Schools CFO suggests ways to cut

To significantly trim the operating budget of Hamilton County Schools, Chief Financial Officer Tommy Kranz said the cuts likely would come from the system’s two largest expenses: personnel and buildings.

“You’re going to have to look at your two biggest areas,” he said.

Mr. Kranz estimates an increase in expenses for the 2009 fiscal year, but no revenue gain. He said the school system is facing a $13 million deficit. If significant steps are not taken to correct the problem, he estimated that number would jump to $16.5 million by fiscal year 2010.

“The belief is that (the additional $12.8 million in basic education plan funds) took care of all the needs of the school system,” he said. “That is so far from the truth.”

The school system has lost 1,800 students over the past five years but continues to build new schools, which is costing too much he said. On the other hand, he said, many school buildings are old and need to be replaced.

“It’s an embarrassment when you look at some of our facilities and what our kids go to,” Mr. Kranz said.

A new school that will be located in East Hamilton County is meant to alleviate some of the overcrowding at the middle and high school in Ooltewah. Because 25 teachers at Ooltewah High do not have a permanent classroom, officials with the state Department of Education recently asked Hamilton County to build 25 portable classrooms for the 2008-09 school year.

The portables would cost the school system $2.5 million, but Mr. Kranz said local officials most likely would negotiate another option since the new middle-high school would alleviate the problem by August 2009. If the state will not negotiate, Mr. Kranz said the situation at Ooltewah is an example of several unfunded No Child Left Behind mandates that also are not included in the school system’s budget.

Mr. Kranz also discussed a districtwide phenomenon he called title creep, where, instead of a bonus, longtime school employees are bumped up a pay grade, as a reward for service.

“We’re paying above market for certain positions,” he said.

In his full report on title creep, Mr. Kranz said he will address the many inequalities in the county’s pay scale. As an example, he said there are at least two high school principals who make less money than 33 of Hamilton County’s assistant principals.

Sharon Vandagriff, president of the Hamilton County Education Association, said she has been working recently to bring county commissioners through schools in their districts to educate them on needs.

“Our kids will be affected by any cuts in our budget, and it’s my opinion that teachers are more important than programs,” she said.

When he presents the budget next month, Mr. Kranz said he will not ask the Hamilton County Board of Education or the County Commission for additional funds, because the school system “has enough money.”

Superintendent Jim Scales confirmed that school administrators would have to look at some “shifting of staff and possibly reducing staff,” as well as consolidating schools to balance the budget.

“It’s very preliminary, and we’ll look to make any cuts without doing damage to programs,” he said. “School consolidation isn’t anything we could do at this point; we’d have to work with our board and our community (first).”

School board Chairman Kenny Smith said he would be in favor of consolidating schools and selling any unused facilities the school system owns in order to “cut away any fat we don’t need.”

“Tommy thinks we can achieve all the goals of our five-year plan and balance the budget without asking taxpayers or the County Commission for more money,” Mr. Smith said. “If he can do it, my hat’s off to him.”

Mr. Kranz, who came to Hamilton County in 2007, gave an overview of the school system’s budget Monday to members of the local Pachyderm Club. He said that 80 percent of the current budget pays for staffing, while about 7 percent pays for facilities.