Letter from Dr. McDaniel to staff regarding RIF
Letter from Dr. McDaniel to staff regarding RIF and restructuring
Posted on 02/15/2013

First, let me say that this was an arduous task that we have undertaken in the last few weeks.  Actually, it has been an issue I have been struggling with since I first looked at the budget process shortly after December 1.  There have been many sleepless nights and days scouring budget line items that did not match expenditures and expected revenues.  Now those numbers have names and faces that make these decisions all too real and painful. This is something that no one wanted to do from the beginning.  The process has been difficult and it will be felt in our school system for some time.  We entered this process with the goal of retaining the integrity of our education programs for children as the top priority while meeting revenue projections.  I feel that this process, while very, very hard to implement, will help us meet those objectives.  

To those we are not able to offer a contract or a position next year, no words can express the sorrow that I feel in my heart that this decision had to be made at this time.  You and your family are in my prayers.  It is my pledge that this school system will help you in any way possible in this transition.  I have already been in touch with professional associations to enlist their help in assisting our employees with information and services.  I trust that by making this decision early, we have given you the best opportunity to secure a new position for next school year.  That was my intention in beginning this process so early and not waiting until closer to the time contracts are due.

For those not impacted by the reduction in force, there will be restructuring and sacrifices still required to continue quality educational services to children in our schools and balance the General Fund Budget.  We have come a long way together since these budget reductions from the state began in 2003.  The actions taken this year will allow us to stay fiscally sound while keeping our programs and services in place for children.  Although delivery of some programs and services will certainly change, we have not completely eliminated a program or service.  Providing a quality education for a quality life for the children of our community will continue to be our mission. 

At this time, I would like to outline the framework of our restructuring efforts to meet the needs of children and our community.  The RIF and restructuring will impact every level of our school system.  There will be reductions and changes in the central office, school administration and in the classroom.  I will share details of our restructuring plan in outline form because this will include a great deal of information and will be difficult to share in a narrative format.

First, let me address why this was necessary.  I gave an extensive presentation to the board at the February meeting that outlined our budget situation but I think it is important for everyone to understand where we stand with our school system budget.  I want you to understand issues we are dealing with on the revenue and expenditure side for 2014 budget projections.

Why a RIF and restructuring is necessary

Budget

The system’s budgeted expenditures for 2013 was $94,526,867.  That was the original budget plan before we were able to reduce those expenditures with Reduced Work Days (commonly referred to as furloughs).  Anticipated revenue for Fiscal Year 2014 is $86,072,000.  Right away, you see that just budgeting to keep everything as is in the system would leave us close to $8 million short in revenue to cover costs.  We all know that keeping things “just as they are” in a budget is pretty much impossible due to increased costs in operation.  Additionally, we have cost increases we know are coming for next year.  Those include: increases in certified step raises, TRS matching increases related to step raises, classified health matching increases and other costs that would push our expenditures more than $2 million higher.   That means that the school system would actually need approximately $10 million dollars in additional revenue to meet expenditure projections for next year.  Reduced  Work Days would clearly not make up that difference.

Where could we get the money?

Tax Increases
The board could consider tax increases, and still may look at that to offset some expected shortfall in revenue.  However, the school system is currently at 18.588 mills and can only levy a maximum 20 mills by state law. A maximum tax millage increase would not bring in the increase in revenue to have a major impact on the budget deficit.

Reduced Work Days
Each day saves only $300,000 and we can only reach this maximum amount of savings if the Reduced Work Day is taken from the school calendar for students when all employees would be working and eligible to be included.  Clearly, making budget this year using just Reduced Work Days alone would not balance the budget.   Reduced Work Days and reducing the school year will be a part of the answer but it would not cover the entire shortfall.

Using Ending Balance funds
The school system seeks to have an ending balance at the end of the school year to make sure we are able to pay bills between the end of the school year and the time we begin to collect taxes again.  The system needs at least $7 million in ending balance to allow us to make payroll and pay bills without borrowing money during the summer.  Taxes come in primarily in the time period between November to February.  The problem is that bills continue to come in and must be paid throughout the year.  We use Ending Balance Funds to pay bills during the low times of cash flow for the system.  In optimal circumstances you want to replenish those funds so that we will be able to pay bills again the next year.  We are working with vendors and those we pay on an annual basis to reschedule bills to become due at other times in the year to reduce the demand during July and August.  This will help but we still must have the funds available to meet payroll for our employees.  This past summer the system came very close to being in the position of having to borrow money to meet obligations.  At one point, the system had expended 90 percent of our Ending Balance before new revenue began to come into the school system in the fall.    

