DUBOIS — Kaddy Merkel was one of two speakers moved to tears over the possible closure of Celestine Elementary School at Tuesday night’s community forum for the Northeast Dubois School Corp. feasibility study.
About 150 people attended the forum, less than at last Tuesday’s forum but enough to create a buzz.
Merkel was at last week’s discussion in Celestine when the idea of closing Celestine Elementary first surfaced as an option as Northeast Dubois schools search for a way to fix an ongoing money shortage.
“It’s just like home when you walk in there,” the St. Anthony resident said of Celestine, the school she and many of her relatives attended.
She pointed out that closing Celestine would result in larger class sizes at Dubois Elementary School, which she does not want. Her friend, Martha Goepfrich, agreed.
“It’s not that Dubois is bad,” Goepfrich said. “It’s just we like the smaller class sizes.”
Goepfrich was the second generation in her family to attend Celestine.
Northeast Dubois School Board member Brennan Schepers also grew up in Celestine and attended elementary school there.
“It’s tough to close any school or corporation because of the effect it has on the community,” Schepers said. “It’ll be a tough decision.”
Closing Celestine Elementary will be one of several cost-saving options Brookston-based Administrator Assistance examines during the general fund feasibility study for Northeast Dubois schools. The other possible avenues to create more cash flow include changes to benefits and salaries, grade distribution among buildings and a referendum. The corporation requisitioned the study because it’s struggling to cover operation costs as it grapples with falling revenues after a decade of changes in laws and state funding, and administrators have already tried everything they can think of to solve the problem, including freezes to faculty and staff salaries, cutting hours and not replacing retiring teachers.
“We feel like we’ve been very frugal with our spending,” Superintendent Bill Hochgesang said. “Is there more we could do? I’m sure there is.”
School Board President Mary Pankey has served on the board for 27 years and remembers similar financial troubles 25 years ago.
“The big difference now is we’ve already done everything else that is less painful,” said Pankey. “We just settled on a (teachers’) contract at no (pay) increase.”
One of the suggestions from community members was cutting benefits to board members. Board members receive a stipend for their service as well as school insurance benefits. Unlike teachers, however, board members are not required to pay a premium and previously had no deductible. The board recently added a $1,500 deductible to board member plans.
“We’re in support of doing our share, too,” Pankey said.
Schepers and board member John Siebert said further changes to board benefits will be part of the discussion.
“I wouldn’t be opposed to (cutting the benefits all together),” Siebert said.
“I wouldn’t either,” Schepers agreed.
The two said the other board members — Pankey, Kelly Knies and Bernie Knies— would likely be open to the idea as well.
Bruce Hatton of Administrator Assistance pointed out that Northeast Dubois is not the only school corporation facing money troubles. Nearby Pike County School Corporation and Barr-Reeve Community Schools in Montgomery have run referendums to add money to their general funds. Barr-Reeve’s passed; Pike County’s did not.
“It’s a very common thing that we have,” Hatton said of money woes.
The company has already spoken with staff members, administrators and students. Such conversations will continue in the coming weeks. The study results will be presented at a public meeting likely in the Northeast Dubois High School cafeteria in January.
Hochgesang explained that the corporation’s troubles trace back to 2008 when the Indiana Legislature took over funding schools’ general funds, or everyday operating costs, and adopted a money-follows-the-student system. The new system puts a price on each student and awards corporations money according to total enrollment. When a corporation’s enrollment drops, the amount of money awarded to the general fund drops, too. In the last two years, Northeast Dubois’ enrollment has dropped by 71 students corporation-wide, resulting in a loss of about $400,000 to the general fund.
At the same time Northeast Dubois faced falling enrollment, the district also received less and less money per student from the state each year. When the 2008 plan went into effect, some schools, Northeast Dubois being one, were receiving above-average funding from the state while others were receiving below-average funding. The Legislature chose a value near the average, dubbed the foundation amount, and began giving schools receiving more than the foundation amount, such as Northeast Dubois, less money each year over an eight-year span to bring those corporations closer to the foundation amount, which hovers at about $4,500 per student. The 2015-2016 school year is the final year in that eight-year period.
State Representative Mike Braun, R-Jasper, attended Tuesday’s meeting and explained that the state chose the system largely because of urban schools in Marion, Lake and Allen counties that were not only facing financial problems, but were also under-preforming in terms of test scores and graduation rates.
“Those corrections were made not to address counties like ours that are performing, but to address counties where we were pouring money down a rat hole,” Braun said.
Braun pointed out that at the state level, most decisions are not made based on southern Indiana, but rather on Marion, Lake and Allen counties where some of the largest cities are located — Lake County borders Chicago, Fort Wayne is in Allen County and Indianapolis is in Marion County. Braun said in the long run, the money-follows-the-student model makes sense for those cities, and the Legislature is unlikely to make changes to the system simply for rural counties.
“You can’t rely on the state,” Braun said. “There aren’t enough of us rural legislators.”
Prior to 2008, the state paid about 85 percent of schools’ general funds, and superintendents levied property taxes to cover the rest. Now, the state pays 100 percent of the general fund and no property tax money can go to the general fund unless voters pass a referendum. Northeast Dubois has not run a referendum.
Property taxes still fund schools’ other coffers, such as the debt service fund, which works like a mortgage or home equity loan, capital projects fund, transportation fund and bus replacement fund. Money from those funds, however, cannot be moved to the general fund, nor can schools borrow money through the debt service fund to supplement the general fund. The debt service fund is specifically for building maintenance. That is why Northeast Dubois has the money to replace the high school’s HVAC units, an expense that is paid from the capital projects and/or debt service funds, but is struggling to cover everyday costs.
“What’s difficult for me is ... when it comes down to the rubber hitting the floor and our kids getting educated, we have to sit here tonight,” Hochgesang said. “I have to ask you what can we compromise? What can we give up?”
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