November 22, 2014

Elyria
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Peer district avoids Lorain’s drastic cuts

Hamilton Schools in southwest Ohio took gradual approach to avoid deficit

A decade ago, state audits of the school districts in Lorain and Hamilton were remarkably similar: Each predicted the district in question would be millions of dollars in the red by the 2001-02 school year if drastic measures weren’t taken.
Hamilton officials used that audit as a roadmap for the future — carefully carving pieces from the district at the close of each school year to keep the budget balanced.
That wasn’t the case in Lorain, where its day of reckoning came when it had to make drastic cuts in the past few months as new Treasurer Ryan Ghizzoni determined the district would be
$4.75 million in the red by June 30.
In the past few months, the district said good-bye to
246 teachers — nearly a third of its teaching staff — and
101 nonteaching employees.
Hamilton school officials say they avoided Lorain’s plight by right-sizing the teaching staff every year for about a decade. The district cut teachers and other positions as enrollment declined and expenses rose to avoid a deficit.
But in Hamilton’s case, such cuts also were easier to make: It didn’t have a contract with the teachers that limited how many cuts could be made.
In Lorain, school officials weren’t allowed to cut any more than 40 teaching positions for every 500 students it lost.
Just as Lorain was known for its steel and auto manufacturing, Hamilton, in Butler County just north of Cincinnati, was known for its large paper mills. The demographics of the two districts are so similar that the state identified them as peer districts.
In 1997, the Hamilton district had an enrollment of about 10,000 students; Lorain had about 10,500 students.
Today, Hamilton has about 7,100 students and 650 teachers, while Lorain has about 7,000 students and 714 teachers before the massive layoffs in June — 10 fewer than it had in 1997, according to the Ohio Department of Education.
While Hamilton has lost about 800 students over the last 10 years, The Lorain school district has lost about 1,500 students in just the last five years.
Lorain’s financial jolt came when Ghizzoni, the new treasurer, discovered his predecessor had erred in putting together the district’s five-year financial forecast.
Ghizzoni’s numbers showed that by June 30, the district would have a $4.75 million deficit that could grow to exceed $15 million by the end of the 2008 school year.
Ironically, the 1997 state audit predicted Lorain would see a $4.4 million deficit by fiscal year 2000-01 that could increase to $15.6 million by fiscal year 2002-03.
Lowell Davis, a financial consultant for Lorain Schools, said the district managed to avoid a deficit by borrowing against its existing levy funds. But without additional money coming into the school system, those loans only dug it further into debt.
Adding to Lorain’s financial problems was the steady growth of charter schools — now totaling 13 — that have taken about 1,500 students and $8.2 million in state funding from the Lorain Schools.
That’s not the case in Hamilton, which has only one charter school that’s nipped $1.7 million from the school district’s budget.
But the decade-old auditor’s report reflected problems in Lorain long before enrollment started to decline due to charter schools.
The report warned that “union contracts contain many costly provisions and numerous constraints which would affect management’s ability to efficiently and effectively manage the district.” The district’s contracts with administrators also contained costly provisions, the report said.
Meanwhile, the report warned that fringe benefits for the employees were higher than the average for peer schools and for the state, primarily because the district pays the entire premium for medical coverage for all employees, which is not the case in Hamilton.
Additionally, the Lorain district pays for certain fringe benefits for administrators that are not paid by most school districts, the audit noted, such as payment of administrators’ State Teachers Retirement System contributions and 6.19 percent for annuities.
Hamilton’s 1997 audit described the district as a well-managed, well-operated district in most areas, with staffing levels and salary structures in line with peer districts.
But Joni Copas, Hamilton Schools communications director, said district officials have had to work hard to keep it that way.
“I’ve been here about
11 years, and each year, I’ve wondered how we’re going to balance the budget,” Copas said. “But each year, we take off a little more; each year, we look at making cuts.”
Robert Hancock, the district’s treasurer for 14 years, said Hamilton has reduced its teaching staff every year for at least the last five years.
This year, 18 teachers were let go, and other belt-tightening measures were implemented to save the district about $1.5 million and keep it in the black.
“We evaluate numerous things each year, but we’ve been reducing staff a little bit each year for years,” Hancock said.
Copas agreed, saying the district always is on the lookout for where cuts can be made.
“We’re constantly looking at enrollment numbers to see how we can right-size the staff,” Copas said. “We look at the supplemental positions, teachers, staff, everybody, and do whatever we have to do to meet the budget.
 “We look at numbers all the time. One year, we had to cut 23 positions; 10 of those were teachers,” she said.
Hancock said that vigilance is a must for the district.
“It’s tough to cut staff,” Hancock said. “But it’s better than ending up with a deficit. We’re always trying to avoid going over that cliff.”
Contact Bette Pearce at 329-7148 or bpearce@chroniclet.

BY THE NUMBERS: FISCAL YEAR 2007
LORAIN
Funding lost to open enrollment    $1.7 million
Funding lost to charter schools    $8.2 million
Regular student population    6,757
Number of teachers        714 *
Superintendent’s salary        $175,000 **
General Fund appropriation    $91 million

* 246 teachers were laid off in early June. School officials say some teachers may be called back to work before the start of school this fall, but aren’t saying yet how many.
** Superintendent Dee Morgan, who is leaving the job July 31, was paid $140,000; her successor, Cheryl Atkinson, will be paid a base salary of $175,000.

HAMILTON
Funding lost to open enrollment    $644,000
Funding lost to charter schools    $1.7 million
Regular student population    7,088
Number of teachers        650
Superintendent’s salary        $107,000
General Fund appropriation    $72.6 million

ELYRIA
Funding lost to open enrollment    $885,458
Funding lost to charter schools    $3.5 million
Regular student population    5,941
Number of teachers        592
Superintendent’s salary        $123,000
General Fund appropriation    $66.7 million