Crunching the Numbers

The Globe statue outside of CHS. William Wysession.

Introduction:

Beyond all else, Meg Flach says she will miss the children. On Jan. 30th, Flach learned that her position as the Clayton High School District Substitute Coordinator would be eliminated. With that, she said, her time at Clayton was likely over.

During the past two months, the Clayton School District has been abuzz with discussion of District spending reforms. For three years, the District has been spending more money than it has taken in, resulting in a massive deficit. On Jan. 9th, Superintendent Sharmon Wilkinson released a list of proposed budget cuts for the Board of Education (BOE) to approve. Her recommendations would eliminate $1.7 million from the District’s spending.

In light of these proposals, many members of the community have raised the question, “What makes Clayton, Clayton?” In other words, what aspects of the Clayton District raise its educational standards above and beyond the rest?

Wilkinson and the BOE were forced to walk a fine line between balancing the budget and preserving the assets that make Clayton schools first rate.

It remains to be seen whether these budget reductions fall in line with Wilkinson’s goal of maintaining excellence in education. However, the process has revealed one uncomfortable truth to the Clayton BOE and community: excellence comes at a high price.

Background:

Although recent proposals may appear spontaneous to some members of the Clayton community, the Board of Education has been grappling with money issues since 2008. During that same school year, the voters approved Proposition S, a $51 million bond issue to renovate the high school and elementary schools. The bond issue was approved by merely two votes.

“The District has been feeling this for a couple of years,” BOE president Jane Klamer said. “When we went out to pass Prop S, it was right around the time that the economy was headed in a bad direction. The downturn contributed to the difficulties we had while campaigning.”

In January of 2010, the BOE unanimously passed Prop W, a new bond issue that allotted $39.4 million to renovate Wydown Middle School. At the time that the bond issue was passed, the District was not involved in deficit spending.

The School District of Clayton operates on two budgets: operating budgets and bond issue budgets. Operating budgets pay for nearly everything that keeps the District in motion: salaries, building repairs, supplies and purchased services. The majority of this budget comes from local taxes.

The bond issue budget is also tax based, but it is kept entirely separate from the operating budget. Because the Clayton community approved $51 million in Prop S, the District was able to renovate the high school and update classroom technology. However, every cent of the $51 million had to be allocated in a very specific way. In other words, the tax payer money that put a SMART Board in every classroom has nothing to do with District’s current deficit.

After 2008, the stagnant economy began to deteriorate several of the District’s sources of income. For instance, every January the District invests a percentage of its revenue and later collects interest on the investment. “At our high point in 06-07, we were getting a little over a million dollars a year in investment income. We’re lucky to get around $30,000 a year now because [interest rates have decreased to] 5 percent. And we’re restricted by law in what we can invest in,” the District’s Chief Financial Officer, Mary Jo Gruber, said.

Although these returns illustrate the consequences of the economic downturn, they constitute only about 4 percent of the District’s income.

Another far more significant source of revenue is local taxes. During the 2012-2013 school year, local taxes contributed to 72.64 percent of the operating budget. Unlike the aforementioned factors, the amount of money that the District receives from local taxes is held relatively constant by Missouri’s Hancock Amendment.

“The Hancock Amendment … forces us to basically keep our local tax revenue flat. We can take a little cost of living increase every other year, but barring having to go out and ask for a tax increase, our revenues are pretty much stagnant,” Chris Tennill, Clayton’s Chief Communications Officer, said.

Although the District’s operating income has decreased slightly since the approval of Prop W, Superintendent Dr. Sharmon Wilkinson believes that increased spending has affected the District much more dramatically. In 2011, the District negotiated a two-year, 2.5 percent salary increase for certified teachers.

Although this may appear to be a relatively low increase, the consequences dramatically impacted the District. Salaries and benefits account for nearly 80 percent of the District’s operating budget, meaning that a 2.5 percent salary bump has the potential to significantly raise District expenditures. Wilkinson pointed to this increase as one of the major contributors to the District’s current deficit.

Gruber described the District’s current situation as expected for a school District’s typical spending pattern. “This is the typical cycle of a … school district when you pass a levy, it’s meant to build up your fund balance and then you spend it down. Now we’re in the ‘spend-down’ part of the cycle, which is normal,” she said.

