Bentonville School District Focused On Spending Cuts

BENTONVILLE -- Opening three schools in the last two years added millions to the School District's operating budget. District officials agreed some budget adjustments were necessary.

"At some point you have to catch your breath and slow down so that you can remain healthy," said Sterling Ming, finance director.

At A Glance (w/logo)

Budget Reduction

The Bentonville School Board approved budget reductions for the 2014-15 school year last month. Here’s a list of those items along with how much each one will save the School District.

• Eliminate up to 15 teaching positions through attrition by resignation, retirement and re-assignment: $1 million

• Last year of payment for employee buyout: $632,962*

• Buy online textbooks or classroom set purchases when applicable: $250,000

• Evaluate web-based instructional and intervention programs. Eliminate less effective ones and renegotiate contracts on effective programs: $79,000

• Assign department heads, team leaders and other positions with less than full teaching schedules to a full schedule to maximize the course load for all teaching personnel: $65,000

• Eliminate transportation to and from Northwest Technical Institute in Springdale: $30,000

• Total: $2,056,962

*Forty-four staff members selected the option of early severance at a total cost of $1.9 million, which was paid over three years, according to Sterling Ming, finance director.

Source: Bentonville School District

By The Numbers (w/logo)

Fund Balance

A history of the Bentonville School District’s fund balance as of July 1 each year:

• 2005: $14.4 million

• 2006: $11.9 million

• 2007: $7.9 million

• 2008: $4.9 million

• 2009: $5.1 million

• 2010: $14.8 million

• 2011: $17.6 million

• 2012: $26.9 million

• 2013: $24.6 million

• 2014: $23.0 million (projected)

Source: Bentonville School District

Willowbrook Elementary and Bright Field Middle schools opened in 2012. Fulbright Junior High School opened in 2013. Those three schools serve more than 2,100 students combined.

The district spent about $119 million for the 2011-12 school year and is projected to spend $134.8 million this school year.

Officials assembled a committee last fall to begin the process of identifying $2.4 million in expenses that could be cut from next fiscal year's budget.

The School Board last month approved six cost-cutting measures totaling $2,056,962. Administrators believe they can still reach their goal of $2.4 million through a variety of other measures that probably will be announced next month. None of them will affect personnel, Ming said.

The biggest cost reduction will come from eliminating 15 teaching positions through attrition. That will save $1 million.

The smallest cut will come from eliminating transportation to and from Northwest Technical Institute in Springdale. That will save $30,000. Seventy-six Bentonville students go to the institute, but only three use district transportation, Ming said.

Not everyone thinks the cuts are necessary. Travis Riggs, who resigned in September after 12 years on the board, used time allotted for public comment at Monday's board meeting to state his case on the matter.

"I don't think we're in financial stress at all," Riggs told the board.

The district's fund balance is projected to be about $23 million as of July 1, the start of the next fiscal year. That's 16.95 percent of the operating budget. The board has a policy of maintaining a reserve that's 17 percent of the operating budget.

Riggs said he doesn't oppose reviewing operations and eliminating ineffective programs.

"That's absolutely something we should do. I applaud you for doing that," he said at Monday's meeting. "But I'd like to see some logic in why we're deciding to cut what programs, not just cutting numbers. I'd like to see how many kids are affected by the programs you're deciding to cut."

The district should be helped on the revenue side by a projected increase in assessed values. Assessed valuation across the district is expected to increase from $1.6 billion to $1.66 billion, the highest it's been since 2008. Much of the district's revenue is derived from taxes levied on property.

Growth Funds

Student growth money is collected from the state based on enrollment increases from the average daily membership of the previous year. The district doesn't usually factor that money into its budget considerations.

It did for this year's budget, however, in order to make up about a $2.5 million gap between expected revenues and expenses.

The district projected enrollment would increase to 15,300 this year. That would have meant growth of nearly 3 percent from last year. Enrollment grew by 5.4 percent the year before.

But enrollment has hovered around 15,000 this entire school year, far short of projections. The opening of Northwest Arkansas Classical Academy, a charter school for grades kindergarten through eight, had a lot to do with the shortfall. The district therefore will collect far less in growth funds than it had anticipated -- about $1.6 million compared to the $3 million that was expected, Ming said.

The district won't count on growth funds as part of its budget for the 2014-15 school year.

When Michael Poore took over as superintendent in July 2011, the fund balance was $17.6 million. The district's latest projection is it will end this fiscal year with a fund balance of $23 million.

Though that's down from a high of $26.9 million two years ago, it's still much higher than it was in 2008, when it was only $4.9 million.

Back then, the district had just gone through a period of building schools and adding personnel. Opening new schools also brings increased costs in utilities, maintenance and cleaning. That took a toll on the fund balance.

"The board and administration made a concerted effort to build that fund balance back up," Ming said.

The state doesn't require school districts to maintain a certain fund balance in relation to its annual operating expenses. But the Bentonville board's commitment to keeping 17 percent in reserve helps when Moody's Investors Service assigns a credit rating to the district, said Scott Beardsley, a financial adviser to the district.

Staffing Analysis

The district ordered a personnel audit earlier this year. It was done by Prismatic Services of Huntersville, N.C.

The analysis has significant financial implications for the district.

The audit found, for example, the average student load carried by junior high school teachers by subject area ranges from a low of 107 to a high of 132. The district reports if it approached junior high scheduling with the goal of averaging 125 students per teacher, seven teaching positions could be eliminated, mostly in English and math. The state allows junior high teacher loads to be as high as 150.

The state doesn't maintain data on average teacher loads, according to the audit report. A representative from the Arkansas Department of Education told Prismatic the average teacher load is "pretty close" to 150 students, but for large districts such as Bentonville, the numbers are inconsistent.

At Bentonville High School, regular teacher schedules consist of five instructional periods. Some teachers, however, are scheduled for fewer than five. The total release time for these teachers amounts to 82 sections, the equivalent of 16 teaching positions.

District administrators said the fiscal impact of implementing Prismatic's recommendations cannot be determined at this time. Poore said during a board meeting last month the district knows it can tighten its staffing, but that it's not a one-year process.

"This really is a process that has to evolve over a three-year span in order to not take away or diminish anything we're doing in terms of our old performance levels," he said. "One of the things said twice in this audit is it's very rare for a district to be at the very top level of achievement and also trying to do things to reduce the budget."

The board spent some time going over the audit at its meeting Thursday. Wendi Cheatham, president, said it's a sign the district is doing its best to keep expenses down.

"We know these are our issues and I'm trusting our administration is going to address these issues," Cheatham said. "At least we are finally having these discussions. They needed to happen a long time ago."

Looking Ahead

Bentonville's West High School is scheduled to open in August 2016. Poore has said that will add about $4 million to the district's operating budget.

Meanwhile, the district has thoughts of opening another elementary school, perhaps as early as 2017. A demographics study done for the district last year recommended Bentonville would need at least one new elementary school and acquire a site for a new middle school within the next decade.

Cheatham said she'd like to avoid having to ask voters to approve another millage increase for such a project. The district's millage rate already is 46.6, one of the highest rates in the state. Voters approved a 2.9-mill increase last fall for Bentonville West.

"It would be foolish to think the voters will support every millage increase we ask for," Cheatham said.

Cheatham also emphasized the need for a long-range plan. She said Thursday's board meeting was the first time she'd heard a new elementary school could be necessary by 2017.

NW News on 04/26/2014

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