Janesville59.3°

How much is enough? Teachers see district coffers bulging

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FRANK J. SCHULTZ
February 17, 2008
— How much money should a school district keep in reserve?

That’s another bone that teachers and school board members are picking as their contract dispute continues.


There are no firm rules, but experts advise a reserve fund equal to two to three months of operating expenses, district officials said.


For the Janesville School District, that’s $16 million to $23.9 million, according to a recent district analysis.


The best way to measure what is called the “fund balance” is to look at the end-of-year calculations of all income and expenses, said Lauri Clifton, district comptroller. That calculation is made for June 30, the end of the district’s fiscal year.


The district had $26.74 million in fund balance last June 30.


Then in October, the school board used $1 million of that money to reduce the property tax bill for local taxpayers.


The fund balance has grown by $14 million over the past 10 years, and the teachers say that’s because of their co-pays, deductibles and their good health.


District officials say only $1 million of the growth is attributable to employee health coverage. The rest is bigger-than-budgeted revenue and lower-than-budgeted spending in other areas.


Teachers contend the fund balance has continued to grow this school year because health costs are lower than budgeted, reducing district spending.


The cost of the district’s health coverage is $1.4 million below the offsetting revenue right now, Clifton acknowledged, but it’s no reason to increase spending.


“Since I only track total costs, I cannot tell you if any of the employee groups are having fewer claims or (whether it’s because of) new pricing structures or some combination of the two,” Clifton said.


“We never know when the next rush of high claims will hit or when some catastrophic event will afflict one or our employees, their spouses or dependents, or retirees, Clifton continued. “We hope that never happens, but history tells us we do not live in Utopia.


“To date, we are having a good claims year. Tomorrow may be a different story.”


Still, even $25 million in fund balance could be seen as more than needed. School board members have been asking how they could use some of that money to avoid budget cuts next fall, and the administration is working on a plan.


Teachers also are eyeing the fund. They say it should be used to give them “a fair settlement.”


District administrators say fund balance should never be used for an ongoing expense such as salaries and benefits. The reason is that the money can be used only once, and then it’s gone, while salaries and benefits continue forever.


The district has good reason to keep a healthy fund balance. The money is needed for emergencies. It helps avoid the interest costs of cash-flow borrowing.


A strong fund balance also keeps the district’s bond rating high, which can save millions of dollars when the district borrows for something such as the high school improvement projects now under way.


Too big a fund balance, however, causes “taxpayer concern” and becomes a target in negotiations, district business director Doug Bunton acknowledged in a recent presentation to the school board.


Low pay for Janesville teachers?

Janesville public school teachers are saying they’re underpaid compared to their peers. There’s truth in that statement.


The Janesville Gazette analyzed Department of Public Instruction data on teacher compensation in 17 of the larger Wisconsin school districts and found that in 2006:


-- Janesville ranked last in average-teacher salary, at $44,145.


-- Janesville ranked last when the average salary was combined with the average fringe-benefit costs, at $63,256.


-- Waukesha and Elmbrook districts had the top average salaries, both over $54,000. Beloit, Madison and Kenosha all had average salaries over $48,000.


The Gazette also looked at Big Eight Conference schools and found:


-- Only Sun Prairie—at $42,023—had an average salary lower than Janesville.


And the Gazette looked at seven districts in Rock and Walworth counties:


-- Only two—Milton and Clinton—had average salaries lower than Janesville’s. Both were just over $42,000.


-- Edgerton, Evansville and Delavan-Darien all had average salaries similar to Janesville’s, in the $44,000 range.


-- The two local districts on the higher end were Parkview, at $45,339, and Whitewater, $47,190.



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