Education commissioner OKs bonuses at Little Rock School District, looks at job cuts in 2018-2019

Little Rock School District leaders are contemplating cuts of $1.2 million in assistant-principal jobs and $1 million in teacher positions in an effort to trim more than $5 million from district expenses in the 2018-19 school year.

The areas for potential cuts were outlined in documents that Little Rock Superintendent Mike Poore and his staff sent this week to Education Commissioner Johnny Key in response to Key's questions about the district's ability to pay a proposed one-time bonus of $1,000 to each employee.

Key on Friday thanked Poore for the information and approved the payment of employee bonuses.

Other potential cuts on the list include:

• 35 "paraprofessionals" or aides who assist in supervising students inside and outside classrooms at possible savings of $936,705.

• Central office staff, $600,000.

• Computer lab aides, $365,818.

• Stipends to middle and high school teachers for student supervision before and after school and at lunch, $350,000.

• School improvement specialists, $250,000.

• Novanet Lab aides, $124,890.

• Three security officers, $91,237.

The response to Key from Poore included not only the estimated budget reductions for fiscal 2019 but the projected capital improvement project costs of $148,358,890. Those projects include $100.3 million plus a $3 million contingency fund for the new Southwest High School, and $45 million for other projects.

The district, according to the information sent to Key, is paying for the new school and other projects with the last year of state desegregation aid, plus $93.3 million from the issue of second-lien bonds, as well as $3.5 million a year from a 1-mill dedicated maintenance and operations tax.

In 2020, a $7 million transfer from general operating funds will be necessary to reach the $148.4 million price tag. Second-lien bonds are financed with existing district revenue and do not require voter approval.

Poore reported to Key that preliminary student registration numbers for the 2018-19 school year show a possible increase of students as compared with this year, from 22,338 in kindergarten through 12th grade to a possible 22,469. The projected increases in student numbers are at the high school and middle school levels.

The district's state funding is based on enrollment counts so an increase in students can translate into additional state money for the district's operating costs.

"Although these numbers are very preliminary, I am encouraged," Poore told Key. "We know we now need to continue to boost marketing efforts and support to all families who are in the district or who are considering joining LRSD. My hope is that these numbers will allow us to stop the decline in district enrollment that has been a multiple-year trend."

Poore also told Key that the district has difficult budget decisions to make to achieve the $5 million in budget cuts for next year but that the goal is manageable.

"I will point out that we have a history over the past four years of meeting these budget reduction targets," he said, referring to more than $40 million in cuts over the past few years.

"It should also be noted that this district completed a $47 million capital improvement project to open Pinnacle View Middle School. This work was challenging in its time frame and in its budget limitation, yet we came in on time and under-budget and did not impact our fund balance. This was all done during a time in which we reduced our operating budget as the desegregation funds were eliminated," Poore noted.

Poore has said in recent weeks that the $5 million in budget cuts for the coming school year are necessary in large part because of student enrollment declines this year as compared with last school year, and because of reductions in categorical state aid to assist districts in which more than 70 percent of students are identified as coming from low-income families. That figure is based on student sign-ups for free and reduced-price school meals. The Little Rock district has dropped below that 70 percent threshold.

Kelsey Bailey, the district's chief financial officer, said Friday that the specific positions to be eliminated within each of the budget-cutting categories are yet to be identified or finalized. In regard to the assistant principals, for example, Bailey said not all assistant-principal jobs would be eliminated but 10-12 might be affected. Those would be in cases where the number of assistant principals exceed the district-set ratio of assistant principal to students.

Key's approval Friday of the $1,000 bonuses paves the way for them to be distributed to the more than 3,000 employees on March 9, before spring break starts March 19.

Key acts as the school board for the Little Rock district that is in its fourth year of state control, operating with a state-appointed superintendent and without an elected school board.

In his letter to Poore, Key said he was glad that the district's current financial condition is sufficient to support the bonuses, which will cost about $4.4 million in the system that has revenue of $351 million this year.

"There is no question teachers deserve credit and compensation for their dedicated service to our students," Key wrote.

He cited the district's loss of millions of dollars a year in state desegregation aid and the tough budgeting choices that have resulted from that. This is the final year the district will receive the $37.3 million in special state aid.

"I cannot overstate the importance of the shared sacrifice by educators and support staff of LRSD to meeting this timeline," he wrote in the letter in which he also said the district's employee salary structure and payment of bonuses is not the best way to "remain competitive or be able to recruit and retain effective talent."

"While we know that LRSD faces a budget reduction next year, a bonus like this does not occur without the District having a strong financial foundation," Poore said about the bonuses in a prepared statement Friday.

"We believe this clearly shows we are committed to fiscal responsibility, being good stewards of the resources entrusted to us, and honoring our employees. They have been steadfast in their work, helping us through tough budget decisions while leading us with positive strides in student achievement."

Teresa Gordon, president of the Little Rock Education Association, a union of teachers and support staff, said Friday that she was pleased by Key's decision to ratify the bonuses that were negotiated by teams of teachers and district leaders last month.

"They are going to have the money for spring break," Gordon said about employees. "It's just what we wanted. We wanted them to honor the agreement, and that's what he chose to do."

Teachers and other employees in the district last received across-the-board increases to their salary schedules in the 2013-14 school year. That was a 3 percent increase, which resulted in a $35,232 starting salary for first-year teachers.

The previous one-time bonus distributed to teachers and staff members was for $350 at the end of the 2014-15 school year. Central office, top-level administrators did not receive that bonus.

The agreement for the 2016-17 school year reduced the district's contribution to employee health insurance to $275 a month and cut the teacher work year and pay by two days. The starting teacher salary declined to $34,865 and the top salary to $67,919.

In all school years -- with or without the bonuses or the across-the-board salary increases -- eligible employees in the district have received the traditional step increases for their additional year of work experience. However, veteran teachers and other employees who have reached the top of their salary schedules are ineligible for those step raises.

Little Rock Education Association members had met Thursday night over what they saw as a delay by Key to act on the proposed bonuses. Association members immediately began a public campaign on social media for the approval. Informational pickets at schools were planned for next week if the approval by Key was not forthcoming.

Key had tabled the bonuses proposal when he got it Feb. 13 from Poore until he could get additional information from the district on the system's 2017-18 and 2018-19 budgets and updates on the district's capital construction expenses.

In Key's letter approving the employee bonuses, the commissioner encouraged district and employee association leaders to "take a hard look at the structure of the district's pay plan."

While the district's average salary ranks as high as fourth in the state, the starting pay ranks as low as 60th, according to a 2016 study.

"Low starting pay, coupled with low step increases for newer teachers, puts the district at a competitive disadvantage," Key wrote.

A Section on 03/03/2018

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