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Financial Considerations For Sharing Discussed By R-A, G-T?School Boards

Harsh Realities

December 6, 2012
Dan Voigt , Emmetsburg News

GRAETTINGER With a time frame for making a decision looming larger and larger, the members of the Ruthven-Ayrshire and the Graettinger-Terril Community School Boards met in Graettinger on Monday evening to look over one of the prime considerations for a possible academic sharing arrangement between the two districts. The primary topic finances.

Jeff Herzberg, Administrator of the Prairie Lakes Area Education Agency served as the facilitator of the meeting, which got right to the heart of the matter - a five-year financial projection for each of four options available to the districts, as worked out by the two Superintendents, Jesse Ulrich of Graettinger-Terril and Andrew Woiwood of Ruthven-Ayrshire.

The financial projections told a stark story that both district would see negative spending authority balances for almost every option proposed.

"We sent these numbers to Larry Siegel (financial consultant for the Iowa Association of School Boards) and he felt our numbers were very accurate," Woiwood explained. "He said we were being very honest with ourselves, not over or under estimating our numbers at all."

Discussion began on what options would best fit the situation financially. A one-way whole-grade sharing arrangement drew considerable comments, as possible staffings were discussed. With possible cuts in staff for such an arrangement, RA Board member Larry Conlon wondered if a savings of salaries for seven teachers between the two schools would amount to $325,000, why the financial picture wouldn't be brighter. "I'm just having trouble seeing how we're dropping off a cliff with that kind of savings."

"There's a difference between cash and spending authority," GT Superintendent Jesse Ulrich answered. "The two ways to change that are to increase revenues or decrease expenditures."

While the Ruthven-Ayrshire board had discussed the idea of Partial-Day sharing at length in the past, it was agreed that the concept was not the answer, as the financial projections called for a combined deficit in excess of $1 million under a Partial Day Sharing arrangement. Also, difficulties in scheduling and transportation would add into the mix.

Looking at two-way sharing, where both schools would send students to the other community, it was understood one school would be a middle school and the other a high school. Both districts would adjust faculty to best serve the alignment of classes.

"The goal is to get as many students in front of a teacher as possible," Woiwood said. If you're teaching two physics classes, one at each school, and there's two kids in each class, you're not being efficient."

But two-way sharing option also has downfalls RA would see its debt increase to $58,000 after three years, and in five years, the debt would rise to $600,000. Graettinger-Terril would see a debt of $194,000 at the end of five years operating under two-way sharing.

Ulrich pointed out that the risk of two-way sharing was the possibility of loss of students to open enrollment. "We predict we could lose up to 30 students from Graettinger-Terril, and Ruthven-Ayrshire could lose up to 20, which translates into a loss of $300,000 revenue. That's the same amount as the savings and we'd still have the same expenses. The two-way whole-grade sharing is the elephant sitting in the middle of the room."

The option of one-way sharing, with Ruthven-Ayrshire sending 7-12 grade students to GT, was projected to see RA's debt reduced to $23,000 at the end of five years, while Graettinger-Terril would have a positive balance of $115,000 at the end of the five years.

"A one-way 7-12 sharing agreement where Graettinger-Terril sends kids to Ruthven-Ayrshire is financial suicide for GT," Ulrich said. "R-A came to us to talk. We're not in a situation where we need to send our kids out to be educated. We haven't made the deep reductions yet, but you folks at RA have. We still have the options to reduce our expenses."

"I have a concern about entering into an agreement that wouldn't make good financial sense for the district I represent," agreed GT Board President Kyle Norris.

After a brief break RA Board President Barry Fischer resumed the discussion. "The toughest thing for our board is sending all our students over here. That was not sold to our patrons in our surveys. It's going to be difficult for us."

"A sharing agreement, of any kind, is a first step into a long-term relationship," noted Galen Chicoine of the GT Board. "When you get down to it, our long-term survivability is dependent on how much we save together. Five years out, we could lose $870,000."

"The last thing either of us want to do as a group is to give up $870,000," agreed Norris. "This comes down to why we're really hereyou can educate a lot of kids for $870,000."

"There's no discounting that this is a huge financial consideration," Chicoine said. "The emotion of this isn't lost on our board, especially over the last seven years."

"One way sharing was never on our radar," Fischer said.

"It would be very difficult for me to promote a decision that would cause both districts to lose a million dollars," Norris said.

"So, it seems the only palatable option for both of us is 7-12 one-way sharing with Graettinger-Terril," Fischer said.

"Doing nothing is not an option," Supt. Woiwood said. "You have to take the emotional aspect out of this and do what's best for the students. The staff is worried about their jobs, people are going to want to know what's going to happen."

Agreeing that they need to put the option in front of their district's patrons, the Ruthven-Ayrshire board agreed to hold a public forum on the new sharing option at 6 p.m. Monday, Dec. 10, at the Ruthven-Ayrshire School.



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