If you looked at the Rome News article this week about Ending Balances of local government agencies, you saw that our ending balance is much lower than the City of Rome or Floyd County government balances.  We do not hold a “rainy day fund.”  We keep just enough in ending balance to meet our obligations and keep us a fiscally sound school system. 

With these options clearly not able to get us to a balanced budget, the only other option was to look at how we are spending money and how changes in that area may help us to get our budget expenditures in line with anticipated revenues. 

Where money is spent

90 percent of the system budget is spent on salaries and benefits.  When you look at the overall budget for 2013 ($94 million)and the shortfall we were projecting for 2014 ($10 million), you can see that we could cut almost all spending not associated with personnel and still not be able to balance the budget.  Of course you can’t have school without opening the buildings, running the buses, and providing the materials needed to operate a school or class.  Some funds must be expended in the non-personnel related budget side. 

Our system has experienced $50 million in budget reductions from the state since 2003.  We have seen our expenditure percentages for salaries and benefits rise from 87 percent of the budget to the current 90 percent by cutting or delaying spending on non-personnel items.  Other school systems in our area have made cuts to personnel and dealt with these difficult decisions in recent years.  We had been able to avoid making significant cuts to staff.  As we looked at how other systems across the state have reduced personnel cost and the percentage of our funds committed to personnel in our school system, it was clear, the time had come to look at personnel to get our system budget back in line with the new reality of school funding in Georgia.   
 
With that information in mind, the next area I will cover is the planned restructuring of our service delivery in schools to help us continue to provide the programs and services vital to the education of children while coming in line with our revenue projections.

Restructuring Plan

1.  Central Office and Central Administration restructuring
There has been significant savings in positions at the central office since December of 2012 and the savings that the elimination or non-replacement of nine positions will continue.  Positions reduced or unfilled included:  3 Directors, 5 Coordinators, 5 Certified, and 4 Classified.
17 positions eliminated 
Savings = $990,00

2.       Administrative Contracts Reduced
Central office administration and school administrators will have contract days or supplements indefinitely reduced by 5 days for 2014 and 5 additional days in 2015.
5 day adjustment in administrative contracts for 2014
Savings - $127,200 (FY2014) 
Savings - $92,000 (FY2015)

3.       Restructure K-12 assistant principals elimination of Instructional Coaches with administrative duties
Assistant principals will be restructured to have two assistant principals at the high school level, one at the middle school level, and ½ time assistant principals at the elementary level.  Instructional Coaches had replaced assistant principals in some elementary schools and held similar responsibilities. (Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
9 positions eliminated 
Savings = $567,100

4.       Change in Contract Days for Head Football Coaches
High school football head coaches will be indefinitely reduced 5 days in 2014 and another 5 in 2015.
Savings = $15,322  (FY2014)
Savings = $15,322 (FY2015)

5.       Eliminate Interventionists
These positions were added with ARRA Federal Stimulus Funds two years ago.  The ARRA funds were only provided for two years and are no longer available. (Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
6 Positions eliminated 
Savings = $346,200

6.       Restructure services provided by Floyd County Education Center
The programs and services of the Floyd County Education Center will be restructured but services will continue for students in the alternative setting and for those in the PLC graduation program.  The alternative program will relocate adjacent to the Compass program on the Coosa High campus.  The PLC will move to the College and Career Academy campus.  The restructuring will allow for better utilization of staff with other programs. (Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
16 positions eliminated  
Savings = $1,104,020

7.       Restructure K-12 Counseling program
The restructure will provide one counselor at the high school level on a 195 day contract, one counselor at the middle school level on a 190 day contract and a half-time counselor at the elementary level on a 190 day contract.  The half-time counselor situations will be filled with one counselor serving more than one school.  All schools will continue to have counseling services. (Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
9 Positions eliminated
Savings = $624,844

8.       Eliminate positions not funded by FTE
These are system-wide certified positions not funded by FTE(Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
20 positions eliminated 
Savings = $1,140,000

9.       Restructure K-12 media services
Media services will be restructured to provide a ½ time media specialist and ½ time media specialist paraprofessional for each school.   One media specialist and one paraprofessional will share services between two schools.  School media centers will continue to function the entire school day at each school. (Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
9 media specialist positions eliminated
10 media center paraprofessionals eliminated
Savings = $768,262

10.   Eliminate High School 101 course
 (Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
 4 positions
Savings = $228,000

11.   Communities in Schools Funding
The funding to the Communities in Schools program will be reduced.
Savings = $33,600

12.   Restructure K-12 Secretaries
Secretaries in schools will be restructured to have three secretaries in high schools, two in middle schools and two in elementary schools.  One secretary will be utilized at the College and Career Academy.
11 positions eliminated
Savings = $318,481

