CHAFFEE SCHOOL BOARD CUTS STAFF, SPENDING

CHAFFEE, Mo. -- The Chaffee Board of Education has reduced staff positions and otherwise tightened the district's budget to increase fund reserves over the next year.

Interim Superintendent Dr. Arnold Bell said the school board hopes its actions of last week will improve low fund balances that resulted from completion of a building project at the high school last year. More than $1.3 million of the district's $1.68 million reserved balances went toward the project, which included construction of classrooms, a cafeteria and activity center.

Bell said the district projects fund balances of $454,803 when the fiscal year ends June 30. The balance is about 4 percent of projected expenditures and well below the state-recommended 10 percent mark.

"We're nearing the financially stressed mark for our balances," said Bell, who was named interim chief of the district last month. "We didn't cut programs at all, but it will be a lean budget year," Bell said.

Missouri school districts are required by law to maintain balances of at least 3 percent of budgeted expenditures to sustain adequate cash flow. The state recommends fund balances of at least 10 percent of expenditures to ensure there is enough cash on hand to cover expenses for at least a month.

Should a district drop below the 3 percent mark, it would be placed on a state watch list for financially stressed schools. The designation means the school board could waive its Proposition C rollback without a vote of the people but would be required to freeze salaries and administrative costs until the district could build a 3 percent reserve fund in the incidental and teachers funds.

If the situation didn't improve within a designated period, the district could be declared insolvent, and students would be distributed to neighboring districts.

"There is no provision in the law for a state takeover of districts operating completely in the red or at low levels," said Geri Ogle, coordinator of administrative services for the Department of Elementary and Secondary Education. "However, the financial condition of districts may negatively impact instruction of students, and if that happened the district could lose its accreditation, and if nothing turned around, be closed and have its students reassigned."

Ogle said financially stressed districts and those that potentially could be designated as financially stressed by July 1 will be notified by the state within the next two months. No Missouri district has ever been declared insolvent by the state. Kansas City School District is the only unaccredited district in the state, a status gained due to instructional problems rather than financial ones.

Bell said a number of budget-reducing measures were approved by the school board Thursday night to offset the low reserves. Eight staff positions were cut from the budget, including four high school teachers, one elementary school special-education teacher and three support staff.

In addition to the staff reductions, teachers will receive no additional salary increases besides incremental increases for years of service and advanced degrees. And no grants requiring a district match will be accepted unless they were previously written into the budget, said Bell.

He said such measures could get reserves back up to the 10 percent mark within three years.

"We're tight. Class sizes may be a little larger than normal, and it's made a difference in scheduling classes at the high school," Bell said. "We're just trying to do things in-house.".

Where are the cuts?

* Eliminated 8 staff positions, including four high school teachers, one elementary school special-education teacher and three support staff.

* Teachers won't receive additional salary increases besides incremental increases for years of service and advanced degrees.

* No grants requiring a district match will be accepted unless they were previously written into the budget.