Photo by Ruth Heide Concerned residents and teachers fill Centennial school’s gymnasium on Thursday to discuss dire financial straits and consequences. The group of teachers seated above are wearing “reject” circles on their clothing to illustrate their no-confidence vote on the board.

State steps in: Cuts expected



By RUTH HEIDE

SAN LUIS — Out of compliance with the state and in the red again, the Centennial School District will have to reduce staff numbers by as many as nine people by December.

“We have no choice at this point,” said Centennial Board Member Charlie Jaquez during a Thursday meeting attended by a large group of teachers, parents and students who were upset about the proposed mid-year cuts. The meeting had to be held in the gymnasium to accommodate the crowd.

“It’s going to be a horrible painful thing,” Jaquez said.

“We did everything we could,” said Board President Michelle Gallegos.

“When we make cuts, we don’t take them lightly,” added Board Member Alonzo Lobato. “It affects our kids just as well as it affects yours.”

One audience member spoke the feelings of many present on Thursday evening. “People are trying to tell you we would be very upset if the teachers got cut.”

One student said she did not understand why the cuts had to be made now.

Gallegos responded, “I don’t think we realized exactly the situation we were in.”

Colorado Department of Education Director of Public School Finance Vody Hermann, School Finance Consultant Kirk Weber and Interim Centennial Superintendent Mark Maksimowicz told the audience how dire the school district’s situation had become.

For the second time in three years the state has had to intervene in the school district’s financial affairs.

Three years ago Hermann told the Centennial board the district’s debt ratio was the worst she had ever seen. Since that time the school board hired - and fired - another superintendent.

The board on Thursday night laid blame at the former superintendent’s feet and took some of the blame itself. “Yes there was mismanagement on our part,” Jaquez said. “We approved what that administration said they could support.”

Hermann told the board and audience on Thursday that the district is out of compliance with the state in various areas including deficit spending and not maintaining its mandated TABOR (Taxpayers Bill of Rights) reserve.

She said the district will be placed back on accreditation watch with support from the state department of education “until we see things improving and we are meeting an improvement plan which is being put in place at this point to go forward. It definitely needs to be corrected.”

Weber pointed out that after the last corrective action by the state in the 2005-2006 school year the district began going downhill again. As early as the next budget year the district spent $184,447 more than its revenues and the following year, 2007-2008, spent $361,147 over its revenues leaving the district with a deficit fund balance as it entered this school year.

At the same time, he pointed out, the district was losing students each year. During the 2005-06 school year the district lost 19 students and the next year 13.

Both Hermann and Weber said the district’s budget must be reduced immediately because the district does not have the revenues to support its budget.

Weber said a $380,000 reduction would eliminate the deficit and cover TABOR reserves to bring the district back into compliance.

In addition to the financial constraints of declining enrollment and deficit spending, the Centennial school district has to pay back the state $80,000 for violations dating back to 2002; pay back (by June 25, 2009) the state treasurer $250,000 for an interest-free loan to assist with cash flow; and make up for unpaid property taxes with a 77-percent collection rate.

Hermann said she is recommending that the district board request a $320,000 loan from the state to help with current cash flow problems. The loan would have to be paid back over a couple of years, she said.

She said the money would not mean the district could keep its staff, however, “because there’s overspending that’s going on. The spending has to come down to what the revenue is.”

Maksimowicz said the “easy part” is reducing materials, supplies and conference registration fees by $216,000 for a one-time cut this year. Those items will have to be re-introduced into next year’s budget, he said. Not having funding for minimum supplies per student as required by the state will put the district into another noncompliance status, he said.

He, Gallegos and three staff members are serving on a steering committee that will bring back recommended cuts to the board on November 12 with board decisions on those recommendations expected on November 20.

The state and district officials told the audience that if cuts were not made soon, the district’s financial condition would worsen and the very existence of the district would be threatened.

Gallegos said consolidation with Sierra Grande might be something the school district would have to consider at some point. Alonzo Lobato added, “That has not been pushed forward by this board because we feel the same way that this school is part of our community and we want to keep it here but we have to be sustainable enough to keep our school.”

State Senator Gail Schwartz, who helped Centennial acquire funding for a new school building, said, “My heart goes out to you.” She said she has pushed for educational legislation such as the BEST bill and would continue to do so. “As a state we really want these opportunities to be here and we are putting our money where our mouths are,” she said.

Schwartz also suggested that the community form an accountability committee to work with the school administration and board.

The state officials assured the audience that the money for the school’s construction project is separate and safe from the general fund budget. “Seven million is in your bank account; $5 million is in our bank account,” Hermann said. She explained that the $7 million is money approved through a bond election locally and the $5 million is from capital construction funds through the state.

The state is still working with the district to scale back the new school’s design to better fit the $12 million budget, Hermann said. She added that the construction project would probably not resume now until next spring, so the occupancy date would not be until 2010.

Maksimowicz, who assumed the superintendent’s duties about two months ago, said he is committed to working out the district’s financial problems before he leaves in June. “Never again for this district is part of my vow.”