WHAT'S NEXT -
* The Hamilton County Board of Education's finance committee and the citizen's advisory panel will meet Tuesday at 5 p.m. at 3074 Hickory Valley Road.
COMMITTEE MEMBERS -
Members of citizens advisory panel appointed by the Hamilton County Board of Education and Superintendent Jim Scales to "engage the community in the budgeting process" include:
Robert Belcher, Decosimo & Co.
Larry Buie, Chattanooga Gas Co.
Al Chapman, City of Chattanooga
Mike Costello, Decosimo & Co.
Cindy Dearing, Tennessee State PTA president
Bill Eldridge, retired school administrator/former school board member
Kurt Faires, Chambliss, Bahner & Stophel
Bruce Garner, Chattanooga Fire Department
Renee Gibbs, assistant at Unum
Bob Greving, chief financial officer at Unum;
Eddie Holmes, Chattanooga Housing Authority board member
Curtis Johnson, Bi-Lo manager
Tom Kinser, retired CEO of BlueCross BlueShield of Tennessee
Travis McDonough, Miller & Martin
Carol Newton, chief financial officer of Memorial Hospital
Jeff Olingy, Chattanooga State Technical Community College
Irvin Overton, retired CEO of Erlanger hospital
Chantelle Roberson, Miller & Martin
Rick Skiles, Tennessee-American Water
Grant Sowder, East Ridge Elementary PTA president
THE $20.2 MILLION QUESTION -
Below is a summary of the expense growth in Hamilton County Schools' budget that led to the projected $20.2 million shortfall next year:
* $5.2 million: Medical and other insurance
* $1 million: Transportation
* $2.4 million: Utilities
* $2.5 million: STEP salary increase
* $2.8 million: Personnel for the new East Hamilton High School
* $1 million: Additional personnel for Signal Mountain Middle-High (added a senior class)
* $2 million: Textbooks
* $1.8 million: Retiree medical benefits
* $1.4 million: Instructional reserve
* $150,000: Special education contracts
* $20.2 million: Total projected deficit
Source: Hamilton County Department of Education
The Chattanooga City School system closed 16 elementary schools in 1989: Avondale, East Chattanooga, Mountain Creek, G. Russell Brown, James A. Henry, Oak Grove, Highland Park, Ridgedale, Elbert Long, Booker T. Washington, St. Elmo, Charles A. Bell, Piney Woods, Sunnyside, Eastdale and John A. Patten.
The city and county school districts merged in 1997. Since then, seven schools have closed:
Signal Mountain Elementary, Bachman Elementary, Apison Elementary, Mary Ann Garber Elementary, Franklin Middle, Howard Elementary and White Oak Elementary.
Source: Newspaper archives
2009 SCHOOL REVENUES
* 40 percent: State education funds (Basic Education Program money)
* 39 percent: Local property tax
* 19 percent: Local sales tax
* 2 percent: Other
Source: Hamilton County Department of Education
Public schools receive adequate local taxpayer support, which will force administrators to attack "inefficient" spending to wipe out a $20 million deficit, according to a recent budget analysis.
"This is not a revenue issue from the county's perspective. Local funding appears to be sufficient," said Bob Greving, Unum's chief financial officer who completed the analysis for a citizens advisory panel charged with reviewing the budget.
"We're actually getting more from the county than other districts," he said.
Hamilton County allocates a greater percentage of its property tax revenue for schools - 49.6 percent - than Davidson, Knox or Shelby counties, his report shows. Hamilton County spends $2,667 in local property tax revenue per student, second only to Davidson County, data show.
"Hamilton County government makes a huge commitment to the department of education, as we should," said County Commission Chairman Jim Coppinger. "The taxpayers of this county have obviously stepped up."
Schools Superintendent Jim Scales has said he will not ask the County Commission for more money, which is good since Mr. Coppinger said there would not be a tax increase this year.
No one should look to the state for more money for schools next year either. Gov. Phil Bredesen is wrestling with a projected shortfall of up to $900 million, Mr. Greving said.
His answer? A radical overhaul of the way the county operates its school system, including a shift away from small, overstaffed schools.
"There's not been a lot of efficiency squeezed out of this school system," he said.
Members of the Hamilton County Board of Education finance committee and members of the citizens advisory panel will meet Tuesday to discuss Mr. Greving's report.
STAFFING, FACILITIES HIGHLIGHTS
Mr. Greving's analysis shows that compared with Tennessee's other large school districts, Hamilton County Schools has one staff member for every six students; the average in other major districts is one staff member for every eight students.
The report suggests the school district has about 1,420 "excess staff" members; cutting them would save $54.4 million.
Compared with other major school districts in the state, Hamilton County also has more schools for fewer students: The average number of students per school is 513 compared with an average of 620 among the other districts, the report shows. Closing 14 "excess" buildings would save about $5.2 million.
About 80 percent of Hamilton County's schools enroll too few students to cover costs of maintaining, heating, cooling and staffing, school records show.
"We're operating on a philosophical approach that embraces small schools," Mr. Greving said. "It's an inefficient model."
The options are few - consolidate schools and trim staff, he said.
"It's not any one thing that can be fixed in the near term to make a $20 million hole go away," he said.
Cindy Dearing, president of the state's parent-teacher association and a member of the citizens advisory committee, warned against deep cuts, saying the reductions will affect teachers, students and school community.
"If you volunteer in schools as much as I have, you see things a little differently," she said. "You just see all of the hard work that parents, the PTA and the teachers put into a school ... you can't always look at that with a dollar sign."
Faced with a daunting budget challenge, school board members are considering a range of cost-cutting options, including across-the-board salary freezes, increasing employee health insurance premiums or copayments, reducing central office staff, consolidating or closing schools, eliminating assistant principals and offering bonuses to workers who retire this year.
Kurt Faires, a lawyer with Chambliss, Bahner and Stophel and a member of the advisory panel, said that over the years, the school system has allowed "some creep" in its personnel and buildings count.
"I think it was probably the political path of least resistance until a crisis arose," he said. "We need to take a machete to this thing and make it right so we don't have this problem every year."
Mr. Greving's conclusion that balancing the budget next year will require cuts to personnel and buildings echoes the message from Tommy Kranz, the district's chief financial officer.
"I don't know how we can balance the budget without making these tough choices," he said.
Irvin Overton, a former Erlanger hospital executive who also serves on the advisory panel, said school system leaders must step up and make some unpopular decisions.
"They've got a couple of real tough bullets to bite," he said of school administrators. "It won't be pleasant if they do the right thing."
Long term, Mr. Greving said administrators must reduce overall spending because the school system's expenses consistently outpace revenue growth every year. That leaves the school district continuously fighting an uphill battle.
Administrators find themselves up against the $20 million deficit this year, following last year's $11 million shortfall, and projected $15 million and $10 million deficits in fiscal years 2010 and 2011, respectively.
"If you solve the $20 million hole, you'll just have another one next year," Mr. Greving said. "Costs go up 4 percent per year, but funding is not going up. It's a matter of redesigning the way we operate our schools."
Mr. Kranz agreed.
"If we don't, we're going through this exercise every year," he said. "It's not fair to our employees, not fair to our students to create the uncertainty we've got with our budget. I don't think it's right for us as a district to go through this every year."