OSWEGO — As the Oswego City School District attempts to pull itself out of a multi-year, multi-million dollar budget hole, officials say they are looking for solutions to deal with the district's new fiscal reality.
Superintendent Dean Goewey introduced the district's most specific budget proposals so far for the 2016-2017 school year earlier this week, with the proposed cuts of approximately 50 full-time positions and several athletic programs — including all modified sports — sending shock-waves through the Oswego community.
District officials have blamed decreasing revenue, low reserve funds and the constant expansion of benefit and material costs for the wide-ranging cuts.
The district has proposed a revenue-based budget, where the expenditures and revenue for the 2016-2017 budget both fall at $79.5 million. That total represents a 4.2 percent, or $3.3 million, decrease from last year's budget.
Falling revenue, according to district officials, is due in part to a number of compounding financial issues making the deep cuts necessary.
The district's revenue took a large hit with the $2 million plunge in cash collected from a PILOT agreement with Exelon for its Nine Mile Point Nuclear Power Station. The district is also not using reserves to support the budget, meaning the $3 million in reserves used for last year's school budget needs to be generated through new revenue or will result in cuts.
The district is not proposing to use reserves after the state determined that due to heavy reliance on reserves for past budgets, the district was "susceptible to fiscal stress." The district currently has $4.9 million in reserves and $4.1 million in its fund balance, down almost $10 million from its 2012 totals.
"We had $5.6 million less to work with, but costs were greater and we had to fill that void," said Superintendent Dean Goewey, who said a "minimal" increase in state aid exacerbated the perilous fiscal environment and all expenditures – such as salaries, benefits, transportation and health care – have seen increases.
For the 2016-2017 budget, the district received an additional $2.6 million in state aid; however, only $900,000 is foundation aid, which is funding the district can use at its discretion. The total aid for the district is $23.8 million, which is a 12 percent increase.
To go along with the personnel and athletic cuts, the district is asking voters to approve a 2.5 percent tax increase. Taxes were increased 9.7 percent in last year's budget.
District voters will go to the polls on May 17 to approve or reject the proposed budget, which has caused much consternation with its heavy cuts to instructional and support staff, athletics and other extracurricular activities.
Last year's budget narrowly passed voter approval by a margin of 1,150 to 1,079.
Goewey has maintained the 2016-2017 budget would be "solely revenue based," and the district is no longer able to dip into its dwindling reserve funds.
"We're asking the community to support a very small levy increase," said Goewey, noting the 2.5 percent increase represents $704,000, or 12 percent of the $5.6 million gap the district faced.
If voters reject the budget in May, the district will have three options moving forward. Goewey and the board of education can re-submit the same budget and attempt to change voters' minds on the plan, or submit a modified budget. Both of those options will require another public vote.
Should the re-submitted or modified budgets fail that public vote, the district will be forced to adopt a contingency budget, which would set the tax levy at the $28.1 million used in the 2015-2016 budget in accordance with state law.
The $704,000 that would have been generated in additional tax revenue had the budget been approved would then need to be offset by more cuts in programming and staff.
"Being forced to use a contingency budget makes an already horrible situation incredibly worse," said board of education President Kathleen Allen. "Not only would be unable to restore anything, we would be forced to eliminate even more programming by over $700,000." District officials are also hoping to see some fiscal relief provided by the unions, which represent district staff. All four district bargaining organizations are due for new contracts in June of this year.
The four unions consist of the Oswego Classroom Teachers Association (OCTA), the Association of Administrative Personnel (AAP), the Central Office Administrators/Supervisors Association (COASA) and the Civil Service Employees Association (CSEA).
During Tuesday's meeting, Goewey and board President Kathleen Allen recognized AAP and COASA for agreeing to a one-year freeze on salary increases. According to the collective bargaining documents provided by the district, members of both unions are eligible for an annual 2 percent base salary increase as well as longevity bonuses.
Multiple requests for comment from AAP and COASA leadership were declined.
Roger Sprague, president of OCTA, said in a statement there was "still work to be done." "We hope the district will continue to work with the associations in order to create a fiscally responsible budget which maintains their responsibility to our community and to the future of our educational system," said Sprague. "We believe there is still work to be done, and the OCTA hopes the district will continue to work in collaboration with the associations in the upcoming weeks to avoid cuts that would damage the quality of education the youth of our community deserves." CSEA, which represents non-instructional personnel in the district, confirmed it has been in "informal discussions prior to formal negotiations recognizing the difficult financial situation the district is in." "All options are being discussed, including a change to the health insurance plan and wage tree, are certainly something we're willing to talk about," said Mark Kotzin, CSEA spokesman. "Our main concern is that if there have to be any cuts, they're evenly spread out to provide minimal pain and impact to the students.
"Whatever measure we agree to with management, we try to do as much to maintain employment and benefits to our members who are the backbone of the district and provide a safe, healthy environment." According to district officials, unless OCTA and CSEA agree to similar freezes to AAP and COASA by the June 30 expiration of the current contracts, "steps and stipends" previously negotiated will take effect, further burdening the district.
"I'm hopeful that this budget will be incredibly eye opening to the unions, in negotiating a new contract," said Allen. "We are not the wealthy district we once were. We cannot continue to agree to financially unsustainable contracts."