District Leaders, Residents Face Gloomy Budget Realities

Faced with yet another multimillion-dollar hole to fill in the upcoming budget, Falls school district leaders are undertaking the oft solemn task of bringing expenses in line with revenues.

On Wednesday, the district shared how an expected $2.4 million cut in revenues next year would affect schools during an informal round table discussion. They sought feedback from residents as they continue to craft the spending plan before the community votes on the final version in September.

The district is facing a two-pronged financial challenge next year based on Gov. Scott Walker’s biennial budget. Walker is proposing a freeze in the revenue limit, or the total amount of revenue the district can generate from each student. State aid is also expected to decrease by 15 percent.

The revenue limit freeze and cut in state aid creates a $2.4 million gap to fill for next year, and an expected $2.1 million gap in 2014-15. The continued cuts are having a deeper impact on education in Falls.

“We need to have parents and community members tell their legislators that we can do better than this. This isn’t good enough. It’s going to cripple us,” said School Board member Gina Palazzari “We are going down a path that is not going to be viable.”

Closing the Gap

One of the most apparent changes proposed for next year is staffing at Menomonee Falls High School. Teachers will instruct six sections, have two prep times, and will no longer take on supervisory sections like study hall. Teachers previously had five instruction sections. Supervisory roles will now be placed in the responsibility of aids.

The district plans to cut 9.1 full-time equivalent (FTE) employees at the high school. The changes in staffing at the school should save some $626,000. By increasing teacher workloads, the district would be able to reduce its staffing levels.

Elective classes like Design and Keyboarding would be eliminated, and other teaching positions would be cut from classes based on enrollment. ACADECA and the yearbook course would be shifted to co-curricular activities.

“We are recommending cutting some of the elective areas that are excellent and are wonderful to offer, but we have to make some hard choices,” said Superintendent Patricia Greco.

The district would also cut 2.2 FTE at North Middle School, reduce music class to every other day, cut music lessons, and cut Relationship and Design classes. A net increase in 1.45 FTE would be added to the elementary schools.

Preliminary layoff notices will be sent to teachers at the end of March, and final layoffs will occur in May.

Salary and Benefits 

Employee salaries will be frozen, which were set to increase 2.5 percent based upon the consumer price index and will save $450,000. The district is also reaping increased savings from a shift in health insurance plans and changes to employee retirement payments.

Roughly 76 percent of the district's expenditures are tied to salaries and benefits. But a move toward a self funded system, and the ability to change the health plan on an annual basis should continue to drive those costs lower. 

The district could use the roughly $8.8 million, or 18 percent of revenues, in fund balance it currently holds as a stop-gap measure in the budget, but utilizing those funds would hurt the district’s burrowing rate. The district must borrow annually for payroll between the beginning of the school year and when property tax revenue comes in.

Furthermore, the district would essentially be bankrupt if the fund balance were used each year to balance the budget. 

Orchestra Could Be on the Chopping Block in the Future 

With another $2.1 million shortfall expected in 2014-15, there are a number of other changes the School Board could consider next year – or even this year. However, these changes weren’t included in the current budget projection.

The district may consider eliminating Orchestra at the beginning of the 2014-15 school year. It’s a move that could save $75,000 and his been considered for more than a decade. Some parents wondered why the district is delaying the inevitable, and not simply ripping the Band-Aid off now.

“Why don’t we just simply make the decision rather than keep on discussing it?” asked district resident Barb Nienow. “Why not make the decision now rather than save it for next year?”

Revenue Generators

Some at the meeting Wednesday suggested seeking more revenue streams for the district to make ends meet.

“I would start focusing more on increasing revenue and investing in Thomas Jefferson and selling Valley View,” posited Larry Smalley.

The district is currently assessing the value of all its property holdings. The property Valley View is constructed upon could be one of the most valuable in the district’s portfolio Greco explained. Valley View sits along Town Hall Road, which is transforming into a major medical corridor in the area.

An idea to merge elementary schools into Thomas Jefferson was discussed as a way to lower expenses, and acquire an infusion of cash. Greco said it nearly $4 million in renovations would be required at Thomas Jefferson to bring it up to date with the other schools.

The district is also reconsidering its rental fee revenue. The Menomonee Falls Little League pays the district just $1 to lease the fields. Greco said they are reexamining that agreement with the league, and they may also increase North pool rental fees and building rental fees. For example, community organizations and churches utilize district buildings.

The budget will continue to be a discussion item on every School Board agenda until it is voted on by residents at the annual meeting in September.