Specific school budget cuts considered

Band uniforms. Administrative costs. New textbooks.

Fine distinctions separate trimmable costs from expenses essential to classroom instruction, but members of Nashville’s Board of Education began the hard work of considering specific cutbacks Monday.

With the district facing an $11.1 million revenue shortfall for this current school year, board members and district officials are working to create a plan — fast — to trim expenses before the school year proceeds much further. The district has already enacted a hiring freeze affecting all but absolutely essential positions, like teachers and principals.

On Wednesday, Metro Nashville Public Schools leaders will present to the board a December budget amendment, providing more information about expenditures and revenues to date. Chris Henson, the district’s interim director and financial chief, said that the budget document represents estimates. Numbers in the budget become set in stone once money is appropriated.

Henson said there will be “a number of” changes between the budget and appropriated dollars, due to the significant number of changes that have occurred this school year. These differences will be reflected in the amendment, as will the most current tax revenue figures for public schools.

“We’ll just see what the board ends up wanting to do, once we have more current numbers,” Henson said Monday.

The trouble for the district is that sales tax revenues are coming in below projections. So far this school year, the difference is about $3 million. That’s only a drop in the bucket of the district’s total $627 million operating budget, and sales tax revenues are not the only sources of income for MNPS. But the trouble may continue to grow, as the economy shows few signs of turning a corner soon, even with the Christmas retail season beginning.

About $19 million in funding for the current school year was pulled from the district’s reserve funds. While officials have stated the concerns associated with using non-recurring funds to finance expenses that come up every year, the district does have a reserve fund surplus.

Currently, MNPS has $52 million in undesignated reserve funds. Metro’s Finance Department has a policy specifying that 5 percent of a department’s total budget should be maintained in reserves. MNPS’s reserve balance is still well above those requirements — 5 percent of the district’s operating budget would represent about $30 million.

Last week, board members considered whether the district might tap further into reserve funds to entirely make up for revenue shortfalls, or whether it might be necessary to cut staff, pay or other costs.

Board members proposed specific budget line items for cost-cutting at a meeting Monday. Everything discussed represented an idea, and not a decision or even necessarily a proposal. Administrators will consider, in the coming weeks, specific savings that might be realized by the suggestions.

Board member Gracie Porter asked whether expenses might be trimmed on band uniforms, and whether the district might be able to do without brand-new textbooks next year. Porter also brought up the matter of a more than $5 million internal service fee charged by Metro government.

While many internal service fees were eliminated in the last budget cycle, some remain, including many related to technology. The bulk of MNPS’s technology internal service fee pays for major software applications that manage district accounting, human resources and inventory, according to Lance Lott, chief technology officer for the district. These are services MNPS “outsources” to Metro, Lott said.

“They’re calculated based on actual services the government provides,” Lott said.

Board member Karen Johnson asked school district administrators to consider a 3 percent reduction in central office costs, as opposed to making any cuts whatsoever at the individual school level. She asked MNPS to look in to trimming 120-day contract workers — central office employees who came out of retirement to serve the district on a contract basis, Johnson said — and to possibly consolidate summer school staff and services to fewer facilities. She also asked the district about the possibility of buyouts for qualifying staff members.

Questions of central office efficiency were also raised by newly elected board member Alan Coverstone, who noted that several different entities are currently “calling the shots” at Metro Schools and asked whether the situation might be costing the district money.

“Maybe we need a plan from the Mayor’s Office. Maybe we need a plan from the state,” Coverstone said. “Are we operating at peak efficiency under the circumstances?”

Board member Mark North inquired into the contract the district currently has with Alignment Nashville, an organization founded by the Nashville Area Chamber of Commerce that currently falls under the umbrella of the Mayor’s Office. North also highlighted several areas of high staff increases for the current school year.

Steve Glover, finance chair for the board, asked the administration to consider a number of line-item reductions, including campus supervisors and elementary school reading specialists.

Glover asked the administration to consider these ideas by Dec. 15, and told board members that he believes some cost-cutting actions should take place at or before that time. In the meantime, the budget meeting Wednesday should provide more specific information for decision-making, Glover said.

“I think we’re going to have a much clearer meaning as to the scope of things,” Glover said.

The meeting is slated to begin at 5 p.m. Wednesday, at MNPS’s 2601 Bransford Ave. central offices.