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CAB Financial Woes Could Result in Force Reductions
March 21, 2007 - A questionable budgeting decision from 2005 and decreased student enrollment this year have delivered a potent one-two punch to the Charles A. Beard Memorial School Corporation's finances that could lead to teacher layoffs.
Superintendent David McGuire shared this news with school board members in a weekly memo dated March 9. As his regular practice has been since taking over as CAB's top administrator, McGuire voluntarily provided - without requiring a formal record request - a copy of this memo to The Banner along with a packet of other materials given to board members in advance of last night's regular monthly meeting.
"Although I was warned about some negatives regarding CAB when I investigated the superintendent's position, I was assured by several people that CAB was in solid financial shape," McGuire wrote in the memo. "Those assurances were wrong."
McGuire said that the decision not collect the maximum amount of property taxes available for CAB's 2006 General Fund budget ended up costing the school corporation $307,000 this school year. Criticism of this budgeting decision was first aired last August by the independent consultant hired to prepare CAB's proposed 2007 budget, who told the school board he was unaware of any other school corporations in the state that had left property taxes for their General Fund uncollected.
In addition to this budgeting decision from the year before, McGuire said a drop in student enrollment this school year has also taken it's toll. In his memo to the school board, he said the amount of support CAB receives from the state is $289,000 lower than it would have been had enrollment remained steady. McGuire also said that enrollment is expected to drop again next year, although he estimated the loss would be closer to 36 students than the 83 projected by the state.
McGuire told board members that CAB will have to address the nearly $600,000 hit to CAB's General Fund "in as many ways as possible." He said he has already begun discussing possible layoffs with the local Classroom Teachers Association.
"(Reduction in force) is a serious issue," McGuire said in the memo, "but unavoidable when we are losing both students and money." He also said the school corporation is looking at ways to reduce General Fund expenditures and move expenses to other fund lines, and that "an austerity plan for the 20072008 school year" will be presented at the April school board meeting.
McGuire also addressed "recent criticism over wage adjustments" in his memo to the school board. He said recent personnel actions - which have included the school board's approval in January of 40-percent and 21-percent raises, respectively, for CAB's transportation and food service directors - had "actually resulted in savings to the general fund … a concept that will be lost to many because of the odd nature of school financing."
With respect to the proposed budget CAB submitted to the state last fall, McGuire advised the board that the state has yet to approve it. "We are operating," he said, "as are all schools and government entities, without a state approved budget for the current calendar year."
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