CALLAWAY, Neb.— A crowd of roughly 100 people filled one side of the Callaway school gym bleachers on Wednesday night as the Callaway School Board held a special meeting to address concerns about the district’s financial situation.
The two hour meeting came amid a number of questions and rumors circulating in Callaway following the board’s previous meeting, including concerns about potential school closure, consolidation, and staffing changes.
Superintendent JD Furrow addressed those concerns directly during a presentation on the district’s finances, saying the school is facing a difficult situation but is not at a point where it needs to close or consolidate. He described some of the scenarios being talked about in the community as ‘doomsday’ scenarios.
“We are in a tough financial situation. We do have some tough decisions to make and plans to make, and we need to dig ourselves out of a hole,” said Furrow.
Furrow emphasized that the purpose of the night’s meeting was to develop a long term plan rather than reacting to immediate crisis.
“This is not a doomsday talk. This is just numbers, this is where we are,” Furrow explained. “This is making a plan. This is how we’re gonna move forward.”
Board member resigns
The meeting began with the resignation of board member Liana Hrupek, who was not in attendance. In a resignation letter that was read Wednesday night, she expressed pride in the district’s staff and students. She said she had become increasingly uncomfortable with what she described as a change in the tone of the board over the last couple years and an environment that had become aggressive and disrespectful toward her personally.
Hrupek said she would continue to volunteer and support the school but that sitting on the board has made it hard to serve her community.
The board accepted her resignation unanimously, with members expressing regret and appreciation for her service.
District’s financial picture
Furrow’s presentation showed a district that has seen its financial reserves decline substantially over the past decade. The general fund began the 2017 year in September with approximately $1.49 million. This year, the district began the month with a projected $492,000.
He said the district’s problem has developed over a period of years as expenses increased while its tax asking remained relatively flat or was reduced. Those expenses have included increases in administrative costs, employee wages and benefits, and other investments intended to improve the district.
Furrow pointed to the district receiving an excellent AQuESTT rating as evidence that those efforts have produced positive results. At the same time, he acknowledged the district did not adequately adjust its financial planning as recurring expenses increased.
The districts property valuation has increased substantially this year, reaching about $595 million, but state restrictions limit how much the district can increase its tax asking without additional steps.
Furrow presented two options to the board and public in attendance.
Option one: Would set the district’s total tax asking at $3,759,022, representing a 2.08% increase. That option would allow the district to avoid the additional joint public hearing.
Option two: Would increase the total tax asking to $3,864,489, a 4.9% increase, using the maximum growth available without requiring a supermajority vote for the additional 7% authority.
Furrow said the higher tax option would put the district in a better position by the end of the coming fiscal year, although neither option would immediately solve the district’s financial challenges.
He also cautioned that the district cannot simply make a decision and see an immediate change in its finances.
“Last year, $804,000 is what we had to start the year. Last year, we went $292,000 in the hole in December. This year we start at $492,000,” Furrow said.
He added that the district’s cash flow is also affected by when property taxes are actually received, making certain months particularly difficult financially.
“It’s not an instantaneous fix. It wasn’t an instantaneous problem to get here. It’s not going to be an instantaneous fix to get out of.”
Changes already being made
Some financial adjustments have already begun.
The district was unable to find a suitable applicant for an English teaching position and rearranged staffing internally, resulting in one fewer teacher. Two paraprofessional positions that became vacant through attrition were not filled. A longtime maintenance position was also eliminated.
Furrow said the school will attempt to handle as much maintenance work internally as possible and contract out work that needs to be hired out. A resident questioned how the school will keep up with routine maintenance and upkeep without a dedicated employee.
The possibility of cuts was among the concerns raised by residents on Wednesday night.
“Are we truly solving the district’s financial problem, or are we balancing the budget by putting more pressure on the people our students depend on most,” said one member of the public.
Other residents questioned administrative expenses, including whether the district needs two principals, while others questioned spending decisions and whether the district has been sufficiently focused on saving money.
Community input
Seven people spoke during the formal public comment period, while several others who had initially signed up chose not to speak after hearing the financial presentation and having their questions addressed. The comments reflected different perspectives on the district’s situation.
Some residents expressed concern about the burden of property taxes, particularly for landowners, and questioned whether the district is spending taxpayer dollars as efficiently as possible.
Others emphasized that maintaining the school is critical to the future of Callaway and expressed concern about what the loss of the school could mean for families, businesses and the community as a whole.
Several residents also thanked the board, administration and teachers for their work and said they wanted to see the school remain strong.
The board then broke into smaller groups in different areas of the school to hear more direct feedback from community members.
After those discussions, board members said they heard a consistent message: the community wants to keep the school open, wants the district to improve its financial position, and wants taxpayer money spent carefully.
Board members also acknowledged there are limits to how much more can be cut without affecting staff, supplies and services for students.
Furrow said the district needs to address the financial hole while also preparing for future changes to state funding, including the possibility that current levels of property tax credits and foundation aid will not continue indefinitely.
“I’m afraid that if we wait to fill the hole, we’re gonna have to do it with our own money. But if we fill it now, we can use some of Lincoln’s money to help us fill the hole and get us back right,” explained Furrow.
Public narrowly favors higher tax option
Toward the end of the meeting, the board conducted a straw poll to gauge public opinion. The result was nearly evenly divided, with 24 people favoring option one, the lower tax asking, while 27 favored option two, the higher tax asking. The low participation total indicates that several didn’t raise their hand at all.
The road ahead
No formal action was taken on Wednesday night. Furrow said he believes the district can increase the amount it puts to its reserves while also addressing other financial priorities and future needs.
The board will formally vote on which tax option to apply to the district’s budget at its next regular meeting on September 14 at 8 PM. Furrow said Wednesday night’s meeting was about beginning that process.
“Tonight isn’t the end of anything, it’s the start of how we decide to dig ourselves out of this hole,” said Furrow.
Both Furrow and Phelps expressed appreciation for the turnout Wednesday night, calling the attendance a sign of the importance of the school to the community.
Phelps also encouraged residents to consider running for the school board, noting that current members were appointed to fill vacancies rather than being elected in contested races. He said having more people run for the board would give the public an opportunity to choose representatives whose views reflect the community.
The meeting adjourned at 10:02 PM.
View pages from the district’s complete financial presentation from Wednesday night’s meeting here: Callaway Public Schools financial presentation
