Wicomico County Public School System Conserves Dollars In Current Difficult Budget Times

As challenging financial times continue for the community, the state, the country and the world, the Wicomico County Public School System is carefully conserving dollars in this year's budget and looking for ways to cut costs for next year's budget to ensure that Wicomico County students will still receive the high-quality education they deserve.

While operating on a balanced budget, the school system has already identified $3.1 million in budget savings for the current year, money that could be set aside for future years when the financial picture may be just as difficult if not more difficult. Looking ahead to the Fiscal 2011 budget (for July 1, 2010-June 30, 2011), the school system has developed a multi-tier plan to reduce the budget by $6.4 million in anticipation of our County government not being able to meet the Maintenance of Effort level needed for the school system to receive new state dollars. The County can provide $185,000 less for 2010-11 and still meet Maintenance of Effort due to the funding formula.

"It is a challenging time. We are responding to it as best we can," said Dr. John Fredericksen, superintendent of schools. "Our goal is to survive this economic difficulty while continuing to provide quality educational services for our students. It is our job to create the conditions for their success, regardless of the financial challenges."

Challenges in This Year's Budget (Fiscal 2010, from July 1, 2009-June 30, 2010)

This budget year has been a challenging one:

• The Maryland Attorney General's Office finally approved the school system's Maintenance of Effort (MOE) plan, enabling the school system to utilize approximately $4.1 million in new state and federal funding this year. The MOE plan called for the Board to pay our County government $2 million from the Board's School Construction Fund. These funds had been accumulated over the past 3 years in an effort to address the long list of deferred capital projects such as roof replacements and HVAC upgrades. However with the $2 million check recently given to the county, this leaves only $2.1 million in the entire account. "We hate to see the account depleted as the list of deferred capital projects continues to grow and postpones the date when all schools will have modern HVAC and proper technology, but we had no choice in order to be able to leverage the state and federal dollars," stated Dr. Fredericksen.

• The Wicomico County Council has denied transfers of budgeted funds when the Board of Education has sought to transfer funds between categories to hire people to do jobs needed to serve students even though it does not increase the bottom line budget.

• The superintendent has instituted a hiring freeze. When a position becomes vacant during this budget year, the superintendent must approve filling that position. Dr. Fredericksen said he will evaluate each position to determine whether it must be filled or whether it could remain vacant. "We are not using furlough days, lay-offs, or reduced hours and/or pay at this time," he said. "If this changes, we will discuss it with the Board of Education, employee groups, and other appropriate people."

• The superintendent has instructed all budget managers to save as much cash as possible in light of pending budget reductions that the school system anticipates facing from the county, state and federal levels in the coming years. While the school system is operating with a balanced budget this year, the superintendent and his staff have already identified $3.1 million in budget savings which include:

 $1.3 million saved by withholding funding approved in this year's budget for the Board's other post-employment benefits trust, GASB 45, retiree health care plan. This plan is adequately funded at this time, but funding will be needed in the future.

 $425,000 saved by reducing expenditures on supplies and materials by 7 percent. The money saved would have been used for materials of instruction for the classroom, supplies for repair, small equipment, computer software, testing supplies, and media center books and periodicals.

 $626,000 saved from various contracted services, including $200,000 saved by putting on hold several systemic renovation projects that include the planned repair/renovation of the Wicomico Middle elevator; auditorium lighting upgrades for the high schools and track lighting for the Beaver Run Elementary stage; relocating 11 portable classroom buildings that would otherwise be available for use at other schools upon the completion of the new James M. Bennett High, blacktop resurfacing, scaling and paving reduced by 10 percent over the prior year's level. In other contracted services, the funds budgeted for a curriculum audit by an outside consultant would not be spent; the school system would attempt to use in-house personnel to conduct the audit.

 $143,000 saved by cutting the conferences and meetings budget by 33 percent and restricting all out-of-state travel.

 $388,000 saved from capital outlay, which would result in the delay of planned repairs and renovations to the Parkside High track; reduce the amount of technology upgrades (items such as school security cameras and interactive whiteboards); delay ADA-compliance upgrades at Delmar Elementary, Mardela Middle and High, Pittsville Elementary and Middle, and West Salisbury Elementary; defer parking lot improvements at Fruitland Primary and Fruitland Intermediate; and delay the planned replacement of network servers and network switches.

Looking Ahead to Next Year (Fiscal 2011) Budget

The budget for Fiscal 2011 (for the budget year July 1, 2010-June 30, 2011) is already being drafted, with the first public budget input session planned for January. Even though the school system is only in the early stages of preparing the Fiscal 2011 budget, a number of key financial factors have already become clear.

The County Executive and the Wicomico County Council have informed the Superintendent and the Board of Education that the county intends to reduce its funding for the school system by $5 million next year, and therefore not meet the maintenance of effort level needed to receive additional state funding. The County Executive and County Council have also advised the school system to anticipate an additional cut in funding of $2.5 million for Fiscal 2012 and an additional $2 million for Fiscal 2013. The school system and the county will work together to lobby the Maryland General Assembly for a change in the maintenance of effort requirement whereby we may continue to take advantage of whatever increases in state and federal dollars may be available.

The State of Maryland has supported school systems with significant levels of funding over the past 7 years, primarily as a result of the Thornton funding initiative, but the amount of state aid for education is likely to be reduced in future budgets (starting in Fiscal 2011), based upon projections released by state sources. "The State of Maryland has a significant structural budget deficit, on the order of $1.8 billion, and we can anticipate that school systems, while to date have escaped from the state budget axe, will most likely begin to feel the pinch from state cuts in FY 2011 and ensuing years,” said Dr. Fredericksen.

The Federal government has provided economic stimulus funding for 2009-10 and 2010-11. That funding is limited to specific areas and initiatives - special education, Title I and Food Services. Currently, this funding source is set to end after two years and likely will not be available after the budget year for July 2011-June 2012.

In anticipation of receiving approximately $5 million less from the county than in the current year, as well as reduced state and federal funding due to a decrease in enrollment and students qualifying for Free and Reduced Meals, the school system is identifying ways to achieve $6.4 million in total reductions. Reductions could include:

• Using the 70 or more Early Notification Program (ENP) retirements coming in June to prevent layoffs. ENP was intended to ensure that veteran teachers stayed with the school system until retirement and that enough notice was given to Human Resources to aid in recruitment, while also saving money by hiring new teachers to replace the retiring veteran teachers. However, it appears that the school system may not be able to afford to fill half of these positions that will be vacated as a result of the ENP retirements. This will mean reorganizing and requiring those who are left to carry a heavier load. This will be the time to think about tasks that "we've always done" to see if any of them can be dropped. The school system will focus its efforts on direct student services, with classroom instruction being the priority. "While we know that support services allow the teacher and others to focus on the student, the school system must adjust at this time," Dr. Fredericksen said.

• Re-examining many programs to decide whether they should continue. These programs include, but are not limited to, the Magnet centers, Year Round Education at Delmar Elementary, the Beyond the Limits ropes course, and professional development coaches.

"For Fiscal 2011, we will try to have as much in the way of reductions on the table as we can so that when we find out exactly how much state aid we are going to get, we will be more than adequately prepared to balance expenditures with whatever revenue we will be getting," Dr. Fredericksen said. "Our overriding goal will be protecting the classroom. A child only gets one chance to experience their PreK-12th grade education. It's our job to make that experience in our schools the best that it can be."