HIGHLIGHTS: Fiscal Plan (6:36); Enrollment and Transfer Students (6:42); State Funding – Foundation and Complexity (7:30); Referendum Funding (7:38)
6:34 – There is no voting at work sessions and they announced that there would be no official minutes or recording. The only item on the agenda is the public hearing for the 2023 budget. I’m not sure why they decided not to broadcast this meeting.
6:35 – Communication from the audience on agenda items (those who had signed up before the meeting began).
Angie Janes – WL parent and candidate for school board – Janes commented on the 2023 Capital Projects document. She noted that the document asks the school board to approve spending nearly $10 million on new projects and asked how the school district will pay for these projects. She asked the school board to only start additional construction that we can afford and asked the board to provide sufficient oversight: “we cannot afford another round of projects costing taxpayers double what is budgeted.”
6:36 – Mike Reutter, financial consultant, presented information from the new fiscal plan. Each school board member had a hardcopy of the document and they shared the information on the overhead during the work session. I really appreciated that the information was projected for everyone to see while Reutter was presenting. After the meeting, I emailed Greiner to ask for a copy of the fiscal plan and was told that I would need to submit an official public records request. So, I submitted the request. He replied not long after and said that they would post the fiscal plan to the school’s website. Maybe my request helped him change his mind?
6:37 – Reutter explained that the budget forms the school posts to the Indiana Gateway are often difficult to interpret and so his presentation is based on the documents in the fiscal plan. He noted that there are a few changes to the plan since the July work session. He then noted that new state legislation will require school corporations to show how referendum dollars are spent and said that rather than transfer money from the referendum fund to other funds, the school corporation will need to spend directly from the referendum fund. The new legislation is intended to allow the public to better see how referendum funds are spent.
6:42 – The number of students, called the average daily membership (ADM), is listed on the last page of the fiscal plan. Reutter clarified that the ADM includes WL students who live in the district as well as WL students who are the child of an employee and have transferred into the district. He noted that it would also include open enrollment “cash transfer” students, but our schools do not participate in open enrollment and so do not have any cash transfer students. Foreign exchange students are also included in the ADM and he reported that our school district currently has 1 foreign exchange student. The state education funding is a function of the ADM count which is 2,254 students for the 2022-2023 year. Students who transfer in through the special agreement with TSC are not included in the ADM count. Reutter reported that our school district has an additional 119 transfer students from TSC and said that this number does not include any children of employees. So, in total our school district has 2,254 + 119 = 2,373 students. Last year we had 65 transfer students through the TSC special agreement (later in the meeting Reutter said we had 79 TSC transfer students last year, so I’m not sure which is correct).
The last page of the fiscal plan also shows some future enrollment projections, but Reutter suggested that we not read too much into them now. The school district hired a demographer who will soon provide a better forecast of future enrollment. Reutter noted that demographic projections will help the school board decide how many transfer students to allow. He recommended evaluating the school district’s transfer student practices after getting the report from the demographer. Reutter said that the school district hired an architect to look at building capacity and noted that WLES has a capacity of 880 students, though it is less if class size is lower or if not all classrooms are used for regular classes. He explained that it is more efficient to run schools at close to full capacity and suggested that building capacity should be considered in the school board’s decision on transfer students. Not having a clear transfer student policy has resulted in what some families perceive as discrimination in transfer student decisions. I wrote about this in my post on our school district’s need for a Transfer Student Policy. The school board should seek community input before finalizing a new transfer student policy.
Marley asked about how money follows transfer students and asked if there is a form that is used to calculate the amount. Reutter said that there is a transfer tuition form that is used to determine transfer tuition. Reutter noted that the transfer student agreement with TSC has been in place for 20 years. Witt asked if there is an exit strategy if we are not able to have as many transfer students in the school district. Reutter said that he doesn’t know how our school district does it, but said that it should be explained in the transfer application before a student is accepted. Karpick said that transfer students only have a year-to-year agreement and are not guaranteed for the next year. Witt said that she wanted to verify that they are not grandfathered in if accepted. Reutter said that there is a state grandfather clause, but that it only applied to 11th grade students who have transferred in and guarantees them admission for their senior year.
Greiner explained that students interested in transferring first meet with the TSC superintendent to get permission. If permission is granted, they can submit an application to Roberta Julian in the central office. She gives it a timestamp and sends it to the principal to determine capacity. Witt asked why a transfer student would not be allowed to continue in our schools. Greiner said that truancy or serious behavioral issues are among the reasons a transfer student would be dismissed.
Reutter pointed out that our school district has an interesting enrollment pattern regarding kindergarten. He pointed to the 154 kindergarten students in the 2021-2022 year and then noted that we have 178 students in first grade for the 2022-2023 year. He pointed out other places where there were large bumps including between 5th and 6th grades and noted that this is why it is important to look at capacity and have a transfer student policy. I really appreciated this presentation on transfer students.
