Staff cuts likely in Shenandoah

SHENANDOAH, Iowa — The budget picture for the coming year in Shenandoah does not look good, says the district superintendent. Layoffs and staff reductions are pending as are higher taxes for district residents.

“It’s terrible,” Shenandoah Superintendent Dick Profit told the school board last week. “I’ve never seen anything like this in my life, and it’s just scary.”

Due to the 10 percent across-the-board budget cut made by the state — about $885,00 — Profit removed $650,000 from the district’s revenue in the preliminary budget for 2010-2011. With that subtracted, Profit said the district would be in the red by August under the current budget.

However, after tax revenue is delivered, the district would again be in the black. Profit said he thinks the district can operate like that in the short term.

“I think we can live with that scenario for one year, but we’ll have no wiggle room,” he told the board.

That still means the district will need to cut at least $650,000 from its operating expenses, which is 80 to 85 percent salaries.

As of July 1, there was just under $1.6 million in the district’s general fund.

School board member Dwight Mayer said they are lucky previous school boards were responsible and left them in a good position.

“We are reaping the benefits of previous boards,” he said. “That is a testament to what they did.”

As a start, the board offered early retirement incentives for eligible employees. Those are the employees who are at least 55 years old and have worked in the district for at least 20 consecutive years.

The board authorized a retirement incentive of $6,000 and will pay for unused sick leave at a rate of $40 a day for anyone with 120 days.

Profit reported six employees cashing in on that offer, which he said will save around $315,000. He also said he does not plan on replacing those positions.

“We think we can fill those internally,” he said.

One of the employees who took early retirement was Becky Pringle, principal of the elementary school. The board members voted to hire Jeff Hiser to fill that position, but they are not hiring a replacement for his position as activities director and dean of students.

Profit is also talking with Essex Superintendent Ron Flynn about the possibility of sharing transportation supervisor Todd Greenwalt.

Not only would this require fewer budget dollars, but the schools would also receive incentives from the state for sharing.

Even with all of that, Profit said he sees no way the district is going to be able to retain all employees for next school year.

“We are going to have to reduce some staff,” said Profit.

Profit said insurance costs are another concern. United Health Care reported that its rates would be rising 40 percent next year.

The district spent $787,000 on insurance this year. The increase would mean additional $300,000, a figure Profit said the district cannot afford.

“Obviously we aren’t going to pay that,” he said.

He added that the district last year was hit with a 12 percent increase in health insurance rates. They negotiated that to 6 percent.

With all that in mind, Profit said board members are going to have to approve a levy increase when they meet to approve the budget next week.

After lowering the levy the previous two years, Profit said he is looking at an increase of about $1.60 per $1,000 of taxable valuation. That would put the total levy at $16.83 per $1,000.

The budget hearing will be Monday at 6 p.m.

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