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North Little Rock schools likely to tap savings

Construction account would counter desegregation aid’s loss

The North Little Rock School District will likely draw from a $15 million construction-savings fund to meet its operating costs after state desegregation aid to the district -- $7.6 million a year -- comes to an end, Superintendent Kelly Rodgers said Thursday.

Rodgers said the draw from the construction savings will not be necessary until the 2018-19 school year but will likely occur annually after that in varying amounts until 2020-2021. The total draw could be about $10 million over that time.

"That's just a projection and that's a long way out, but it won't deplete all of the construction fund," Rodgers said. "And a lot could happen in that amount of time. There could be an increase in the number of students in the district, plus there could be the opportunity to refinance or extend $200 million in bonds," both of which could generate new revenue for the 9,000-student district that has an annual budget of about $100 million.

Earlier Thursday, the North Little Rock School Board decided against possible budget cuts that would have eliminated employee pay for holidays and unused sick leave. It also decided against outsourcing or hiring private companies to provide school bus transportation, custodial work or other school- and student-support jobs. The board removed those items -- along with the International Baccalaureate program at the district's high school -- from the budget-chopping block at Rodgers' recommendation.

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Outsourcing support-service jobs had the potential to save the district the greatest amount -- about $1.5 million. Cutting North Little Rock High School's small International Baccalaureate program, on the other hand, would have saved about $37,282, according to district information. Eliminating holiday pay for employees would have saved about $71,000 a year.

Rodgers and board members have been weighing those possible cuts for months. Had they been approved, they would have been paired with earlier budget-saving plans to offset the loss of the special state desegregation aid that is to end after the 2017-18 school year. The desegregation aid is ending as the result of a 2014 settlement agreement in a long-running federal school desegregation lawsuit.

Already approved plans for cutting expenses include scrapping an early-retirement incentive program that will save the district about $1 million a year in salaries and benefits starting next school year. There also have been reductions in administrative costs of about $500,000, the payoff of energy bonds, cuts in the cost of school building utilities and a seven-day reduction to 252 workdays for the system's year-round employees.

In all, the district has identified close to $4 million of the needed $7.6 million, resulting in the need for money from the construction savings fund, Rodgers said, adding that district leaders are continuing to look for new sources of cost savings.

The board did approve Thursday a reduction in the longevity pay distributed to longtime teachers and support-staff members when they retire or resign from the district. Teachers previously were eligible for the longevity pay after 10 years of district work. The pay rate was based on the average daily rate of pay for teachers multiplied by the years of an individual teacher's employment. The new payment will be $150 a year per year of employment for those who have worked in the district for at least 15 years. That will save the district about $173,000 a year, Rodgers said.

The district has just about completed what started as a $265 million capital improvement program that resulted in rebuilding or extensively remodeling nearly every campus. Left undone has been the extensive renovation of North Little Rock Middle School, which is made up of the former Lakewood Middle and North Little Rock High School-East Campus. The middle school renovation failed to receive state funding, causing district leaders to establish the construction-savings account for eventual use on the middle school project.

Unlike drawing from operating fund reserves to offset operating expenses, drawing down the construction-savings fund will not put the district in jeopardy of being labeled by the state as fiscally distressed. School districts in fiscal distress are in jeopardy of being taken over by the state.

Metro on 04/21/2017

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