7:02 – Reutter reviewed the information on property values (assessed valuation) on page 13 of the fiscal plan. Home prices have gone up significantly and this will cause an increase in property taxes which will help the debt fund. Karpick said that the 5.23% drop in assessed value from 2017 to 2018 was because of a clerical error, but that it was not a WLCSC error. Yin asked if places like the Wellness Center or Senior Citizen Centers pay commercial property taxes? Reutter said that any commercial property pays taxes. Marley clarified that places like the Wellness Center and Westminster are tax exempt and said that “these places are taking taxable inventory out of our school district.” Yin asked if approving so many transfer students from TSC reduces incentives to families to live inside our school district. Reutter said that this is something that should be considered when looking at a transfer student policy. Springer asserted that we charge transfer students our referendum rate. Reutter said that there is a state-prescribed formula that determines what it costs to educate an additional student in our district and that this is what transfer students are charged. Witt directly addressed Yin and said that nonprofits play an important role and that it is not the school board’s job to decide which nonprofits are allowed to locate in our school district, nor could the school board impose a mandate that only those with children could move into our school district. Yin responded that this was not what she was saying. She said she simply wonders why the wellness center could not have been built across the street, still inside the city, but outside of the school district to allow for additional homes in the district. Witt said that this is the city’s choice, not the school board’s. Yin suggested speaking with city leaders and attending city council meetings to advocate for the schools. Witt responded that this is why there is a school board member who serves on the redevelopment commission. Springer said that the reason for the Wellness Center location is because the city already owned the land. Yin said that Purdue is growing and that many people want to live in our school district, but cannot. She would like to see if there is a way to address this. Witt said that it would require a boundary change which is a difficult proposition. Karpick said that they proposed a boundary change in 2007, but TSC had no incentive to give up any of their land. It was nice to hear the school board interact, ask questions, and share their different viewpoints.
7:30 – Reutter explained that the state education funding is determined by the funding formula on pages 18 and 19 of the fiscal plan. There are two parts. The foundation amount is the same for all students in the state, regardless of the school district. For 2022-2023 the foundation amount is $6,235 which is up 4% over last year. The second part is the complexity amount which is different for each school district and depends on factors that are highly correlated with the percentage of students receiving free or reduced price school lunch. Our school district has a very low complexity amount of only $300 for 2022-2023. The complexity amount did not increase from last year. The state provides our district with about $800 less per student in education funding than the state average. This is why the referendum funding is so important to our school district. The referendum will provide $7.3 million in revenue to the school district this year which is about $3,000 per student.
7:38 – Reutter again spoke about the state requiring the school corporation to change the way it uses the referendum fund. In the past, the school corporation has transferred money rather than spending out of the referendum fund directly. Page 10 of the fiscal plan shows the referendum fund revenue, spending, transfers, and balances for each year:
Referendum Fund Revenue and Expenditure (in millions of dollars)
|Spending + Transfers||5.3||6.0||5.0||6.1||7.0||8.2||8.5|
|Transfers to Education||–||–||2.2||3.0||3.5||–||–|
|Transfers to Operations||1.5||1.4||2.8||3.0||3.5||–||–|
|Surplus or Deficit||-0.3||-0.6||0.6||0.3||-0.2||-0.9||-1.0|
|Percent on Education||53||53||44||50||50||64||63|
|Percent on Operations||47||47||56||50||50||36||37|
The referendum fund has a strong cash balance and the education fund does not, so Reutter suggests spending down the cash balance in the referendum fund while increasing the cash balance in the education fund. Reutter said that the correct cash balance in each fund is a policy decision and should reflect what the community is comfortable with. A few days after this meeting, Greiner sent an email to all parents with a brief summary of the work session that included this statement: “The budget review highlighted that 63% of referendum dollars support the classroom with the remaining dollars supporting facilities operations and transportation expenses to keep our schools and buses running efficiently for students.” Greiner’s statement is misleading because the budget shows that over the past 5 years, only half of the referendum money has been used on education. The increase in education spending in the referendum fund doesn’t mean that our schools will be spending more on education. Reutter explained that the reason for directing more referendum money to education in the future is in order to build up a cash balance in the education fund by not spending all of the state education allocation. So, this increase in education spending in the referendum fund is substantially offset by a decrease in education spending in the education fund. I think it is wonderful that Greiner is directly communicating with us and sharing information, but it would have been more accurate to say that about 50% of referendum dollars have gone to teachers, principals, classroom materials and technology.
7:44 – The education fund is used to pay teachers and principals and to provide for technology and classroom supplies. All of the transfer student tuition received from the special agreement with TSC goes to the education fund. Reutter said that school leaders can share with the community that 100% of state education funding goes to the education fund and none of it is transferred to operations. There are other school districts around the state that transfer money from the education fund to the operations fund and it is commendable that our school district is not. Our school district receives about $800 less per student from the state in education funding than the average school district in Indiana. There are school districts that receive $2,000 more per student in state funding than we do. Those are the districts that transfer some of their state education funding to operations. This doesn’t really seem like an achievement for our district, it just reflects the fact that the state sends us far less in education funding per student. This is why it is so important that we have the referendum funding!
