Preparing For The
Community Roundtables
An Update On The Status Of Planning
For The 2010 General Fund
Referendum
September 23, 2009
1
Process Schedule
September 30
October 7
October 14
October 28 or
November 11
Special Session
Community Roundtable
(Eastwood) - 7:00 PM
Special Session
Community Roundtable
(Westlane) - 7:00 PM
Regular School Board Meeting –
Board Discussion
Regular School Board Meeting:
Board Adoption of the Resolution
2
Where We Are In The Process



We have discussed the financial realities
of the district.
We have discussed what we have learned
since 2003.
We have discussed some principles, really
recommendations, that should guide our
work.
3
Recapping Lessons Learned
1.
2.
3.
Our Capital Projects Fund (CPF) has developed
into a fund that must accommodate fixed and
recurring expenses in addition to one-time
repair or replacement costs.
Technology costs have grown based upon the
need to develop and maintain an adequate
technology infrastructure, renew software
licenses and purchase computers.
Allowing the referendum amount to grow over
the 7 years has increased pressure on our CPF.
4
More Lessons Learned
4.
5.
6.
As AV decreases due to larger homestead
deductions, the CPF will decrease in the short
term.
While the $30 million compromise bond issue will
help address some HVAC and roofing needs, our
aging buildings are going to require more
maintenance and extensive repairs to be funded
through CPF.
The CPF rate has declined causing the $.10 for
the Referendum Fund to become an increasingly
larger share of the overall rate.
5
More Lessons Learned
7.
8.
9.
Indiana is now a tax referendum state
in every sense of the word.
The referendum must be a grass roots
effort on the part of the community to
continue the great educational
programming of the district.
Transparency and openness will be
keys in conducting this conversation
within our community.
6
Principles of the Referendum
1.
2.
The Referendum must not constitute
a tax increase. The Referendum tax
rate/levy must be neutralized by
reducing the levy in the CPF.
The adoption and eventual passage
of the referendum must be a grass
roots effort in our community. The
election campaign is the work of the
community.
7
Principles, Continued
3.
4.
The Board’s role is to give the
community a financially sound,
fiscally responsible, and sustainable
plan to continue the excellence of
our district by providing additional
support for our General Fund.
The referendum must be used to
maintain the health of the General
Fund.
8
Principles, continued
5.
6.
The dollar amount raised in year one
(2011) of the referendum must be fixed
for the seven year period. That dollar
amount must not be allowed grow over
time.
We should not build an “operating
balance” in the fund as was done in the
original Referendum.
9
Considering Four Options And
Their Ramifications
Understanding The Results Of
Any Action
10
Option #1
Do Nothing And Let The
Current Referendum
Expire At The End Of 2010.
11
Words of Warning About
Conjecturing
About
Future
Cuts
 The Board would have to adopt any plan



including all the details. What follows is
not a plan.
The numbers presented here represent real
people and real consequences.
Schools are people-intensive places.
There are any number of ways to do this,
but all involve reducing the number of
people and programs available to our
children.
12
What Reducing the GF Budget by
$5.3 Million Might Include
Eliminate approximately 45 teaching
Positions District Wide
$3,000,000
Eliminate 4.5 Administrative Positions
$445,000
Eliminate All Alternative Programs
(Academy Six, Youth Support
Academy, North Central Technology
School)
Eliminate All Summer School
Programs
$296,000
$339,000
13
What Reducing the GF Budget by
$5.3 Million Might Include, cont’d.
Eliminate 40% of all Elementary
Classroom Assistants
$472,000
Eliminate 40% of all positions on the
$378,000
ECA schedule (Athletics, fine arts, etc.)
Eliminate custodial and classified
support positions
$321,500
Eliminate all professional development, $115,000
including the GF commitment to IB
Total - $5,366,500
14
Beyond The Numbers, What Can
People Expect?



