CHAFFEE SCHOOLS DODGE 'FINANCIALLY STRESSED' LABEL

CHAFFEE, Mo. -- Chaffee school officials managed to avoid a possible state takeover and tax hike last year by cutting staff and slashing spending.

The district's savings grew by about $318,000 last year, mainly due to "some very stringent spending practices," said public schools superintendent Arnold Bell. He said most of the growth was made possible by leaving three teaching positions and five other positions unfilled.

"We reduced some staff, cut back some expenditures and just made sure we planned a balanced budget," Bell said. "We all worked diligently to make sure that our district stays financially stable."

Bell said the educational programs offered to the district's 600 students did not suffer during the budget cutbacks.

In July 2000, the district's balances had shrunk to about 4 percent of the $3.9 million annual budget, largely because state aid was cut due to declining enrollment. The district also was overspending, Bell said.

State officials warned the district last fall that if reserve balances dipped below 3 percent of the budget -- about $117,000 -- the district would be deemed "financially stressed" and placed on a watchlist.

The designation was created to ensure districts keep enough money on hand for unplanned expenses such as major repairs or other emergencies. Districts with the label may be taken over by the state.

While on the watchlist, state officials may freeze a district's budget -- including hiring new staff or increasing salaries -- until reserve balances are built up to a safe range.

The state recommends districts maintain reserve balances of at least 10 percent of the annual budget.

Bell said the district's balances now exceed state recommendations, and two of the vacant teaching positions will be filled this year.

In addition, financial projections appeared bright enough for the school board to approve salary increases ranging from 3 to 6 percent for the 80 teachers and other staff members on July 10. Even so, Bell said the district will continue to spend conservatively.

"You've got to be careful when you give increases that you plan for future years because once you develop the salary schedule, it's there to stay," he said. "The only way to fix it then is to go backward or freeze it."