TAMPA — Superintendent Jeff Eakins spent Tuesday morning making a case to the Hillsborough County School Board that his team has cut enough expenses to put the district on a short path to financial health.
One more round of staffing adjustments should cut $31 million in payroll, according to his presentation. With other planned savings and transfers, the district should come within $3.6 million of having a balanced operating budget. Three years ago, it had a $130 million spending hole.
"We are on track next year to end that deficit," Eakins told the board, lamenting that the public does not appreciate the progress he and his team have made.
He was so upbeat that board chairwoman Sally Harris warned against painting too rosy a picture.
"There are already comments in the community about Aug. 10 (the first day of the school year) and all the air conditioners that are going to stop working," she said.
"I really feel that this is a vital time to let the community know that we have shortfalls. We have to seek alternative methods to receiving funding. We need help in our public schools."
More than an hour passed before anyone mentioned the sales tax referendum that some hope to put on the ballot.
Prospects for a Nov. 6 referendum are shaky at best, as a new state law requires the district first to undergo a state performance audit. That process, including two months to post the results, could take eight months.
A Hillsborough transportation group, meanwhile, is preparing to put its own tax referendum on the ballot and, because that group is not a government entity or school district, it does not have to wait for a state audit.
Eakins and board members argued in the past against a referendum, even as other districts pursued them successfully, because they wanted to establish more credibility when it came to the district’s finances.
On Tuesday, the message was clear: Hillsborough has reached that milestone.
By the end of 2019, district leaders said, they will have eliminated nearly 1,900 jobs, mostly through attrition. Hiring is how based on formulas that consider state class size limits and a district-funded efficiency report.
Eakins said he will have cut 22 percent of all district administrative positions by 2019.
In addition, staffing levels this year will be lower than they have been since 2010, despite growing enrollment.
Without the ongoing cuts, Eakins and chief business officer Gretchen Saunders said, the district would face a $70 million gap between rising costs of $75 million and new, unrestricted state revenues of $5 million.
Of the $75 million, they listed $60.7 million in added employee compensation, coming after a year of tense labor negotiations.
The numbers they released also revealed the effects of rising health care costs and the growth of charter schools.
Employee benefits went up by $7.7 million this past year, more than wiping out the $7.3 million the district saved by cutting jobs.
And payments to charter schools rose by $32 million. This is money that comes from the state and merely flows through the district. But the increase illustrates that sector’s growing popularity.
Strains on the capital budget continue, with about a third of those dollars used for debt service. At least a dozen new schools will be needed in southern Hillsborough. The first, a $77 million high school, will eat up three full years of the impact fee payments from developers.
And there is never enough money to perform the recommended maintenance on roofs and air conditioners. "We start out in a deficit every year," said deputy superintendent Chris Farkas.
Despite these challenges, Saunders and Eakins are determined to build up the district’s main reserve account, which had dropped so severely that bond rating firms in New York raised alarms in 2015.
From a low of about $140 million, the reserve is now at $147 million and is projected to hit $157 million in 2020.
The district is aiming for $161 million, enough to cover a month of payroll and accounts payable in case of an emergency.
A tentative 2018-19 budget is expected on July 17.
Contact Marlene Sokol at (813) 226-3356 or [email protected] Follow @marlenesokol.