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COAL TOWNSHIP - Directors of the Shamokin Area School Board were asked by a fellow member Wednesday night to generate five ideas each toward eliminating a $4.6 million deficit.

Brian Persing acknowledged the challenge presented to the nine-member board in balancing the 2012-13 budget, saying that tough decisions loom as directors prepare a final spending plan due June 29.

Persing put it bluntly when he said, "This is a bad time to be on the school board."

He asked that directors bring the ideas to next month's meeting.

While it's likely the district can't implement 45 ideas, the intent is to generate cost savings that can ease the deficit while lessening the potential for staffing cuts.

"The harsh reality of it is," Persing said Thursday when asked to expand on his suggestion, "people are going to be furloughed."

He continued, "I want five ideas (each) that's not going to cost anyone their jobs but that will cut money somewhere."

Those ideas, he said, should be shared with the public.

"We're in the education business. I don't want to lose teachers."

Own ideas

A preliminary budget adopted Wednesday includes $2.6 million in staffing cuts, largely in educational programs. However, the cuts were unspecific and intentionally so.

While the state requires a preliminary budget be balanced, and Shamokin Area's is, it's not until the final document is due that exact spending measures must be presented. This gives directors time to solve the deficit problem, which could mean a thorough review of every line item.

On Thursday, Persing offered a few ideas of his own to ease Shamokin Area's financial burden: solicit donations from alumni, entice employees to switch to their spouses' health insurance and offer early retirement incentives.

Persing spearheaded the idea of mailing 11,600 letters to alumni across the country. The letters would solicit donations, directing them to the district website, which will soon feature a link to make a donation through online debit or credit transactions.

The donations, unless targeted to a specific purpose, would go to the district's general fund, he said.

M&T Bank would handle the merchant services credit card program, approved by the board Wednesday, at a fee of 2.35 percent.

The cost of postage and materials is $5,500, he said, acknowledging the mailings are a gamble and come at a time when the reins are being tightened. However, if a positive return is had, he said they would prove worthwhile.

Insurance

Persing estimated the district employs approximately 300 people who are insured at an estimated $12,200 each, paid by Shamokin Area.

Thirteen employees had previously switched to their spouses' health insurance, for which they were paid a $1,000 stipend, he said.

"I have a plan in place to offer a $3,000 stipend," he said, raising the incentive and hoping to have an additional 25 to 30 employees make the switch.

A payout for 30 switches would total $90,000 compared to the annual cost of $366,000 to provide health insurance to 30 people, using Persing's estimates, for a savings of $276,000.

In a related matter, health care costs for retirees enrolled in the district's benefit programs with Capital BlueCross have skyrocketed, up 35 percent in 2012-13 compared to the current school year.

The current average total monthly expense for retirees is $57,217 for traditional and PPo care, prescription and vision. That will rise to $77,388 under a renewed contract.

Retirement

The idea of offering an early retirement plan to district employees was formulated by Persing with fellow director Ronald McElwee prior to the latter's election to the board, Persing said during Wednesday's meeting.

On Thursday, Persing said if 12 teachers choose the early retirement option - details of which he did not want to share because it's being considered by union leadership - eight other jobs could be saved through attrition.

Start over

McElwee presented his own idea Wednesday for solving the district's budget woes: hit the reset button.

He suggested the board "eliminate everything," rebuilding the essential core educational programs from start to finish, deciding what's needed in the district and what is not - formulating a budget from scratch.

McElwee said the district's administration is trained to build a school district. He said the board should consider doing so, beginning with budgeting for core programs and staff from kindergarten through 12th grade and moving on to include non-essential programs and extracurricular activities to round out the budget.

McElwee and Director Charlie Shuey said they would not support staffing cuts from the bottom up.

Reiterating that the board "hasn't scratched the surface on cuts," Shuey said he "won't make cuts on the backs of the lowest paid employees." He'd look to do the cuts top-down, he said.

Speaking of employees who make $18,000 or less, McElwee said, "They're the people who can't afford to be unemployed."

Speak up

Whatever decisions are made, Persing said Thursday he'd like to hear from district employees.

Some staff members may fear retribution for making cost-savings suggestions, but that shouldn't be the case, he said. Some may have the exact ideas needed.

"I just don't want to listen to administrators all the time, I want to listen to anyone, the employees, the workers," Persing said.

He said he'd look to set up a method - perhaps a box for anonymous suggestions - to ease any burden an employee might feel in speaking out.

On Wednesday, the board voted to approve a policy change intended to foster such speech. Shuey said during the meeting that the staff communications policy was adjusted, allowing for any employee to speak directly to a board member about any topic without fear of reprisal.

Director Ed Griffiths took exception, saying, "I'd like to go on the record to say that was never the case." He said employees always had the opportunity to speak frankly with directors of past boards.

Some in the audience, many of whom are employed by Shamokin Area, grumbled audibly at that assertion.