VIGO COUNTY, Ind – The Vigo County School Corporation had approximately over $3 million more than they thought at the end of 2019.
The 2019 year-end cash balance of $16.2 million is higher than what it had initially projected as $13.5 million.
So, what happened?
In May and June last year the cash balance was expected to be between $12 and $13 million.
In a statement from Superintendent Rob Haworth, he said that if you include the Rainy-Day Fund the balance climbs to $14.6 million. The corporation also qualified for a waiver and was able to transfer around $1.6 million from the debt service fund. Now the cash balance is approximately $16.2 million.
What is not clear is how the corporation miscalculated or lost track of around $4 million.
On January 10th the Corporation announced that Bruce Perry was no longer serving as the VCSC chief financial officer. Officials are being tight-lipped on what happened to Perry. Did he quit or was he fired?
Due to this newfound money, Superintendent Haworth said that they have renegotiated the contract with the Vigo County Teachers Association.
The previously approved teachers’ contract has now been amended to include over $1.1 million retroactive pay and higher minimum salary for teachers with at least one year of experience.
The school board will have to approve the changes at their meeting Monday.
Haworth maintains the need for the referendum and proposed cost cutting measures.
- HAWORTH STATEMENT ON TEACHER COMPENSATION, CASH BALANCE
Vigo County School Corporation teachers and staff are committed, passionate professionals. But our teachers, like their colleagues across the state of Indiana, often have to take on second jobs to make ends meet. Teacher pay is tied to funding from the state sales tax, and teachers across Indiana are not paid what they are truly worth. We have a teacher shortage across our state and here at home, and pay is certainly part of the problem. We must continue to find ways to improve teacher pay.
As 2019 came to an end, and as we were negotiating a contract, I was concerned that by providing retroactive pay, the cash balance would fall below $13.5 million. As we closed out the 2019 calendar year, it became evident that we could, in fact, provide retroactive pay to our teachers. In reaching out to Vigo County Teachers Association leadership, we sought to reintroduce retroactive pay. This evening, we reached a tentative agreement that must be approved by the school board to do that, as well as improve the minimum salary of teachers with at least one year of experience.
As we close out the 2019 fiscal year, our cash balance ended at $13,031,773. If you include the Rainy Day fund, that total rises to $14,610,247.
Over the last 10 years there have been continual changes in the state statutes regulating education in order to protect the amount of property taxes assigned to the Debt Service Fund. In 2019 the VCSC qualified for the protected tax waiver in the Debt Service Fund. In essence, this would allow the school corporation to transfer these funds from the Debt Service Fund to the Operating or Education Fund. Due to the December 2019 collections, the protected tax funds arrived at $1,629,300. Originally, we projected this income to be $1.2 million. Adding the protected tax waiver funds to our cash balance makes it $16,239,547.
Tonight’s agreement with the VCTA is an estimated package of $1.1 million dollars. When combined with outstanding bills of $710,687 from the 2019 calendar year, our adjusted estimated cash balance is $14,428,861.
The Vigo County School Corporation is committed to maintaining a cash balance of 13.5 million dollars, which will protect our bond rating. A favorable bond rating is key to bringing important advancements to our schools. This week, when we discovered our adjusted estimated cash balance would be above $13.5 million, we sought to improve teacher contracts for 2019-20 because it’s quite simply the right thing to do.
Throughout our community conversations regarding the referendum, we reminded the community that we would need at least $8 million of spending cuts if the referendum did not pass. In 2019, we spent more than $7.2 million than we brought in from federal, state, and local resources, however when adjusted to include retroactive pay and 2019 outstanding bills, it exceeded the $8 million mark we spoke of in our community meetings. We are thankful for the passage of the 2019 referendum, however, as these numbers indicate, the referendum dollars must work in tandem with reduced spending to create a balanced budget.
Reducing our spending is a long-term strategy, and we must face the reality of declining enrollment. Spending cuts proposed in October 2019 will right-size our budget for our enrollment. In the meantime, we must continue to retain and attract the quality teachers we have come to expect in Vigo County, and it is my hope that revisiting 2019-20 compensation in light of a better-than-projected cash balance will help meet that important goal.
Decreasing enrollment continues to be the major issue for the district. Vigo County School Corporation enrollment fell by more than 200 students in 2019-20 and the total number of school-aged children living in Vigo County fell by more than 300 students. Vigo Virtual Success Academy has been successful at slowing our enrollment decline. However, unless we see a change in the state funding formula, our projected increase in “new” money for 2021 will once again be less than 2%.