Friday, January 15, 2010

How to Minimize the Impact of Decatur School District Cuts

I previously suggested that the Metropolitan School District of Decatur Township sell off its excess property portfolio and make a variety of Administrative cuts in order to dig itself out of the disastrous financial hole dug by Superintendent Don Stinson and Assistant Superintendent for Business Jeff Baer, abetted by a rubber-stamping School Board.

I guess my brain could not process how truly deep a disastrous financial hole had been dug. So, with this entry I amend my suggestion for cuts to begin what will be a long, painful, process of making ends meet in the School District.


The total amount of cuts necessary totals $9.8 million.

The cuts required of all school districts by Governor Mitch Daniels, to the tune of 3.5%, amounts to $1.4 million for our District, according to Stinson's Fiscal Restructuring Plan. This cut is necessary because of the recession. I'm not a fan of the Governor, but I must give him credit that he did make cuts in all other spending before dipping into K-12 education revenues.

Cuts of $5.4 million are needed because of the mind boggling amount of debt Stinson, Baer, and the School Board have put on us. As part of the tax cap legislation, the State took over all funding for operations and transportation costs in all Indiana School Districts. That funding shifted last year and is the biggest reason many tax bills went down. As far as Schools are concerned, property taxes pretty much only go to cover payments on debt any more. But, because of the spending and buying sprees the Decatur officials went on over the last 8 years, the amount of property taxes they will get in 2010 will not be enough to cover the debt payments. So, Decatur Schools will have to add some of the operating and transportation money to the property tax revenues, so that they do not go into default on the bonds they have floated over the years. It is up to the District how much of the extra funds come from the Transportation Fund and how much from the General Fund. But, because the debt is so huge, a total of $5.4 million has to come from these two Funds in some combination.

Stinson and Baer claim they also must make cuts of $3 million to repay temporary loans. Because of Governor Daniels order for a new 2006 reassessment in Marion, and the resulting delay in collecting property taxes, all of the governmental units in our County have had to take out temporary, low interest, tax anticipation loans. Before each calendar year started, the Indiana Department of Local Government Finance (DLGF) would tell each governmental unit how much money they could expect down the road, 6 months to a year later, from taxes that eventually would be collected, just delayed. Then each unit would get a tax anticipation loan. Once the property taxes were collected, the units would use the money to pay off the loans. Interest rates were below 3%, throughout this period, at least for the tax anticipation loans the City of Indianapolis obtained. Well, we are almost back on track and the pay-2010 property taxes will go back to the May/November due dates. So, the last of the tax anticipation loans will get paid off shortly after the pay-2009 tax bills are collected in February. The question here is - how could the Decatur School District manage to owe $3 million for interest on a low interest, tax anticipation loan for all of 8 months? Even if the loan was for a year and the interest rate was 3%, you would have had to borrow $100 million to owe $3 million in interest. That is far more that the District's total budget for a year, much less only the property tax revenue for which they would have taken a tax anticipation loan. Through 2008, the latest year for which data are available on the State Department of Education website, the Decatur School District paid only $367,033 for interest on short term loans. Now they claim over $3 million is due? That doesn't pass the smell test.


The hole Stinson, Baer and the Decatur School Board dug is $9.8 million. On the just slightly good side, $3 million should be a one-time shortfall and we can look for one time savings and not on-going cuts for that amount. The 3.5% cut ordered of all Districts by Mitch Daniels, and amounting to $1.4 million for Decatur Schools, will likely be somewhat longer and dependant upon the State's recovery from the recession. So, for that we should look to on-going cuts that could be restored in a few years. But, for the $5.4 million in cuts to cover debt payments, the cuts will essentially have to be considered permanent as the debt will still hang over our heads for decades to come.

Previously I listed where $5.7 million in cuts could be obtained. Here I will amend that list by adding to it and covering the additional $4.1 million - thereby getting us to $9.8 million in cuts. I have chosen specific items from Don Stinson's Fiscal Restructuring Plan to supplement my original suggestions.


The District should sell its land holdings and its equity in the lease to buy agreement for the Southwest Office Pavilion (the old Concentra Building). This could generate $4.9 million. This could cover the one-time expense of $3 million plus the $1.4 million cut ordered by Daniels, with $0.5 million left over.


Cut Don Stinson's salary plus benefits package by 20% - save $67,000 every year.

Cut Candice Baer's job along with one other Central Office Administrator - save $330,000 every year.

Replace Susan Adams' administrator position with a custodian - save $100,000 every year.

Replace Gary Pellico's administrator position with a public relations person - save $100,000 every year.

Cut 4 building level Administrator positions - save $540,000 every year.

Cut all Administrator salaries plus benefits by 15%. This is larger than I originally proposed but they all got healthy raises when times were good, now they have to carry some burden while times are bad. You figure the average administrator is making $150,000 between salary and benefits - so a 15% cut would still leave them with $127,500 per year. Save about $575,000 every year.

These Administrator cuts would save the District $1.71 million per year.


Cut Teacher salaries plus benefits by 5% - save $1.3 million every year.

Encourage and expect at least 5 Teacher retirements - save at least $500,000 every year

These Teacher cuts would save the District $1.8 million every year.


Eliminate all department heads at the High School and Middle School - save $76,421

Eliminate one special education consultant position due to retirement - save $100,000

These cuts in support staff would save the District about 176,000 every year.