According to Gruber, 2003 was the last time the District passed a tax levy. After the levy, “our fund balances grew. The levy was projected to last for about three years. [However,] because of the new construction growth in that period, [the fund balance] grew higher than anticipated. So now we’re spending that down,” she said. In other words, the ‘spend-down’ part of the cycle has lasted much longer than the District originally anticipated. Currently, the District is in its fourth school year of deficit spending.

Since 2008, a variety of factors have contributed to the School District of Clayton defecit spending. Some factors have been driven by the economy: decreased interest rates and lack of new construction in the city of Clayton have reduced the District’s income in comparison to previous years.

However, it is important to remember that the economy did not cause the deficit. It merely exacerbated issues that the District already needed to confront.

More significantly, however, the District’s spending has increased. Counter to common misconceptions, this increase has nothing to do with the SMART Boards in every classroom or the new science labs. Rather, the money has gone towards the sometimes overlooked resources that allow the District to fulfill its goal: educating the students. In particular, Wilkinson pointed to the recently negotiated District wide salary increases.

According to Klamer, the School District of Clayton was relatively insulated from the national issue of struggling school districts.

“We were in a pretty good financial situation when the economy went down and our real estate has not lost much value compared to other places, so this process has happened much more slowly,” she said.

Regardless, the deficit caught up with Clayton, and the BOE was forced to confront an uncomfortable and perplexing question: “How do we fix this deficit?”

Administrative Perspective:

When Wilkinson’s budget cut proposals were released on Jan. 9th, 2013, one thing became evident: The Board of Education had not been idle.

According to Jane Klamer, the BOE has been investigating certain aspects of the District’s expenditures ever since the passage of Prop S.

“We have cut administrative positions every year for the last couple of years,” she said.

Last year in particular, the BOE stepped up their efforts and implemented several new strategies to approach the deficit. One of these was the long-term financial planning committee, with whom Wilkinson worked very closely.

The planning committee consisted of a wide spectrum of Clayton community members. “We had parents representing each of our schools, we had teachers representing the varying grade levels and we had administrators,” Wilkinson said.

In the spring of 2012, the long term financial planning committee created a recommendation for $935,000 in cuts to be implemented in the 2012-13 school year.

The cuts included two administrators from the District office, a certified language teacher and a consumer science teacher. Wilkinson says that the teaching positions were eliminated due to low student enrollment in certain classes.

The BOE also reduced the number of paid contract days for certain teachers and reorganized summer school programs.

However, after making cuts last spring, the committee realized that the deficit still called for more budget proposals. Accordingly, Wilkinson undertook the responsibility of inspecting every aspect of the District’s spending patterns.

“It’s Dr. Wilkinson’s job as the superintendent to know the system better than anyone else,” Klamer said.

One of Wilkinson and the BOE’s primary strategies was to examine other school districts that were comparable to Clayton, such as Ladue, John Burroughs and schools as far as Wisconsin and Pennsylvania.

However, Wilkinson faced an uncomfortable predicament. As Tennill put it, “When you are looking at a budget that is 80 to 85 percent people, you can’t get to $2 million without impacting some people.”

Wilkinson’s previous position as the Assistant Superintendent of Human Resources only heightened her awareness of the recommendations’ impact on the District. “I can look at every recommendation and see a face and a name because I know the people of the District,” she said. “I knew that I would be impacting people.”

Wilkinson admitted that the students would inevitably feel the consequences of the District’s deficit, simply due to the strong interpersonal connections that she believes characterize the Clayton schools.

Of Wilkinson’s proposals, the BOE approved reducing the District’s spending by $1,638,753, including restructuring the District’s health care benefit plan, cutting 4.7 full-time certified staff positions, 6.2 classified staffing positions, eight Truman State University intern positions and eliminating programs staffed by part time employees.

Out of all her proposals, Wilkinson says the one which provoked the most controversy was the restructuring of the elementary strings program. She also believes that her proposal was inaccurately portrayed to the Clayton community.

“My recommendation was that we look at a way to restructure the program,” she said. “It is still [important] to … be able to provide this experience for our students.”

The BOE eventually postponed the decision on the strings program because they considered it more of an organizational than a financial issue.

