Despite declining student enrollment, the Brown County Schools’ budget is fiscally stable because the district continues to make cuts each year.
This is the message the district’s financial consultant Bob Harris delivered to the Brown County School Board of Trustees on Oct. 3. The board is expected to adopt the budget at their next meeting Thursday, Oct. 17 at Brown County High School.
This year the district cut almost $750,000 from the budget, Harris reported.
“Nobody lost their jobs, so I think that’s incredible,” he added.
The district’s proposed budget for 2020 is $26,355,118. This budget is higher than the 2019 budget, which was advertised at $25,317,185.
One reason for that increase is that Harris budgeted $160,000 out of the district’s rainy day fund, which has around $167,000 in it currently.
“If I don’t put a budget in there and something comes up, you have to do an additional appropriation and go through a couple of meetings to get approval. This way you already have the approval there. If we don’t need it, we don’t spend it,” he said.
The district’s debt service fund is also advertised a bit higher for 2020 at $4,002,618. In 2019 it was advertised for $3,999,929 — a difference of less than $3,000.
Harris said the budget for that fund is always around $4 million.
“It’s always going to be very steady,” Harris said of the debt service fund.
The current property tax levy for that fund is $4,337,954, according to the notice to the taxpayers.
That fund is used to pay the district’s leases and bonds.
At the Oct. 17 meeting, the school board will hear a presentation from financial advisers Baker Tilly and bond counsel Jane Herndon with Ice Miller about issuing a $3.6 million bond in 2020. The bond would be paid off over three years.
The bond will replace debt that is currently falling off, which means the new bond will have no impact on the tax rate.
According to the taxpayer notice, the referendum fund is advertised at $1,100,000 for 2020. In 2019, it was advertised at $1,010,000. The property tax levy for that fund is currently $1,049,082, according to the notice.
“We want that AV (assessed values) to go up because the higher the assessed value, the more money that 8-cents brings in, so hopefully we’ll get a little bit more money each year as the assessed values creep up,” Harris said.
Voters approved the referendum in 2016. Part of the referendum goes to the Brown County Career Resource Center with the rest going to help pay teacher salaries.
Tuition support money now funds the “education fund”; it used to go into the general fund. Both funds are responsible for paying more teachers and staff.
Hammack’s salary is now paid out of the district’s “operation fund,” which comes from property taxes.
Expenses out of the education fund must be tied directly to student instruction or support services. The budget for that fund in 2020 is $13.4 million. It was advertised at about $12,397,756 million in 2019.
Harris said that increase is due to some expenses out of that fund going up this year. Per Indiana Code, the school board will have to approve a cash transfer from the education fund to the operations fund for next year. Harris said the transfer will be about $1.9 million because the transfer cannot be more than 15-percent of the revenues out of the education fund.
That resolution for the transfer next year is expected to be passed at the Oct. 17 meeting.
The operations fund’s budget for 2020 is $7,692,500. In 2019, the budget was $7,909,500. The current property tax levy for that fund is at $4,701,198.
Harris said that the operations fund also has a cash balance of about $900,000 and that the education fund transfer along with other revenue sources, like the district’s portion of the property tax replacement credit, will help fund that $7.6 million budget.
In the 2020 through 2024 school bus replacement plan, Harris budgeted for the district buying two school buses a year for the next five years.
In the district’s capital project plan for the next three years, he had the district spending $8,280,000 on technology, building equipment and safety upgrades.
During his presentation to the board, Harris said if assessed values continue to increase for 2019 then there’s a “very good possibility” that the school’s tax would be less in 2020 than it was in 2019.
The district’s tax rate for 2019 $0.7693. The district’s certified levy for 2019 is $10,088,234.
The assessed value certified for 2019 that is payable in 2020 is $1,328,487,087. In 2018 it was certified at $1,280,921,849, according to the Brown County Auditor’s Office.
Health insurance update
Looking ahead to next year, Superintendent Laura Hammack informed the school board during the Oct. 3 meeting that all school employees will not see an increase in their health insurance premiums next year.
This is the second year in a row that employees will not see an increase.
The school district’s health insurance benefit adviser is R.E. Sutton & Associates. The company goes out into the health insurance marketplace to find the best renewal rates.
“Diane (Titchenell) told us at the health insurance committee meeting that she and Richard (Sutton) have made a pact that they don’t recommend any districts not take an increase, but that there was no question in our situation that there was just no need to do that this year,” Hammack said.