7:46 – Reutter said that the document Capital Projects is a new procedure for our school district. The state requires that school corporations list any project they are considering completing in the next three years and that this is shared at the public hearing. He said the only way to fund a project costing more than $10,000 that is not on the list is for the school board to declare an emergency. He said that the upcoming feasibility study will help our school leaders decide what construction projects are needed. I love that we get to see the list of projects that the school board is considering. It includes resurfacing the track, adding a fence around the WLES playground, improving the tennis courts, a new gym floor at the Jr/Sr HS, and many others. Seeing the list allows the community the opportunity to give feedback on which projects are higher or lower priority and also point out projects that are missing from the list. How has our school district never filled out this form before? Did they really declare an emergency for every project just to avoid having to publicly share this list? One thing that is missing from this list is a plan for what to do with the Happy Hollow building. It is just sitting there mostly unused. The only project over the next three years related to the Happy Hollow building is $240,000 for new air conditioning, which seems like a waste of money. Why does an empty building need great air conditioning?
7:48 – The debt service fund is on page 2 of the fiscal plan and the good news is that the increase in property values in our district is projected to increase debt service fund revenue from $4.95 million in 2022 to $5.45 million in 2023. This will help our school corporation make the scheduled debt payments. The school corporation is using $800,000 of the recently borrowed money to make debt payments in 2022, but should only need $350,000 from the borrowed money to make debt payments in 2023. Reutter said that the projected debt service budgets for 2024 and 2025 show no loss from property tax circuit breakers, but expressed his opinion that the state legislature will likely extend the circuit breakers.
7:54 – The operations fund pays for administration, building maintenance, and transportation. Page 7 of the fiscal plan shows that the operations fund will no longer receive transfers from the referendum fund. For future years, all of the transportation costs and some of the operation and maintenance of plant costs will be paid directly out of the referendum fund.
7:59 – The school board will be asked to approve a resolution to reduce this year’s rainy day fund budget to allow them to appropriate those funds to next year. The only anticipated spending out of the rainy day fund, as shown on page 8 of the fiscal plan is for post-employment retirement benefits. After the last work session July 13, 2022 (7:33) when Reutter mentioned these post employment retirement benefits, I submitted a public records request to find out what they are. I received:
- Summary of Rainy Day Expenditures 2022
- Retirement Severance for 1 clerical and 2 custodial staff
- Retirement Severance for previous superintendent, Rocky Killion
- Employment Agreement January 2018 for former superintendent, Rocky Killion
I was told that the memo explaining these rainy day expenditures that was referenced in the July meeting could not be located. These documents show $115,928 in severance payments to Killion across 2022 and 2023 and that the policies governing these payments were approved by the school board in 2015 and 2018.
8:06 – Reutter said that the property tax rates are not expected to change very much between 2022 and 2023. The details are on page 12 of the fiscal plan.
8:09 – In October, the school board will vote to authorize the proposed 2023 budget. There will also be a capital projects resolution, a bus replacement resolution, and a budget reduction resolution. Reutter said that there will also be a resolution authorizing transferring up to 15% from one fund to another (he wasn’t clear if this is from the education fund to the operations fund or if it is from any fund to any other fund). Reutter emphasized that there is no plan to make the transfer and said that the board could choose to wait and see if this is needed before authorizing it. I hope the school board votes against authorizing unspecified transfers. If it isn’t something that is needed now for the budget, it is better to wait and see. The school board should not relinquish their authority over the school budget. We need the school board to provide financial oversight in order to avoid the type of poor decisions that have saddled our school district with so much debt.
8:11 – Greiner said that the feasibility study will be completed in October and the demographic study will be completed near the end of the year. Marley asked Reutter to separate the four construction bonds and list the payments separately for each one. Reutter said that he would be happy to do this and that the payment schedule for each bond is in the complete fiscal plan, though not in the pages that he provided to the school board. Information about the four bonds is available from the Municipal Securities Rulemaking Board (emma.msrb.org):
These documents list the scheduled payments that I have put together in a table for reference. It is interesting to note how much the payments increase overtime.
8:17 – Meeting is adjourned. The information shared at this meeting was similar to the information shared at the July 13, 2022 work session.
Location: Happy Hollow Building, LGI Room
Streaming: None provided
Attendance: 7 of 7 School Board Members (Yue Yin, Bradley Marley, Thomas Schott, Alan Karpick, Karen Springer, Rachel Witt, Amy Austin); Shawn Greiner, Superintendent; Anna Roth, Assistant Superintendent; Michael Reuter, financial consultant
Future Meetings (calendar link)
Regular School Board Meeting/2023 Budget Adoption – Monday, October 10th at 6:30pm at Happy Hollow LGI Room
These are not official minutes from the school board meetings. I am a parent of WLCSC students and my thoughts are given in italics. Previous agendas, minutes, and audio recordings can be found at the WLCSC website.