In regards to the health care benefit plan, Wilkinson proposed that the District change the staff health care benefits from a “high option” plan to a “base option” plan, meaning that teachers would have to pay certain out of pocket expenses in major medical circumstances.

Throughout the research and proposal process, Wilkinson says that she kept one goal in mind. “It’s still important for us to preserve what makes Clayton, Clayton,” she said.

Community Perspective:

When substitute coordinator Meg Flach learned that her job was on the list of proposed budget reductions, she was not altogether surprised.

“I always kind of knew that, if it was going to come to this, my position would be one that they would consider,” she said.

Flach’s job involves hiring and overseeing the training of substitute teachers at CHS and, in some cases, personally filling in for teachers in the classroom. She feels that the District’s high standards substitute program set the Clayton schools apart from other districts.

Regardless, Flach understands that the proposal process could not have been easy. “If it isn’t me it is somebody else,” she said.

Of all Wilkinson’s proposals, the elimination of Flach’s job incited some of the greatest student reaction. CHS students brought signs to Board meetings and even created a Facebook page to “Bring Back Flach.”

When Flach spoke about these reactions, she began to tear up. “Having people say that it really brightens their day to know that I’m in their classroom or, even now people are seeing me in the hallways and giving me hugs … It’s really wonderful. I care so much about these kiddos, and that’s going to be the hard part is leaving [them] behind,” she said.

Another issue that specifically alarmed many teachers was the health benefits reform. AP Environmental Science teacher and Missouri State Teachers Association Representative Chuck Collis believes that the proposal was unfair to the staff.

“I wish that the recommendation from Dr. Wilkinson had not included the $850 reduction in benefits across the board,” he said. “If you’ve got a teacher who is early in their career and not making very much money yet, that $850 means an awful lot to that person.”

Collis also added that reducing staff health care benefits directly reduces staff retirement benefits. “I feel like it disproportionately hurts a lot of people who are in vulnerable positions,” he said.

In addition, Collis said that the teachers were not given much notice about the proposal. “It would have been nice, I suppose, to have a little bit more than a one day notice about the recommendation of benefit reduction,” he said. Besides that issue, however, Collis feels that the BOE communicated well with the Clayton staff.

CHS PTO Co-president and parent Evelyn Rice-Peebles believes that the school District will be fully capable of maintaining its standard of excellence. “The benefit cuts are certainly not desirable, but they are not crippling,” she said. “I believe that the Clayton District coverage of their staff is still above and beyond most other districts’.”

Although many members of the Clayton staff and community have questioned certain aspects of the budget proposals, Rice- Peebles believes that the District will find a way to compromise. “I think we all need to look at ways to work together as opposed to looking at ways to be separate,” she said. “We stand as one when it comes to our children and their education and that’s what matters the most.”

Looking Forward:

Despite the work and decision making within the past two months, the budget process is far from over. According to Tennill, the BOE has always viewed the deficit project as a two step process.

“The first step is permanent budget reductions and the second step is permanent revenue increases. What that’s going to involve is going to the community and asking them to consider an increase in taxes,” he said.

Although Tennill anticipates that the District will need to further investigate their resources, he thinks that “[a levy] is inevitable. It’s just a matter of one year, two years, three years, five years. It’s hard to tell,” he said.

Throughout the investigation process, Wilkinson and the BOE have expanded their understanding of what exactly makes our District function.

“As we do this work, we need to establish criteria that help us evaluate the decisions that we make and implement that criteria [in the future],” Wilkinson said. “This really needs to become a natural part of how we do our work. It needs to be the way we do business.”

In Conclusion:

“What makes Clayton, Clayton?” The answer to this question is as ambiguous as it is important. Although there may be no concrete response, the budget project itself has certainly shed light on one of the District’s most important qualities: the strong interpersonal relationships that tie the community together.

Despite the coming changes in curriculum and organization, this human connection will continue to be the District’s greatest asset.

Meg Flach prefers to think of her exit from the District as if she were a student. “I understand why they have to do this and I understand all that stuff and I don’t have any hard feelings,” she said. “But it’s just going to be really crushing when we graduate and I don’t come back next year.”

The elimination of Flach’s position at Clayton poignantly illustrates the consequences of balancing educational excellence with money: In the words of Dr. Wilkinson, “It impacts everybody.”