State to Sto-Rox: Recovery starts with investment

-FINANCES-


By Jamie Wiggan


A 109-page plan for repairing the Sto-Rox School District’s tenuous finances recommends more investment in teaching staff along with targeted measures to reclaim students from cyber and charter systems.


“This is not a typical recovery plan,” said John Zahorchak, chief recovery officer with the state department of education, while presenting to the board March 10. “This is more like an investment plan.”


Sto-Rox has been enrolled in the education department’s recovery program since July 2021, following successive years of fund balance deficits. School directors have 30 days from March 10 to approve the proposal and will then be committed to it for the next five years or more.


Should the district continue to operate without adopting the changes, a projection model accompanying the plan predicts the district would wrack up a deficit of more than $28 million by 2027.


“We cannot sustain the basic model that we have,” Zahorchak said. “My goal is to get you out of recovery.”


Rather than focusing entirely on cutting costs, Zahorchak said the plan is about improving the district’s overall performance in a bid to boost enrollment and keep tuition costs in-house. An “exodus” of students into cyber and charter systems during the past several years is a large factor in the budgetary woes according to Zahorchak.

“We have to develop a plan that incentivizes having students inside this school,” he said.


According to the plan, that means addressing student safety concerns by hiring public safety officers, investing in teachers to keep education competitive and improving the district’s reputation through marketing and branding campaigns.


While much of this entails increased spending upfront, the plan assumes funds will later be

recouped when charter students – which the district remains financially responsible for – return to Sto-Rox.


Millions of dollars of federal funds distributed during the pandemic will continue to roll in during the next few years, offsetting many of these costs and chipping away at the fund balance. Zahorchak also said the plan will be raising taxes for multiple years to tap into further revenue streams.

The district’s income share from local taxes - around 20% - is well below the state average of 50%.


In terms of cost-cutting, the plan anticipates the largest gains from restructuring its transportation services and also points to saving opportunities in out-sourcing business office services, reducing workers compensation and updating charter tuition rates.


School directors did not discuss the plan at length during the public meeting but indicated plans to hold a special meeting for approving it April 7.


In a later interview, President Cameron Culliver said he was initially hopeful about what he saw but couldn’t firmly say whether he supports it until he’s more familiar with the details.


“I think all in all it is time for a change,” he said “[the plan] looks like it’s a step in the right direction.”


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