Normandy Finances
8:21 pm
Tue April 15, 2014

Normandy Faces Big Deficits — If It Survives

Depending on how tuition calculations for transfer students are figured for the coming school year, the Normandy School District — if it still exists — could end the upcoming school year with a deficit of as much as $11.7 million, district officials said Tuesday.

Addressing the latest meeting of a task force formed to determine options for Normandy’s future, Mick Willis, the district’s assistant superintendent of operations, presented four scenarios for the 2014-15 school year.

If nothing changes and Normandy is still paying tuition and some transportation costs for about 1,000 transfer students at the full rate charged by receiving districts, Normandy would need at least $11.7 million to break even at the end of June 2015.

Lawmakers in Jefferson City are considering various changes to the transfer law and to the tuition calculations, so Willis also presented the outcomes for the district under some of those schemes:

  • If tuition rates are cut to 50 percent instead of the current 100 percent, the district’s shortfall would drop to $3.7 million.
  • If tuition rates are cut to 70 percent, the deficit is estimated at $6.3 million.
  • If rates are cut to 70 percent and receiving districts have to pay Normandy retroactive refunds of the overpayment for the current year, the district would start the next school year with a balance of $3 million and would end it with a deficit of $3.3 million.

Questioned about the financial forecasts, Superintendent Ty McNichols reminded the task force that Normandy already has cut more than 100 jobs and closed an elementary school to slash its budget for the current school year. He said some cuts were already being contemplated before the transfers drained the district’s budget.

McNichols
McNichols
Credit Normandy website

He noted that the $3 million the district could get if it receives retroactive refunds of tuition payments would be crucial to helping the district’s financial picture.

Asked about other budget reductions, McNichols said: “There are things we will do, but it’s not going to be $3 million worth.”

The task force was named in February, after the state board of education put the Department of Elementary and Secondary Education in charge of Normandy’s finances. That move was made when it became clear that the only way the district would receive emergency supplemental dollars to avoid bankruptcy in the current school year would be if someone besides the current local board was handling its money.

Last week, lawmakers approved a $2 million emergency infusion of money expected to get Normandy to the end of June, along with using its financial reserve and shifting some capital money. But that would mean the district would end the current school year with a zero balance.

Willis noted that the beginning of the next school year would be tight because the district would start the year with only local tax receipts, not money from the state, which normally doesn’t come until two months into the school year.

“We would have to meet two payrolls before state money would come,” Willis said. “If we start with zero dollars, there would be no way to meet that payroll.”

McNichols said there have been some behind-the-scenes discussions with receiving school districts about their accepting less than their full tuition charge for some transfer students. But, he said, residents of those districts might not be happy with such a plan, so educators were hoping that lawmakers would make that decision for them.

McNichols said that the financial uncertainty and the continuing legislative debate over what changes, if any, will be made to the transfer program has created tension among members of the Normandy staff concerning their jobs for the 14-15 school year.

“They’ve got to make decisions about their lives,” he said, adding: “There are people who are scared.”

Asked by task force member Maxine Clark whether foundations or other private sources of money could help Normandy dig out of its financial hole, McNichols noted that unlike richer districts such as Clayton, Normandy doesn’t have such resources to draw on.

“We do not have that community support,” he said. “It’s not because our parents don’t care. It’s because they have other socioeconomic issues.”

Task force member Gary Cunningham asked how much longer a district like Normandy can or should exist, given its history of poor academic performance.

“When does it end?” he said. “When do we say this is the model, and if it doesn’t work, the school goes away?”

McNichols said the problems are so deeply rooted that it takes time to turn things around.

“We’ve changed people,” he said, “but we haven’t changed the structures at all. People believe that with black and poor kids, we just have to come up with a recipe ... If you want to change how kids learn you have got to change how you teach them.”

More scenarios, more options

Carole Basile, the dean of the school of education at the University of Missouri-St. Louis, presented the panel with a number of scenarios and options that it should consider in coming up with its recommendations, which are due in mid-May.

Among the variables, assuming that Normandy as it currently stands has lapsed as a district, are:

  • What happens if there is no change in the tuition calculation and transfers continue?
  • What happens if there is no change in the tuition calculation and transfers are discontinued?
  • What happens if transfers continue and the tuition calculation is reduced?
  • What happens if the tuition calculation is reduced but no transfers are allowed?

Basile also noted three possible outcomes under current state education regulations if Normandy goes out of business:

  • DESE takes over the district and appoints staff to oversee the transition to a revised operation.
  • All or part of Normandy becomes one or more new districts.
  • Students in Normandy are assigned to attend one or more accredited districts in the area.

Asked in an interview after the meeting how her thinking has been clarified as the task force has met in recent weeks, Basile said:

“It’s really become a more unclarified situation. I think there are more unanswered questions. I think that there are more issues than we could ever have expected. And I think it’s been very hard to figure out and really traverse through all of the different kinds of scenarios that could possibly be, given all of the ambiguity around all of this.”

She noted that financially, the district appears to be in trouble depending on how many students transfer and how much money flows out of the district. “All we’re seeing is red right now,” Basile said, “so it really is very difficult to do this work.”

Given all of the shifting factors, the task force will have to try to clear up a lot of questions to come up with good recommendations, Basile said.

“The main driving forces with this whole issue are the tuition dollars and the transfers,” she said. “And so as we look at both ends of that continuum, we are going to try and put together scenarios that helps us to get to some logical conclusions about what’s really fiscally and really morally viable.”