Investment summary shows decrease in interest earned
A summary of Brown County Schools’ investments last year showed a steep decline due to COVID-19.
Corporation treasurer Julie Smith presented the summary of investments at the Jan. 6 Brown County School Board of Trustees meeting.
The district has money in a PNC Bank checking account and with Trust Indiana. Both accounts collect interest.
In 2021, interest from both of those accounts totaled $3,464.39. In 2020, the interest earned was $34,000.
“It’s continuing to go down every single month. As soon as the economy sees a little bit of a change, we hope to get that back up to where it was pre-COVID. It is averaging 0.01% a month for PNC and Trust Indiana is 0.06%,” Smith said.
Money from interest earned is deposited into the education fund.
“There’s just a little less in that. We try to make it up the best that we can,” Smith said.
At the same meeting, financial consultant Bob Harris presented a detailed report on the school district’s 2020 budget as part of a requirement the Indiana state legislature approved last year.
The state legislature now requires the Distressed Unit Appeals Board to complete a fiscal report annually on each school in the state that then is presented to the school board. This is different from the annual financial report the district releases each summer. The DUAB report was based on 2020 because that was the most recent data available to them, Harris said.
The report focused on six different areas: average daily membership, or student count; fund balances; annual deficit and surplus; fund balances as percent of operations expenditures; the type of revenue the district receives; and the operating referendum as a percent of the district’s total revenue.
The ADM part of the report shows Brown County Schools experiencing a decline in how many students attend school here since school year 2012-2013.
Harris said the fund balances from 2020 were consistent and did not fluctuate.
The schools’ budget operates out of two main funds: education and operations, which is what the legislature focuses on the most in these reports, Harris explained.
State tuition support — a certain dollar amount for each student enrolled — goes into the education fund, while the operations fund receives money from property taxes and other sources. There are rules for how money can be spent from each fund. The education fund can only be used to pay employees who are in the classroom, including teachers, paraprofessionals and principals. The superintendent and other staff who do not have a direct role in the classroom are paid from the operations fund.
The report also showed the district had more expenditures than revenue in 2020, but Harris said there are three reasons for that including the fact that the report does not count transfers from the education to operations fund made during the year to help that fund as revenue. The district also receives grants to cover different expenses in the district and has to spend money before being reimbursed. The third reason is the district’s construction fund, which is established when a bond issuance is done, and how the district has to spend the money in that fund down to zero without any additional revenue coming in.
State guidelines wants districts to have eight to 10% cash available. As of 2020, Brown County Schools had 28.7% cash available across all of the funds in the district. The education fund alone had 15% cash available in 2020 and the operations fund was at 25%, Harris said.
When looking at the revenue the district receives, state tuition support makes up the biggest portion. The district gets about $13 million in revenue from that fund. In total the district receives $27 million in revenue from state, federal and local sources, including property taxes to fund its budget.
The referendum money, which also comes from property taxes, has its own fund. It goes toward paying staff salaries, benefits and raises. According to the report, the $1.1 million in revenue from the referendum makes up about 4% of the district’s total revenue.
Remaining funds include the district’s debt service fund, which is used to pay off any liabilities the district holds, like bonds or leases, and is funded by the same revenue sources as the operations fund. The rainy day fund gets excess revenue.
At the Jan. 6 meeting, Harris also gave a report on the end of year balances for 2021. He said that all of the school district’s funds at the end of last year had “very good balances.”
“Every one of our budget funds has more money than we started with, we are living within our means, even with the drop in ADM, the adjustments the board and the superintendent have made have been the right ones. The financial status of all of our budget funds is very good,” he said.
“This time next year they will put out a new report for 2021 and, as I just stated, the revenue balances on these graphs will be very consistent and inch up a bit.”
School board approves residential TIF for new neighborhood
The Brown County School Board of Trustees approved a resolution to allow the Nashville Redevelopment Commission to capture new property tax revenue from a soon to be built subdivision.
The resolution was approved Jan. 6 as part of the redevelopment commission’s plan to establish a residential tax-increment financing (TIF) area for the new Woods Lane subdivision. The subdivision will be in the area of the Tuck A Way Ridge neighborhood not far from Nashville off of Old State Road 46.
In a TIF area, a portion of new property tax revenue is captured for use by the redevelopment commission. That new tax revenue is the difference between what that land was taxed at when it became part of the TIF area and what it is being taxed at now.
The school district is one of the entities in the county that receives a portion of property taxes.
The capture of tax increments from the new development will enable the RDC to provide the public improvements necessary to make the downtown a “thriving hub of economic activity to benefit the entire community,” the RDC’s economic development plan states.
Projects could include pedestrian transportation enhancement, like curbs, gutters, sidewalks, street lighting, signage, etc.; sidewalk and streetscape improvements in the town; and a multipurpose trail down Old 46 to Woods Lane.
TIF also stops the flow of those new property taxes to any taxing unit besides the redevelopment commission for up to 25 years. The original taxes on the undeveloped property, though, keep being distributed. After the TIF expires, all taxing units receive the increased amount.
The commission said that there may be a small impact on Brown County School, but it depends on the levy they have. If it interferes or makes a substantial impact on the schools, the commission said that they will reevaluate the area.
The commission’s adviser Ed Curtin attended a December school board meeting to ask for the approval of the resolution, but it was tabled after some questions were raised about the price of the homes in the subdivision and if those homes would be appealing to young families to move then send their children to school here.
The resolution was approved unanimously on Jan. 6. No additional discussion was had before, or after, the vote.
The RDC will ultimately pick which projects would be funded with the additional property tax revenue, but the projects will have to align with the economic development plan.
The TIF area will have to go before the county’s Area Plan Commission for approval before a resolution can be voted on by the RDC.
