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District tackles revenue decline; team's ideas worth $1 million

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Replacing lightbulbs with ones that use less energy, leasing land for cell towers and selling advertising space could help Franklin schools save or make enough money to keep paying employees and make its debt payments.

The school district has spent the past year looking for ways to save or generate $1 million from a fund that pays for employees’ salaries and insurance benefits. The school district has had less money to pay those expenses over the past six years because fewer students are attending Franklin schools, and because property tax caps are limiting the amount of money the school district collects to pay its bills.

Last year, Cummins executive Andy Lamm started helping the school district find ways to save money or bring in new revenue, and recently Lamm and a group of teachers, administrators and residents created a list of 12 ideas.

The list ranges from small changes, such as ensuring that school officials are seeking competitive bids for food, custodial and other services, to selling advertising space. In total, they could add up to between $515,000 and nearly $1.2 million in money that could be saved or new revenue that could be earned.

School board members could approve eight of the ideas this year, though they might have to adjust some of the school district’s policies first. For example, board members would likely need to specify where on Franklin’s facilities businesses could buy advertising space, executive director of finance Jeff Mercer said.

School officials also need to study four of the suggestions, including creating a preschool, providing before- and after-school care, providing a day care and offering additional courses to students outside of the school day, so they can be sure none of those added programs would cost more money than they would bring in, Mercer said.

Franklin needs to save or generate about $1 million because it’s collecting less money from the state and from local property taxes.

Indiana schools receive state dollars that pay for employees’ salaries and benefits based on the number of students they have enrolled. The number of students at Franklin has been falling since 2008, when flooding that displaced hundreds of students from the city was followed by the crash of the housing market.

Franklin is also paying more than $178 million for building projects including the new high school and renovations at Franklin Community Middle School and Custer Baker Intermediate School, and property tax caps are limiting the amount the school district can collect to pay its debt. Mercer was expecting the school district to lose almost $3.4 million to property tax caps this year, but recently school officials were told they’ll lose about $2.4 million for the year, nearly $1 million less than expected.

To keep costs down, Franklin cut 18 teaching positions last year. Around the same time Lamm, director of information asset protection for Cummins and a Six Sigma black belt, started working with the school district by conducting a line-by-line review of the budget to see what other costs could be cut, or if there were any new ways Franklin could make money.

“We flipped every rock,” Mercer said.

Lamm and school officials found eight ways the school district can immediately start either cutting costs or raising money. That includes allowing cellphone companies to lease land the schools own for towers. Clark-Pleasant schools recently agreed to a similar partnership with Verizon, which will pay the school district between $19,000 and $30,000 per year.

Another suggestion was to expand the Franklin Academy, which offers online programs to current and former students trying to earn their high school diploma. If more students enroll in the academy, then the school district could receive more funding from the state, Mercer said. But this year, school officials cut the number of students in the program to help ensure students could receive more one-on-one instruction.

If the board approves any of the suggestions, the school district likely won’t start saving or making money until the end of 2015 at the earliest, Mercer said. By then, the savings and extra cash will be needed to help the school district keep up with its annual debt payments, which will rise to about $15.5 million next year, Mercer said.

That’s why, regardless of how much Franklin saves, Mercer doesn’t expect Franklin will be able to add any of the teaching positions that were cut last year for at least 10 years. And while the school district will save nearly $1 million because this year’s property tax shortfall was less than expected, Mercer doesn’t want to spend that money.

Franklin could use that savings to pay for one-time expenses, such as replacing a bus or weight room equipment at the high school. But Mercer would prefer to hold on to the money, since officials can’t know for sure how much they’ll lose next year, he said.

Outside the box

Here are the eight ideas Franklin could consider immediately to either save or raise money for the general fund:

Ensure bids and quotes for food service, custodial and other service are as competitive as possible

Invest in LED lights and other energy efficient measures

Ensure all employees are working safely in order to reduce potential workers compensation claims

Consider replacing and updating some of the assessments used to track how well students understand and are keeping up with lessons throughout the school year

Look into partnerships with hospitals that would consider funding part or all of the school district’s nursing services

Consider selling advertising and naming rights. Specifics on what kinds or advertising could be sold and where would need to come from the school board

Consider leasing land for cellphone towers

Expand the Franklin Academy, since more students would mean more state funding

Here are four additional ideas that need to be studied by a committee before they’re recommended to the school board so that school officials are sure they won’t cost Franklin any money:

Creating a new preschool program run primarily by the school district

Consider adding before and after school care

Consider adding a day care

Consider adding enrichment classes outside of the school day. Students would pay for these classes, but school officials would need to ensure the money students pay would cover the whole cost

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