PEMBERVILLE – Eastwood Local Schools is spending money to save money.
In June, the board of education and teachers’ union agreed to a memo of understanding that provided an incentive for teachers to retire. If they retired before June 30, they would receive a $15,000 payment this fall and an identical payment in August 2021.
Three teachers took the offer, according to Treasurer Brad McCracken.
One will be replaced, one will be rehired at a lower salary, and the final position will not be filled.
While costing $45,000 next year, the departures will save the district $150,000. Savings over the next five years totals $583,000.
“It just was necessary to create the incentive so people would actually retire,” McCracken said.
A teacher had to have been employed at Eastwood for 10 consecutive years to take the offer.
McCracken said others were interested of taking the incentive under a retire/rehire deal, but would have returned at the bottom of the seniority list. There was concern over job security next year due to the coronavirus.
The incentive was another way the district is attempting to save money in response to state funding cuts and future expected losses in revenue.
Eastwood lost around 5.2% in state funding this past year due to cuts made in May by Ohio Gov. Mike DeWine.
“We don’t know what’s going to happen next year,” McCracken said, but he budgeted another 10% reduction, or about $560,000.
There are also expected losses in income tax collection due to the high rates of unemployment and property tax collection because of the planned revaluation of farmland this year that will result in lower tax bills for farmers.
He estimated the district may lose $100,000 in property taxes and $350,000 in income taxes.
In May, teachers ratified a memorandum of understanding that will freeze salaries in place for 2020-21. They also agreed to supplemental contracts that will be funded at 80% of what they would have been paid for next year. These reductions are expected to save Eastwood $450,000 next year.
School board members also will forego their compensation for fiscal year 2021, which will save between $11,000 and $12.000.
The goal is to lower expenses by between $650,000-$750,000 for next school year.
McCracken was optimistic about meeting that goal.
“I think we will,” he said. “The wildcards are do we see the levels of cuts from the state and do we see the income tax losses. We won’t know for some time.”
(The projected losses in this story have been corrected.
McCracken estimated the district may lose $100,000 in property taxes and $350,000 in income taxes.)