to the board.
"Your revenues are flat and your expenditures are increasing," Henderson said. "When you put the two together, that isn't good."
Henderson was invited by the board as a free service from the state to review the district's financial numbers. He said one problem is that salaries and benefits make up about 84 percent ($17.2 million in 2002) of the district's operational revenue ($20.5 million in 2002), when they should be no higher than 80 percent.
Henderson said the district should either reduce salaries and benefits or raise more revenue. If Marietta City Schools District were to run a deficit it would risk being put on the state's fiscal watch, Henderson said. Under a fiscal watch, the state would need to approve any spending by the district. If matters grow worse, the state could end up taking control of all district operations.
Upon hearing Henderson's presentation, Marietta Middle School teacher Judy Wray told school board members not to lay blame on salaries and benefits.
"If our revenues weren't so flat, then the percentages of salaries and benefits wouldn't be so high," Wray said. "If you look at teaching pay averages, our salaries aren't that great."
Marietta City School teachers make an average of $37,641 compared to the state average of $42,892, according to a National Education Association study released last year.
Marietta City Schools Superintendent Greg Backus said declining population and student enrollment have led to flattening revenues. He said the school closings and redistricting are needed to help the district become more financially efficient. Other cost savings in the plan include selling the old Oak Grove and Fairview schools and negotiating a new deal with Marietta College for costs at Don Drumm Stadium. Backus said all three properties are still the subject of negotiations.
But even if all those savings are realized, Backus said the most recent financial projections suggest the district might need to make more cuts in 2005, or place an additional tax levy on the ballot to increase revenue.
The Marietta City Schools' five-year plan also calls for improvements to curriculum and technology. But with every improvement outlined Monday - such as all-day kindergarten for the 2004-05 school year - administrators spoke with hesitancy because of the worsening financial projections.
Even the talk of new schools might need to be put aside.
"First we have to be fiscally solvent, then we can look at new schools," Backus said.
About 75 people attended Monday's meeting, including Reno parent Kurt Harrison, who presented an alternate plan to school board members Saturday. The alternate plan calls for Marietta City Schools to save its six elementaries.
Harrison said he thinks the district's latest financial projections are inflated on the cautious side.
"I'm concerned about an assumption that we would allow our health benefit costs to increase that much in four years," Harrison said.
Marietta City Schools retirement and health benefits are estimated to increase by more than $2 million, or 40 percent, in the next four years. Harrison said he hopes the district will negotiate to lower its costs the way every other employer has by passing some of the cost increases to employees.
Marietta City Schools pays 90 percent of employee health premiums for families and 95 percent for single employees.
Marietta School Board President Jeffrey Welch said the employee health benefits deal is in its second year of a three-year contract. He said negotiations on a new contract will begin in about a year.
Marietta school board members are expected to make their decision on the five-year plan during a special school board meeting at 5:30 p.m. Monday in the high school auditorium.
What's next
* What: A vote planned on Marietta City Schools' five-year plan.
* When: At the school board meeting set for 5:30 p.m. Monday.
* Where: Marietta High School auditorium.