Q & A with Terry Gonda, Treasurer
(Today's Pulse, Sunday, March 17, 2013)
Q. What actions did the district take to counteract its financial woes?
A. The District cut more than 100 staff positions, closed a total of three buildings, cut busing, raised pay-to-participate fees to $651, rolled back academic programming to state minimum operating standards ... There are almost too many things to count. We became a district where personnel and programming were cut to the bone.
Q. What impact has fiscal emergency had on the district?
A. Repeated levy failures and fiscal emergency have had serious impacts on our district -- in the way we operate as a business and the way we operate as a school district. When the business side is saddled with $11 million in state loans to pay back over three years, and the classroom side is cut to state minimums, you just can't go about the business of education as you once did. Nor should you. Our voters said yes to a significant levy in 2011, and had we not been in fiscal emergency, we would have been able to begin reinstating staff and programs immediately. But because we must pay back the loan dollars and any financial decisions must be approved by the oversight commission, we are just now able to plan for curriculum and classroom changes, 15 months after our voters approved a levy. In addition to that, our latest state report card was downgraded from "Excellent" to "Effective." That's just one more indication that you cannot go through what we've gone through and not have the classroom be affected.
Q. Do you think any positives have come from the situation?
A. There have been some positives that have come from our situation. As we have gone through the last three years, we have had to closely examine every purchase, every process, every position and ask ourselves, can we do without it? While our financial difficulties have been a lack of revenue and not an expenditure issue -- the state commission itself has said this -- that type of examination helps us run a lean operation and be good stewards of our residents' tax dollars.
Q. What have you learned going through this process?
A. It feels like we could possibly be the most audited school district in Warren County, as agencies continue to review our books in preparation for our release from fiscal emergency. However, this is a good thing as it helps ensure that our fiscal house is in order. The value of our staff has become quite apparent as so many wear multiple hats to get the job done. I've also learned that, as a parent in the district, no matter what turmoil is going on outside the classroom, we have exceptional teachers and staff who are dedicated to the task of making sure each student has a quality educational experience.
Q. What steps are in place to help prevent a financial crisis like this one from occurring at Little Miami again?
A. To avoid such financial issues we will continually monitor our five year forecast with the most up to date information we have. About 25% of our operating budget comes from the state which unfortunately only provides two year budgets. Little Miami is already a lean operation as we were in the bottom 3.1% of per pupil expenditures in the state in FY11 and look to be close to that for FY12. But like every other public school district around the state until the school funding model changes, will need to be on the ballot again sometime in the future.
Q. What must be done before Little Miami is released from fiscal emergency?
We have completed our annual financial and compliance audit, and our Board of Education as adopted several policies that the Auditor of State has required in order to be released from fiscal emergency. We are still waiting for the Auditor to review our current five year forecast.
Q. What is Little Miami's financial outlook now?
A. Our financial outlook is positive. We will make the final $2.9 million payment on our solvency assistance loan in fiscal year 2014, our forecast is showing a positive carry-over balance at the end of five years and we are realizing higher-than-projected revenue from students who are open enrolling into Little Miami. After our Board of Education voted to reduce pay-to-participate fees this year, we have seen more student-athletes come out for sports to help keep our program in the black. As the treasurer however, I am always cautiously optimistic.
Q. What, if any, impact does the govenor's proposed budget have for Little Miami?
For the time being, Gov. Kasich's new budget will have little negative impact and some positive impact on Little Miami's bottom line. We are flat-funded for the next two years according to his proposal, and that is a relief. We are interested, too, in seeing how his funding increases for special and gifted education will affect our district, but we do not have enough information on that at this time. What concerns us most is the on-going conversation about "weaning" districts off of state-guaranteed funds. In the new budget proposal Little Miami is listed as receiving around $2.5 million in FY14 and FY15 in guaranteed funds, and our forecast for the next five years relies on it. Should those monies disappear from our already-tight budget, we could very well find ourselves in financial crisis again. A loss of state guarantee funds would equate to the need for about an additional 3.5 mills in local funds.