Twenty-three position eliminations, cuts to alternative education programs, furniture and supplies, and paying only interest in the first year of debt on the middle would help the Concord Board of Education reduce its budget by millions.
Yet taking those steps still leaves another $13 million in spending to be eliminated before the school board reaches its goal of a 5% tax rate increase, Business Administrator Jack Dunn told members this week. The board will discuss further options to shave down costs on Monday.
A drop in revenue coming into this year, both from shrinking state funding and from the board’s use of reserves last year to plug surprise budget holes from insurance and special education costs, means the district started budget season needing to dig itself out of a roughly $7 million revenue hole. Expense increases, driven by a combination of salaries, health insurance, student services, utilities and debt widened the deficit by another $10 million. If adopted without deductions, residents would face a school tax increase of more than 20%.
“We’re getting very close to a flat budget…” Board President Pam Walsh said Wednesday.
Finishing the thought, Dunn added, “…and you still aren’t going to be able to – it’s going to be very hard to – accomplish five” percent.
The next wave of reductions will be more dramatic.
Administrators have proposed consolidating SAU offices into Concord High School, while potentially renting or selling their current home at the former Dewey School. Another $2.5 million in staff cuts would eliminate 20 more positions.
Excluding any building sales, consolidating offices and making those further staff cuts still leaves the projected tax rate increase at a more than two dollar increase, or about 14.5%. The board has given itself another meeting to make reductions before posting a proposed budget for public hearings. With those additional proposed deductions, Concord’s school board would need to find another $6,650,000 to reach a 5% increase in the local school tax rate, according to an estimate from Dunn.
The new schedule includes budget workshops on Monday and Wednesday and public hearings on March 23 and 25. Budget approval is slated for the end of the month.
Concord isn’t alone in staring down rising insurance, salary and special education costs, but was hit especially hard over the last year. A final payment to School Care, its insurance risk pool, will run into the current budget. Its revenue hole, as well, puts it in a particularly tough budget position.
Here’s a closer look at the reductions currently under consideration.
Staff cuts
Potential personnel cuts have been presented to the board in two slates, and the board appeared ready to approve the first round.
Those 23 positions would hit Concord High School and the elementary schools as a whole the hardest, at seven positions each. Central office staff would also be reduced by five.
The second round of potential reductions, which the board discussed in non-public session following Wednesday’s meeting, could reduce staff at the high school by another nine people, with six reductions at the middle and elementary levels as well. While specific positions are not delineated, the second slate includes positions with higher pay and benefits.
Freezing empty positions is often the first step of staff reductions, preventing explicit layoffs. Of the 43 positions total under consideration so far, only nine are currently vacant or will be from upcoming resignations or retirements.
If both slates are cut, it would reduce spending by $4.3 million, budget documents show.
Debt, Second Start and supplies
The district is planning to start with an $80 million bond for construction on the $155 million middle school. The board is now leaning toward a debt structure that would include no payment on the principal in the first year.
While this adds to the overall debt cost in the long run, it would blunt the impact on tax bills this coming year, when other major city capital projects like the police station are in the mix.
The exact figures wouldn’t be known until after the bond is issued, but documents indicate that the net cost reduction from this move will be more than $4 million for the coming year.
The board had anticipated covering some of the first-year debt with reserves, so not all of that savings translates to progress on lowering the potential tax rate.
When it comes to programs and supplies, administrators proposed a list of items – from math books to instruments to gym equipment, furniture and new tech – that could be pulled.
One of the larger program cuts would be in the district’s participation in Second Start, an alternative high school program often utilized by students who have struggled in traditional classrooms.
Students already involved at Second Start wouldn’t be disrupted, Superintendent Tim Herbert explained, but the high school would look to create an in-house program and not send new placements.
Buildings
The board is contemplating moving district offices from the former Dewey School into Concord High School. Annual savings on maintenance and utilities would be a few hundred thousand dollars.
At a minimum, the building could be hibernated, but the board could also look for a tenant to rent it or seek taxpayer approval to put it on the market.
It’s not certain that, even if taxpayers signed off, a building sale could materialize within the next fiscal year.
Meanwhile, the district is assembling a committee to guide sale options for the Eastman School, which voters approved in November. A timeline for the sale isn’t clear.
The Eastman School sale was initially eyed as a way to offset middle school construction costs, which would hit harder next year.
Editor’s note: This story was updated to include budget estimates from Concord Business Administrator Jack Dunn.