The district’s health insurance fund is now at $1.3 million, Hammack said.
Not having an increase in health insurance premiums this year can be credited to a couple of different reasons, she continued.
“First, we are funded well. We have premiums that we collect on behalf of our employees and the board contributes a percentage on the behalf of all of our employees. Those dollars fund our plan. We’re a self-funded plan. We’re funding at the level that we need to be funding,” Hammack said.
Discounts through Anthem, the district’s health insurance provider, is another reason.
“There’s no doubt that the discounts they are able to offer us are making a difference,” Hammack said.
The maximum expected cost to renew with Anthem is $3,445,703 for 2020. The current cost for their plan now is $3,664,690 according to the health plan cost comparison Hammack shared with the board.
Early in 2018, the doors to the Brown County Health and Wellness Center opened as an option for school employees to use for doctor visits, labs and prescriptions instead of going out to other providers.
There are no additional costs to go to the clinic since the employees’ membership fees are covered under the health insurance premiums they pay.
The school district decided to open a clinic as a way to save on its health insurance costs. Hammack established a committee to study the issue in 2016. The committee heard that a local clinic would help employees get care quickly so they would not have to miss an entire day of school driving somewhere else to go to an appointment.
The clinic, at Brown County Schools’ Eagle Park athletic complex, offers physical exams; acute care, like treating earaches and sore throats; and some urgent care, like splinting, wound care and x-rays. It also offers preventative care including health and lifestyle coaching. The clinic has an on-site pharmacy and lab testing.
“I really applaud our employees because they are using it. We are at saturation point that is well beyond what they would expect our group to be, so that means folks trust the clinic, they are using the clinic. They are using it for preventive care, acute care and they are using it for labs and pharmacy,” Hammack said.
“The beauty is that our plan is healthy because we’re using the health and wellness center. The discounts that we realize are dollars that we save. They are not flying out into the marketplace to other care sites.”
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Three Brown County school buildings will receive upgrades to their HVAC systems, windows and roofs starting next summer.
Representatives from Performance Services attended the Sept. 19 Brown County Schools Board of Trustees meeting to discuss plans for the junior high, Sprunica and Helmsburg elementary schools.
A portion of funding for this round of projects will come from the $3 million bond issuance in 2018.
At the Oct. 3 school board meeting, plans were announced for the district to issue a bond in 2020 that would replace debt that is currently falling off, which means the new bond will have no impact on the tax rate. A portion of that bond would also be used to help fund the projects.
Performance Services will be responsible for bidding out the projects. The district had contracted with the company last year. Since last year, the company has been working on analyses of each building and the roofs.
“You’ve got older, failing equipment in these buildings. You can continue to fix them and it will become very, very costly as time goes on, so we’ll be replacing old, failing equipment. The biggest piece is we’re improving the learning environment,” said Steve Thoman, the business development manager for Performance Services.
Thoman said his company commits to providing indoor air quality, including comfortable temperatures in the building and reducing noise levels related to heating and cooling the buildings. “I know there’s a lot of complaints right now within the buildings. You have the air vents there, teachers are talking really loud, trying to get over that noise, or the air is hitting them in the face,” Thoman said.
LED lights will also be installed in all of the buildings to help bring “optimal light levels” and reduce energy costs.
At Sprunica, the plan is to replace a chiller on the roof that is 20 years old, pumps that distribute heating and cooling water throughout the building, electrical distribution panels that no longer have replacement parts, and rooftop HVAC equipment for the gym and cafeteria. Some of the HVAC units have compromised insulation, allowing moisture to get into duct work, engineer Neal Fleck said.
Individual classroom unit ventilators will also be replaced, along with the classroom lighting, and single-pane windows will be replaced with double-pane windows. Air transfer grills will also be replaced on classroom doors since they no longer meet code. New ceiling pads will also be installed.
Plans for Helmsburg are similar, which also has a 20-year-old chiller and pumps.
“It’s the same vintage, rooftop air handling units that serve the library area and science room. We will be replacing all of those,” Fleck said.
One of the concerns at Helmsburg is exterior lighting. There are plans to possibly install wall-mounted exterior lighting on the front and north side of that building.
The roof at the junior high school needs to be replaced. Fleck said there have been issues with leaks and shingles blowing off in bad weather.
New thermostats will be installed in all three buildings that can be monitored off-site.
Thoman said that Performance Services is working to finalize project details before bids are let. He estimated they could present the total project and cost at the Nov. 7 meeting.
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