Chappaqua school officials noted that the district is facing a challenging financial picture for its upcoming 2013-14 budget.
To convey the severity of the problem, administrators presented an outline of the district's rising costs at Thursday's school board meeting (the presentation can be found here). It included a look at a "rollover" budget, which is not an actual proposal for the following year. Rather, it is a scenario to show what would happen if existing costs are maintained and mixed with new ones.
John Chow, assistant superintendent for business, described the rollover budget as a "placeholder."
“It's really the first look," he said. Chow noted that there will be cost cutting for the actual budget.
Data presented for the rollover show that employee benefits are the highest cost, assuming a hike of 12.2 percent, or $3,040,097. This includes a health insurance cost increase of about three percent, Chow said. The contribution increase figure for one pension fund, the employee retirement system (ERS) is known - it has a 2-percentage-point increase, but the data for the teacher retirement system (TRS) is not at this time, Chow said. However, he noted that it will probably increase by more than 4 percentage points.
Salaries are another big cost driver and the scenario assumes an increase of $1,587,084, or 2.7 percent. Chow noted there is a big unknown for personnel: right now district does not have a new contract set for the next school year with any of its unions.
Overall, the rollover scenario shows costs rising by 4.6 percent, or $5,168,146. In order to balance the budget at that level, however, the tax levy would need to rise by 5.3 percent, or $5,327,797.
Such a levy would be problematic because it far exceeds that state-mandated tax levy cap, which is the lesser of two percent or the rate of inflation, although districts can go higher due to exemptions such as paying for some pension costs and changes to the local tax base.
Chow told the school board that the upcoming proposed budget will stay within the cap.
Board members worried about the district's fiscal situation and how it would affect educational quality.
School board president Victoria Tipp noted that the rollover scenario shows the district “just treading water.”
“It's not adding anything new at all to our programs, nothing at all," she said.
Superintendent Lyn McKay noted that the district has been able to keep all of its programs, but even that will be a challenge in the future given financial outlook.
“We're in a good place now despite all the cuts," McKay said about programs, adding that what happens in the next 3-4 years is "highly dependent" on the numbers that come in.
McKay noted the objective the district faces in trying to balance its fiscal situation with keeping its programming quality, something that the school board enshrined in its "strategic questions," which are statements meant to serve as starting points for policy.
The district has made deep job cuts over the past four school years, with 87.66 positions in total getting the ax. The district's overall work force size this year is at 605.20 jobs, according to data presented.
Talk shifted to more radical ways to improve efficiency, and thus help the financial picture improve.
Board Vice President Alyson Kiesel suggested looking into the idea of changing the grade structure of schools to the Princeton Plan model, in which students attend schools zoned by their grades instead of by geography.
Board member Jeffrey Mester suggested raising new revenue through selling courses.
“Why don't we sell our reputation instead of giving it away?”
McKay noted one such example where that could happen, as the district copyrighted its newer local student assessments, which could be used to generate revenue.
Other efficiency items brought up as hypothetical cases including online-based learning and blended grades, where classes could have a mix of kids straddling two grades.
The board will discuss the budget again when McKay presents her recommendation at its Feb. 27 meeting. The school board is then slated to adopt a budget to send to the voters, with the referendum taking place on May 21. Approval is needed in order for the budget to take effect. The district gets up to two votes, and if a budget proposal is defeated twice then it must adopt a contigency budget that would not allow for any hike in the tax levy, Chow said.