The Hamilton County Schools may close five elementary schools and consolidate seven others into three new schools as part of $20 million in needed budget reductions, Finance Director Tommy Kranz said.

Mr. Kranz declined to name specific schools and said that scenario is "just one possibility."

He and Supt. Jim Scales said major steps need to be taken this year to create a "new school model" that will help eliminate annual painful budget reductions.

Dr. Scales said of the projected school closings, "This is going to get tough. It's very emotional when you close community schools."

He also said, "This will get political." He noted that several school board members are facing re-election and the entire county mayor and County Commission must run next year.

Mr. Kranz said the specific recommendations will be outlined Feb. 17 to members of the School Board and an advisory financial committee.

He told the finance committee and advisory panel on Tuesday night that out of 46 county elementary schools, 21 have fewer than 400 students. He said 18 of those have a negative growth rate for the past 12 years and eight have a negative growth rate for the past five years. He said 11 lost students over the past year.

Mr. Kranz said school closures are not going to bring major savings. He said closing five elementary schools would save $2.5 million.

He said plans are to cut $2 million from the central office, but he said efforts are being made not to have wholesale personnel cuts.

One possibility is not giving step pay increases - for a savings of $2.5 million. Another is to reduce salaries by five percent of employees at a certain pay level and above. But he said both actions would require approval of the Hamilton County Education Association.

Advisory members asked about the generous accrued leave policy, which Mr. Kranz said is "kind of unheard of."

Others questioned the fact that administrators make up a sizable percentage of HCEA. Board Chairman Kenny Smith said HCEA "is not a union. It's an association."

Of the accrued leave, that allows some administrators to leave the system with checks of as much as $100,000, Dr. Scales said, "It's what it is and we have to move on."

Mr. Kranz said it was difficult to get some concessions in accrued leave from HCEA last year.

Board member Rhonda Thurman said with administrators being a part of HCEA that items such as accrued leave "are not on the table, they are under the table."

Mr. Kranz said officials are scrambling to deal with spiraling health insurance costs. He said, "It is getting scary what the numbers are jumping up to."

He said the county schools are exploring joining with county government on a joint insurance approach or joining the state health plan.

The schools are also discussing a deal with Erlanger Medical Center in which there would be a discount on hospital visits.

One option is to require employees to pay a larger share. Mr. Kranz said employees currently have "a very rich" setup on insurance.

Dr. Scales said principals are examining any savings they can find in their schools, including possible program cuts.

He said there may be groupings of students from different grades together, such as first and second graders in the same class, to avert situations where the addition of a student causes the schools to have to hire another teacher.

Dr. Scales said the contract with the Durham firm for school transportation "does not cost more for magnets because there are no special routes, just pickup points. Most of our zoned schools have students taking advantage of the district's magnet program which provides choice."

He said there are 4,914 students attending magnet schools and 1,297 are transported on county school buses.

Mrs. Thurman said a closer look is needed at the cost of transporting magnet school students.