13.   Restructure of scheduling in middle school
(Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
8 positions eliminated
Savings = $456,000

14.   Restructure custodial/maintenance services
Savings = $150,000

15.   Restructure Fine Arts and Physical Education in small elementary schools
Fine arts and PE will be restructured to provide one fine arts teacher and one physical education teacher at small elementary schools. The schools are Cave Spring Elementary, McHenry Primary and Midway Primary. (Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
3 positions eliminated
Savings = $171,000

16.   Restructure elective classes K-12
(Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.)
 4 positions eliminated
Savings = $228,000

17.   Reduced Work Days 
The system will have 10 Reduced Work for the 2013-2014 school year. (5 planning days and 5 school days)
Savings = $3 million

18.   Freeze Step Raises for classified personnel
Savings = $214,595

19.   Eliminate Board Paid Life for employees
Savings = $108,800

Total Savings from restructuring = $10,591,424

Certified personnel in the restructured positions were considered for teaching positions according to the system-wide RIF Plan process.  Thirty-four (34) personnel were reassigned to teaching positions as the employees were considered using the system-wide RIF Plan process.

Number of Personnel Impacted by the RIF at each school

Alto Park – Full-time (3 certified, 3 classified); Part-time (1 certified, 0 classified)
Armuchee Elementary -
Full-time (4 certified, 0 classified); Part-time (0 certified, 0 classified)
Armuchee Middle -
Full-time (3 certified, 3 classified); Part-time (2 certified, 0 classified)
Armuchee High -
Full-time (2 certified, 3 classified); Part-time (0 certified, 0 classified)
Cave Spring Elementary
- Full-time (0 certified, 1 classified); Part-time (1 certified, 0 classified)
Coosa Middle -
Full-time (3 certified, 1 classified); Part-time (0 certified, 0 classified)
Coosa High -
Full-time (7 certified, 2 classified); Part-time (0 certified, 0 classified)
Garden Lakes Elementary -
Full-time (5 certified, 0 classified); Part-time (0 certified, 0 classified)
Glenwood Primary -
Full-time (5 certified, 0 classified); Part-time (1 certified, 0 classified)
Johnson Elementary -
Full-time (2 certified, 3 classified); Part-time (0 certified, 0 classified)
McHenry Primary
- Full-time (1 certified, 1 classified); Part-time (0 certified, 0 classified)
Midway Primary -
Full-time (3 certified, 2 classified); Part-time (0 certified, 0 classified)
Model Elementary - Full-time (1 certified, 0 classified); Part-time (0 certified, 0 classified)
Model Middle -
Full-time (2 certified, 3 classified); Part-time (0 certified, 0 classified)
Model High -
Full-time (5 certified, 3 classified); Part-time (0 certified, 0 classified)
Pepperell Primary -
Full-time (6 certified, 0 classified); Part-time (0 certified, 2 classified)
Pepperell Elementary - Full-time (1 certified, 1 classified); Part-time (0 certified, 0 classified)
Pepperell Middle -
Full-time (7 certified, 2 classified); Part-time (0 certified, 0 classified)
Pepperell High -
Full-time (7 certified, 2 classified); Part-time (0 certified, 1 classified)
Other programs -
Full-time (1 certified, 3 classified); Part-time (0 certified, 0 classified) including College and Career Academy and FCEC programs.
Central Office - Full-time (0 certified, 2 classified); Part-time (7 certified, 1 classified) other Central Office cuts were vacant positions.

Total personnel impacted by the RIF

Full-time (68 certified, 35 classified); Part-time (12 certified, 4 classified)

How decisions were made
The Reduction in Force plan outlined in my presentation to the board at the February Board of Education Meeting was used to determine personnel included in the Reduction in Force.  You will find the PowerPoint outlining the complete RIF plan on eBoard located on the Floyd County Schools website.  The PowerPoint is under the Reduction in Force agenda item on the February agenda on eBoard.

I know that everyone is exhausted and this was a lot of information to digest.  Please take time to look this over closely more than once.  I just wanted to make sure that every employee knew why this difficult process was necessary, how we plan to restructure and continue to deliver a quality educational program for children and the impact this RIF has had on each school. 

We have been told by media representatives in town that a list of names included in the RIF will not be published.  We applaud the media for being mindful of those individuals and families impacted by this RIF.  I feel that this was a very appropriate position.  This is a very private matter than should be left to the individual to share as they feel appropriate and necessary.

If you have questions, please contact our Human Resources Department.  As I stated earlier, we will work with area agencies and professional organizations to help our people in any way possible.

May God bless you and your family.

Dr. Jeff McDaniel
Superintendent
Floyd County Schools