Muhlenberg Co. superintendent gives board plan to strengthen financially-struggling district; ideas include maximum tax hike next three years, series of expense cuts

Messenger-Inquirer, Owensboro, June 23, 2016

Muhlenberg schools plan cuts, tax increases
By Keith Lawrence

Randy McCarty, superintendent of Muhlenberg County schools, has devised a plan to get the struggling school district back on its feet financially.

The plan includes a combination of cuts and a 4 percent increase in property taxes in each of the next three years to create a savings of $400,000.

In January 2015, faced with a nearly $5.5 million deficit in the fiscal year that began July 1, 2014, and a potential $3.8 million deficit for the fiscal year that began July 1, 2015, the Muhlenberg board of education voted to cut salaries 8 percent, lay off 51 nontenured teachers and not replace the 10 to 20 teachers who were expected to retire.

A proposed utility tax that could have been used to reduce the teachers' pay cuts to 5.5 percent was turned down by the voters.

Part of the shortfall came because the Tennessee Valley Authority lowered its in lieu of taxes payments to the Muhlenberg schools from $10.5 million in 2012 to $9.7 million in 2013 and $5.7 million the following year.

McCarty said the plan he presented to the school board last week calls for the district to become "financially secure in order to consistently provide the necessary resources for students, teachers, and support staff for educational needs" and to target "three to four major processes that need to be improved in order to ensure resources are used efficiently, with a target of reaping $400,000 in cost savings over a three year period."

What that means, he said, is "we plan to maintain a minimum of two months’ operating expenses above the state-required contingency level."

McCarty said, "Through attrition, we will reduce the labor expenses to 80 percent or less of the overall budget. By its very nature, the cost of maintaining faculty and staff consistently is the largest expense in virtually any school system or educational institution."

He said, "As circumstances have reduced our funding, those circumstances require us to focus on efficient staffing to meet the needs of our students."

McCarty said the district will "continue to use the purchase order system in an effort to decrease accounts payable by 2 percent annually resulting in a 6 percent or greater reduction over three years. A more efficient use of the purchase order system helps us get more bang for the buck."

He said the district plans to implement "a consistent hiring process to minimize and then prevent district overstaffing. That should result in consistent reduction of staff annually to achieve a 2 percent overall decrease within three years."

McCarty said, "The bottom line is that when we had more funding available from TVA, we could offer more elective subjects. With that resource eliminated, we must focus our resources on curriculum that is required and/or that appeals to a broad group of students."

He said the plan calls for the district to use its current resources "efficiently to maintain school facilities to ensure students are in a learning environment conducive to education. We will ensure that major building issues are corrected within the 12-month period following reporting."

McCarty said the district will adopt a 4 percent increase in property tax revenue each year for the next three years.

"That is the highest level the law requires without being subject to recall," he said. "Circumstances dictate that we take this action at this time out of necessity."

McCarty said the school system plans to create "an equitable, consistent process for determining staffing needs and levels at all schools and facilities."

He said, "We intend to redesign the purchase order process to increase efficiency and productivity by consolidating all purchase orders into a unified system. This process helps us get the best prices available to school districts."

And McCarty said the district will ensure that all contracts are necessary and maintained effectively.

"We have no room for unnecessary expenses," he said. "Therefore, we need to eliminate any contractual agreements we can that are not as efficient or effective as possible. Of those contracts we retain, we must ensure that they also are as efficient as possible."

Other objectives in the plan include providing educational opportunities to all students to become college and/or career ready upon high school graduation, employees abiding by the education professionals standards and the employee code of ethics, maintaining the climate and culture in all schools and throughout the district as welcoming for parents and community members, communicating staff and student successes, celebrations, and exceptional student achievements by publicizing them through various media and recruiting, hiring, and retaining highly qualified staff.

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