Class sizes will increase across the board,
K-12.
Small enrollment, elective courses will be
eliminated at the high school and middle
schools because of the elimination of
work-ahead courses in summer school and
staff reductions.
Safety and order in our schools will suffer
through a reduction of supervision.
15
Beyond The Numbers, What Can
People Expect? - Continued


Fine arts and athletic programs will be
fewer in number. We could resort to payfor-play, but equity and access issues will
arise as a result of the financial need of
many children.
There will be fewer resources for children
at risk or in need.
16
Beyond The Numbers, What Can
People Expect? - Continued
 There
will be fewer opportunities
for Excellence and Enrichment.
 There will be fewer higher level
academic choices.
 The K-12, IB program will become
less viable.
17
Beyond The Numbers, What Can
People Expect? - Continued



The district will become less desirable for
talented teachers and administrators.
Continued excellence will be
compromised.
But, the budget will be balanced and
we will be living within the level of
support determined to be adequate
through the State funding formula.
18
Option #2
Ask voters to approve a
referendum the size of the one
we currently have and continue to
neutralize the impact of the
referendum tax rate against the
Capital Projects Fund rate.
19
What Can We Expect with
Option 2?


Because the fixed and recurring costs in
the CPF will remain the same or grow, it
will be more and more difficult to deal
with maintenance of our buildings and
emergencies and unforeseen needs.
The tax caps could require us to reduce
the revenue available in our CPF.
20
Option #3
Ask voters to approve a referendum
that is restructured in a way to
lessen the negative impact on the
Capital Projects Fund and maintain
resources sufficient for great
programming.
21
What Can We Expect With
Option 3?
The total levy of the referendum would
be capped and not grow throughout the
term.
 The School Board would pass a
resolution to neutralize the total
referendum by reducing the CPF levy.
 The School Board would have to
approve a smaller budget reduction
program.

22
What Can We Expect With
Option 3? - continued
The CPF would have more room to
accommodate fixed and recurring
costs as well as technology,
maintenance, and unforeseen needs.
 We could maintain the current
Referendum Cash Balance for 2017.

23
What Can We Expect With
Option 3? - continued

The educational program and
opportunities currently available to
students would remain relatively
unchanged.
24
Option #4
Renew The Referendum In 2010,
But Use The New Seven-year
Period To Reduce The GF Budget
To Eliminate The Need For A
Referendum By 2017.
25
What Can We Expect With
Option 4?
 The
same level of reductions in
Option 1 will result, but the
reductions would be phased in
over the next seven school years.
26
Issues Associated with the
Reality of Making Budget Cuts
Timing and Talent are Critical
27
Timing Issues


In order for the reductions to take place in
the 2010-2011 school year, we would
have to develop two master schedules at
each school – one with the reductions,
and one without.
Instead, the reductions necessary in
Option 1 would be phased in during the
2011-2012 school year using the current
referendum cash balance as a buffer.
28
Talent
To try to make the reductions, for real or in
contingency planning, for the 2010-2011
year, the potential looms for the loss of
talent (teachers, administrators, resident
and non-resident students) during the
window of uncertainty – March 1-May 4,
2010.
29
Some Perspective on MSDWT
Tax Rates and Past Borrowing
The Effects of the Work of
the General Assembly in
2008
30
2008 Marion County Township
School Tax Rates
3.0000
2.7544
2.7500
Rate in Dollars
2.5000
2.2500
2.1254
2.0000
1.7500
2.0346
1.9388
1.6300
1.5275
1.5000
1.4060
1.2500
1.1291
1.0000
Decatur
Franklin
Metropolitan School Districts
1
Wayne Warren Perry Pike
Lawrence
Washington
31
First A Few Figures About the
Reality of Property Taxes
32
About the $50 Million Compromise
Bond Issue



Compromise reached in 2005 called for the sale
of a total of $50 Million in Bonds in 2 separate
issues.
The total cost of repayment is $77,913,000,
including interest over 22 years.
Because the $50 Million is under the 1, 2 or 3 %
tax caps, the effects on a household are
negligible. Anything over the cap will have to be
reduced from one of the other funds.
33
How Does that Translate to
Property Taxes
Year
Tax Rate
2009
$.0691
Tax Impact on
$100,000 Net
Assessed Valuation
$69.11
2017
$.0647
$64.68
2027
$.0347
$34.69
34
Process Schedule
September 30
Special Session
Community Roundtable
(Eastwood) - 7:00 PM
October 7
Special Session
Community Roundtable
(Westlane) - 7:00 PM
October 14
Regular School Board Meeting –
Board Discussion
October 28 or
November 11
Regular School Board Meeting:
Board Adoption of the Resolution
35