Even though district voters approved a $3.6 million emergency levy last year, state auditors say the district should consider layoffs of more than 30 staff members, among other measures, that could save $5.5 million per year.
The steps are necessary to avoid a projected deficit of more than $22 million in 2023, according to a press release explaining the findings of a performance audit released Thursday by the Ohio Auditor of State’s office.
Other cost-saving recommendations include trimming employer costs of health care to the county average for school districts, and renegotiating a collective bargaining agreement provision.
"The district’s current financial trajectory obviously is unsustainable," Auditor of State Dave Yost said in the release. "District leaders will have to make some very tough decisions to put the district back on a solid financial foundation. This performance audit provides them with the analysis to help them make those decisions."
In a letter to staff members, Superintendent Todd Nichols said the district asked the state to offer its recommendations and noted that the audit also offered "a number of options to eliminate the deficit."
"These difficult choices will be discussed amongst the Board of Education and Cabinet. Specifically, the Board of Education will be discussing the Performance Audit, January 16. As we begin these discussions, our goal is to continue to provide our students with the best education possible within our financial limitations," Nichols said.
A copy of the audit is available as "Performance Audit 2018" under the Superintendent’s Links at www.cfalls.org.
A statement issued Thursday by the board of education, Treasurer Barbara Donohue and Nichols, school officials said they thank the auditors for their "thorough and professional" work.
"Today’s education funding environment finds us joining other districts in the maddening cycle of heading to the ballot nearly every year to renew previously passed levies, or to ask for additional funds," the letter states, adding the district has been mostly successful at maintaining a "revenue over expenditure mindset" and noted "this performance audit addresses expenditures only. It does not take into account any additional or potentially new revenue for our school district."
Change in plans needed?
In its release, the auditors office called use of $3.6 million in annual proceeds generated by the November 2017 emergency levy "a tough decision."
"Voters approved the levy with the understanding that the district would implement a spending plan for capital improvements, technology, curriculum, human resources and contingency planning," the release states. "However, under state law, emergency levy revenue is not restricted to a specific purpose, but can be used for any emergency need faced by the district, including to avoid an operational deficit. Simply postponing the purchase of new buses with emergency levy revenue, the district could free $810,000 that could be used to help mitigate the deficit."
Auditors reported the district could save nearly $2.6 million a year by eliminating the equivalent of 31.5 full-time staff positions, including 20 general education teachers, as well as some art, music and physical education teachers in the elementary schools.
Reducing the employer cost of health insurance to the average for Summit County school districts could save slightly more than $1.5 million per year and renegotiating a contract provision concerning the writing of individualized education plans could save $166,500 annually, auditors said.
Even with these savings, auditors said the district still would need to further reduce spending by an annual average of more than $1.3 million to reach the $5.5 million mark. The audit provides the district with several options that could be combined in a variety of ways to achieve these additional annual savings:
• Eliminate an additional 16 general education positions for a savings of more than $1.3 million.
• Make a 6 percent across-the-board staff reduction for a savings of nearly $1.4 million.
• Freeze base and step pay for two years for a savings of nearly $1.8 million.
• Eliminate the General Fund subsidy for extracurricular activities to reduce spending by more than $812,000.
Auditors said redirecting at least part of the $3.6 million annual emergency levy funds would likely allow the district to avoid these additional reductions.
Nichols said no immediate changes would be made until the Jan. 16 discussion.
"Over the next few weeks and months, we must provide the Ohio Department of Education with a financial recovery plan and prepare for the 2019-2020 school year and beyond," Nichols added.
"We are also in a Master Facilities Planning process with the goal of reaching consensus on a Master Facilities Plan by April. Additionally, we are commencing the Strategic Planning process with a goal of adopting a new, five-year strategic plan by May or June of 2019. Both endeavors will provide direction for the future of Cuyahoga Falls City Schools."
Eric Marotta can be reached at 330-541-9433, or email@example.com.