Eliminate paying for Ivy Tech use of Mitchell Building - save $164,000 every year

Vacate Early Childhood Building - save $624,690 every year

Eliminate old operations building - save $40,000 every year

These changes in building use would save the District about $829,000 every year.


Eliminate national conference attendance unless paid with grant - unknown savings

Develop rigid guidelines for travel/conference and credit card reimbursement - unknown savings

More emphasis on energy conservation - unknown savings

Eliminate all catering out of general fund - save $20,000 every year

Reduce extended contracts where feasible - unknown savings

Drop Plan 1 health insurance plan - unknown savings

Cap cafeteria plan at current level - save $63,000 every year

Cut technology department budget - save $292,894 every year

These cuts would save the District about $376,000 every year.

All totaled, these cuts add up to $9.79 million.

Other questionable expenses exist in the long term lease of the Mitchell Building. Unless some other entity agrees to take over that lease, the School District is on the hook for years to come. But it should be questioned why the Challenger Center is not self-sufficient. The taxpayers appear to be paying out over $380,000 every year for the Center. Other Centers around the Country make money, not run deficits. Also to be questioned is the expenditure of $265,501 per year for the Decatur Discovery Academy. This is a Charter School and should be able to survive using Charter School funds. If the School District can correct these issues, it could save another $645,000 every year.

These suggested cuts meet the goal, but preserve the Teaching Staff, Custodial Staff, Transportation Staff, Maintenance Staff, and the remaining security Staff. Any additional savings should first be applied to bringing back the trained security staff to man the High School and provide the first critical response in case of an emergency. The suggestion of closing Lynwood as an Elementary School is painful, but the failure to improve the education of the students enrolled there, combined with the overcrowding at Valley Mills and West Newton Elementary Schools, seems to leave no other alternative.


Anonymous said...

Where do you get your information? I am curious about the land the township owns and its value.

Had Enough Indy? said...

The purchase prices for 4 of the properties was noted in an audit of the District's books by the State Board of Accounts.

I have links and the prices for those properties in a previous entry :

Just to be complete, the property the Township Government owns would be different than what the School District owns. If you are interested in the former, the County Assessor would be the first place I would go. I believe they can sort their records by owner and give you a list. If not, they would likely know who you could contact for that information.

You could also file an open records request of the governmental unit you were interested in. The link I have to the Indiana Coalition for Open Government (in the left hand panel) leads to their website where they have a sample letter you can use for that request.

Anonymous said...


We need Teachers not Administrators said...

Pat Andrews, I certainly hope you are running for a seat on the School Board along with some other intelligent people like yourself. The people who are on the Board should all be voted out and the people of Decatur Township need to take action immediately and get involved our next chance to vote these people out. Is that in May of this year? Many people over here have no clue what is going on and they need to be told. All they know budget cuts, they don't know the real truth, that this Township has been ran by crooks for many years and now with the overspending and poor planning for example when they built the Junior High it could have been bigger then they wouldn't have had such a need for another School, DILC and who's wonderful idea was it to house however many 500(?) 5th & 6th Graders under one roof? They needed to be spread out not all together. And speaking of roofs the schotty construction of that DILC Building - I hear the roof has leaked really bad for a long time time - mold growing and it's been looked at many times but never fixed. I'm pretty sure all that crappy construction in this township was all by the same contractor. That gives us even more to look forward to.

This school year has been awful with everything going on and the stress to the people who teach our children that know they are losing there job or fear they will lose their job this Friday March 12,to be exact. My child told me her teacher read a story to the class with tear in her eyes as she read a story that was not sad. My child is a 1st Grader, they wonder why the teacher had tears in her eyes. It could be because she knows she'll receive a pink slip at the end of the week. How sad is that to know that our Teacher seem not to be as important as these Highly Compensated individuals who collect very large salaries and other perks that cost tax payers money. Hey that's not who is teaching our children and as far as I'm concerned they should be compensated much less than what they are. We can't afford to lose teacher, we need to lose these highly compensated Administrators of this Township. I went to a High School in Indianapolis 30 years ago and we had 1 Principal, I hear we have several at Decatur High School. Why would a High School need more than 1 Principal - ever heard of Vice Principals? Apparently not in Decatur Township they haven't.

Had Enough Indy? said...

We Need More Teachers Not Administrators - I agree with everything you have said. You said it quite well, too. I'd also include the dedicated bus drivers who take such good care of the kids and who are being treated so shabbily right now. And the security folks who provide not only protection from a worst case senario, but also are good people who can provide a friendly nudge in the right direction to a kid in need of that nudge.

As to the School Board, we have two good, non-incumbents running from the district in which I live. I have known Bobby Hire for over 20 years now, and he is a decent man who knows how to watch how money is spent. He raised his family in Decatur, sent his kids to Decatur schools, and worked hard until his retirement. I just recently met Natalie Coffey and I am really really impressed. She is clearly intelligent and well spoken (see her comments in "Meet Natalie Coffey" ) She has kids in school and pre-school, and she cares about a quality education for all of Decatur's children.

So, I think we have a good choice this time around. Unfortunately, we need three to get a majority. Perhaps with two allies, Doug Greenwald will provide the needed third vote to move this district in the right direction.

Meanwhile, we all have to keep the pressure up on Stinson and the Board, and we all have to get out and vote the incumbents out of office.