DANVILLE — Faced with a significant decrease in revenue, Superintendent Mark Denman on Tuesday morning unveiled a list of proposed cuts and other recommendations that would save the Danville School District $3 million in the next fiscal year.

“This is a very painful thing because we already have a tightly run budget,” Denman said. “We want to keep our programs going, but we’ll be losing some talented employees, and only doing emergency repairs will really hurt.

“We want to provide as many opportunities as we can for the boys and girls, but there are events outside of our control,” he said, alluding to the steady decline in revenue.

“It falls on me so our future isn’t mortgaged,” he said. “It’s the most fair and balanced approach to the challenge we have.”

The list includes a proposed reduction of 25 positions through attrition, retirements and a reduction-in-force (RIF). Eleven certified personnel would be part of the 14 RIFs.

“These are our recommendations,” Denman said. “The board will have to approve these later this month or at a later date.”

The school board will next meet on March 13; however, Denman indicated a special meeting might be called around March 20 to approve the final cuts and possible RIFs.

The proposed cuts are:

• Eliminate the two school administration managers (SAMs), one each at North Ridge and South View middle schools.
• Eliminate 14 elementary school teachers, eight of whom would be through attrition: 11 classroom teachers, one special education teacher, one music teacher and one physical education teacher.
• Eliminate three middle school teachers, two of which would be through attrition: one art teacher, one computer teacher and one math coach.
• Eliminate six high school teachers, four of whom would be through attrition: one credit recovery teacher, one math teacher, one science teacher, one physical education teacher, one Work Experience and Career Exploration Program teacher and one business teacher.

The total savings from eliminating 25 positions is $2.16 million.

Denman said the total savings is higher than it normally would be for 25 employees because of the large number of retirees that are leaving the district at the end of the school year.

“There wouldn’t be that much of savings otherwise,” he said.

Kathy Houpt, human resources director, said the RIFs will be done differently this year than in the past.

“People will be cut based on a combination of seniority and performance,” she said. “Anyone with an unsatisfactory or needs improvement (on their evaluation) are the first to go, then it goes by seniority.”

Houpt said she planned to meet with the Danville Education Association on Thursday for “impact bargaining” to go over the RIF procedure and “to make sure the person who is cut is the correct person to be cut.”

Denman acknowledged that with the proposed teacher cuts, “our class size will go up slightly, and we’ll trim some electives.

“We’re not looking at the total elimination of any one program,” he said.

Last year, the district’s average class size ranged between 20.9 and 22.4 students.

“This (proposed cuts) would raise our class size, but if it was raised by more than what the contract allows, we’ll add a teacher’s aide in the classroom,” he said.

The list of recommendations also includes adding four non-certified elementary school teaching assistants, due to class size, at a total cost of $116,926.

Other recommended cost savings totaling $956,310 include:

• Make only necessary repairs for a cost savings of $200,000 in the buildings and grounds department.
• Reduce capital expenditures in food service for a cost savings of $150,000.
• Eliminate the commissary department at East Park Elementary School and cut its four staff members that make bulk food items, such as cookies and spaghetti sauce, for the whole district. Those food items will be made by each individual school for a cost savings of $56,310.
• Decrease capital and purchased technology services by stretching leases over a five-year period for a cost savings of $550,000.

Even if the proposed cuts and cost savings measures are approved by the school board, Denman said, “This doesn’t mean we’ll have a balanced budget next year.

“We’ve been told there will be three to four more years of very challenging times,” he said.

“The problem we have is not with expenditures. The problem we have is with revenue,” he added.

The state of the district’s finances also was recapped at the meeting.

The district started out this fiscal year’s budget on July 1, 2012, with a total fund balance of $20.2 million but projects an ending fund balance of $17.8 million by June 30. That would amount to deficit spending of $2.4 million.

Business Director Heather McKiernan said much of the $17.8 million fund balance “is reserved for certain things” and cannot be used elsewhere.

The district’s biggest concern is the steady decline in state funding. The state currently owes the district $1.7 million.

Forty-nine percent of the district’s revenue comes from general state aid and reimbursement payments, another 35 percent comes from local property tax and the remaining 16 percent comes from the federal government.

The district was supposed to get $29 million from the state this school year, but instead will receive about $26 million because the district is receiving only 89 percent of its total entitlement from the state.

“Just this year we’ve had a loss of $3 million in state aid,” Denman said. “Those are catastrophic numbers.”

District officials are concerned the level of state funding could drop further to 80 percent in subsequent years, which would amount to a loss of $5.8 million each year.

The district has not received 100 percent of what it should receive in general state aid since 2008-2009, amounting to a total loss of $4.7 million in state funding. If the general state aid is funded at the 80 percent level — which would be a loss of another $5.8 million — the cumulative loss to the district over the last five years would be $10.5 million.

Categorical payments from the state, such as transportation and special education, have been prorated as well since 2010-2011, and are paid late.

Local revenue also has been on the decline, with the district’s equalized assessed valuation decreasing every year since 2009, amounting to a compounded loss of $3 million since the 2009-2010 school year. The district is expecting to lose an additional $713,000 to $981,000 in the 2013-2014 school year.

Denman said he doesn’t quite know yet how the federal sequestration is going to impact the district.

“Things are confusing out there,” he said.

A cut of 5.4 percent in federal funding in the 2013-2014 school year would amount to a loss of $311,449 spread over four grants.

Another unknown is whether the state will shift pension responsibility on to the local school districts to fund.

If the pension shift is done in increments, it would cost the district an additional $256,000 for every 1 percent that is shifted away from the state.