Brown County Schools continues to make strides towards a stable financial future, as continual budget cuts are made without a single teacher losing his or her job.
“Your year-end ‘19 numbers look very good,” financial consultant Bob Harris told the Brown County Schools Board of Trustees on Jan. 16.
Last year, the district was required to start using an education fund and an operations fund. Previously, money went into several other funds.
Tuition support money, which comes from the state, now goes to the education fund. It used to go into the general fund, which the education fund replaced. The education fund is responsible for paying teachers and staff, among other expenses related directly to students.
The district’s capital projects, transportation and bus replacement funds were replaced by the operations fund. It’s used to pay expenses not directly related to students, like transportation and bus expenses, utilities and insurance, and Superintendent Laura Hammack’s salary. The operation fund comes from property taxes.
Because different funds are being used this year than in previous years, it’s impossible to make direct comparisons, Hammack said in an email last month. “The education fund does not have the same expenditures being paid out of it like the general fund did. Similarly, the operations fund has different expenditures than the sum total of what would have been the CPF (capital projects fund), transportation and bus replacement funds,” she said.
However, after accounting for all of the fund transfers the state required through statute, Hammack said the district compared revenues to expenditures in each fund. “After transfers are considered, each fund ended with about $100,000 more than the fund had at the beginning of the year,” she said.
“This is really a big turnaround,” Harris said.
“This is a result of three-and-a-half years of Dr. Hammack and the board making adjustments to the spending.”
Since Hammack took over as superintendent almost four years ago, the district has continually made cuts to budgets as enrollment has declined. Student enrollment is tied directly to state funding.
In two school years, the district cut its budget by $2.3 million. This school year alone, the district cut almost an additional $1 million without anyone losing their jobs.
“That’s just unheard of, especially in a district this size,” Harris said.
“As you know, our funding is directly related to how many students we have, so we keep a close eye on that.”
The district has three student counts each year: one in September, another in February and a third one at the end of the school year, when Hammack submits her predictions for what enrollment will look like at the start of school in August, Harris said.
“Each time we get a student count, they readjust our funding,” he said.
This month will be the second count. Harris said around 95 percent of schools in the state have fewer students in February than in September, which means tuition support is likely to decrease further.
“We’ll be making more adjustments if our student count goes down in February or thinking about it,” Harris said.
“If it stays the same, that’s OK, but we are adjusting three times in nine months. That’s a lot of adjusting. You really don’t know what revenue you’re going to get. In our case, it’s been handled really well.”
Good news
About three-and-a-half years ago, Hammack and the school board decided to go with a different health insurance provider.
The school district also decided to open its own clinic as a way to save on health insurance costs, and to help employees get care quickly so they would not have to miss an entire day of school driving somewhere else.
Brown County Health and Wellness Center at Brown County Schools’ Eagle Park athletic complex opened in 2018. It 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.
The insurance change, coupled with opening a clinic, has taken the district from a $700,000 deficit in the self-insurance fund to a $1.4 million cash balance as of last week, Hammack said in her email.
“That’s just unheard of,” Harris said at the meeting.
Because of switching insurance companies, school employees have not seen a health insurance increase in two years. “That’s very rare,” Harris said.
“The average health insurance increase, I believe, was 6 percent across the country, with some seeing as high as 20 percent. I know two specific school corporations that were 15 percent. It’s a decision that was made that has really turned us around. I think our broker is kind of using us as a poster child.”
The district continues to make updates to buildings, software and safety measures throughout the district. In 2018, the district took out a $3 million bond to cover those costs. The bond has helped the district’s operations funds, which would have had to shoulder those costs.
“The cash balance is going down, as it should, as we spend the money, but it has taken a lot of the stress off of our operations fund being able to do a lot of these fix-ups and improvements through a bond issue rather than through the operations fund,” Harris said.
A portion of the bond will be used to cover upgrades to HVAC systems, windows and roofs starting this summer at the junior high, Sprunica and Helmsburg elementary schools.
When Hammack began working for the district as superintendent, the rainy day fund was at $0. Through budget cuts, that fund now has a balance of $1.7 million, she said last week.
Harris said it will be difficult to top the 2019 budget year, but the district can do it as long as it keeps adjusting as state tuition support changes.
“It’s just a constant keeping up with it. You have a superintendent who does a very good job with it,” Harris said.
“As a result, the two major funds (education and operations) are doing excellent. We have nice cash balances and more cash than we started with; 2019 was a very good budget year for Brown County Schools.”
