Millcreek school official calls for drastic measures as district faces $8.8M deficit

The Millcreek School Board needs to consider "unprecedented" measures, including restructuring middle schools and closing buildings, to bridge an $8.8 million budget deficit the Millcreek Township School District is facing for 2013-14, Assistant Superintendent William Hall said.

Hall on Wednesday presented the board with a $93.7 million preliminary budget for the school year that is $8.8 million larger than the current year's budget with no new revenue.

The district has already identified $4.1 million in possible savings, including $1.6 million from staff attrition and retirement and $1.3 million from delaying the purchase of updated textbooks, Hall said.

But the board will need to consider a menu of options, including closing buildings, restructuring middle schools, a tax increase and staffing cuts to bridge the remaining $4.7 million gap, he told the board during a special finance committee meeting.

"It's daunting," he said afterward. "But it's necessary, having to make these kind of decisions to balance the budget."

The growing expenses are driven in part by $1.9 million in salary increases, $2.9 million in increases to retirement contributions and rising special education and cyber school costs, Hall said.

"My first reaction is 'wow,'" School Director Judy Wheaton said. "Now is the time for all of us to come together as a community and find some positive solutions."

State law allows the School Board to raise taxes as much as 0.25 mills, which would raise an additional $920,000 in revenue for the district. For the owner of a home assessed at $100,000, that increase would mean an additional $25 in property taxes, bringing the bill to $1,268.

Other options to raise revenue include cutting some support and central office staff, eliminating extracurricular programs, eliminating elective programs across all grades, closing buildings or restructuring middle schools to a junior high model to save staffing costs, Hall said.

He did not offer any hard figures for how much money any of those measures would save the district immediately or in the long term, or any details about which schools might be closed or how any or all of the district's three middle schools -- James S. Wilson Middle School, Westlake Middle School and Walnut Creek Middle School -- could be restructured or when that might happen.

School Director Rebecca Mancini said the board has hard decisions to make moving forward.

"I deeply regret the position we're in," Mancini said. "I'm confident we will make the right decisions and protect instructional programming for our students."

The budget is the first for Hall, who has been leading the district since Superintendent Michael Golde went on leave in January. Golde intends to resign by June 30.

Beyond a spending plan, district officials have indicated they want to restore trust in the district after a recently released audit from the 2011-12 school year showed that the district revenue and expenses were off by $3.8 million when comparing budget projections and reality.

The audit by the Erie firm of Felix and Gloekler also showed that Golde had transferred $5 million from a capital projects fund to the general fund without the board's approval.

District officials pledged to be more conservative in financial planning, and at least one board member said the board would be more hands-on when it came to the district's finances in the wake of the revelations.

Hall said earlier this week that the 2013-14 preliminary budget is a realistic picture of the district's financial state and a good starting point for discussion.

The board took no vote related to the proposal at the meeting but will meet again for further discussion on Wednesday at 6 p.m. at a site still to be determined. The administration has typically presented the budget in May but started earlier this year in attempt to give the board and the community more time to understand the budget and the district's finances, officials have said.

By law, the district must have a preliminary budget in place by May. The board must vote on a final budget for the upcoming school year by June 30.

BY ERICA ERWIN, Erie Times-News

Financial Facts

Below is the current Millcreek Township School District budget for the year 2012. Click on the image to enlarge.

School Construction & Facilities

When a school district undertakes a major school construction project and seeks reimbursement from the Commonwealth, a process known as PlanCon is initiated. PlanCon, an acronym for Planning and Construction Workbook, is a set of forms and procedures used to apply for Commonwealth reimbursement. The forms are designed to: (1) document a local school district's planning process; (2) provide justification for a project to the public; (3) ascertain compliance with state laws, regulations and standards; and (4) establish the level of state participation in the cost of the project.

The Division of School Facilities in the Department of Education reviews proposed school building projects including their plans and specifications, enrollments, building utilization and building condition. The Division also calculates state reimbursement for qualified school construction projects, and reviews and approves the financing for reimbursable projects.