In general, it’s about people

Editor’s note: This is the first in a three-part series about issues related to the possible closing of schools in Jay County.
To close schools or not close schools.
That is a question Jay School Corporation has been considering for more than a year.
At the center of that discussion is the general fund, which closed 2015 with a balance of $1.68 million.
That total represents about 7 percent of the corporation’s annual general fund expenditures. It’s recommended that a school system have 12 to 15 percent (1.5 to two months worth) left in reserve, money that could be used in difficult financial times.
For Jay Schools, that would figure out to about $3 million.
The corporation had a balance of about $5 million in the 1990s before that number dipped. It was rebuilt to about $3 million, where it stayed from 2005 through 2012.
But deficit spending in three of the last four years, has sent that balance plummeting. Jay Schools had deficit spending of more than $800,000 in 2013 and between $300,000 and $400,000 in 2012 and 2015.
Those drops led to concerns about the corporation’s financial health and discussions about how to save money in the future. Superintendent Tim Long brought up the possibility of closing schools early in 2015, and in September a building study offered the board several options. Those plans included the possibility of shuttering Pennville, Judge Haynes and Westlawn elementary schools, moving all eighth graders to Jay County High School and moving all sixth and seventh graders to East Jay Middle School.
Business manager Brad DeRome has projected that in 2016 Jay Schools will have a $192,000 general fund surplus, which would be its largest since 2009 and would help rebuild the year-end balance.
That led to school board member Greg Wellman wondering out loud at recent meetings whether it is immediately necessary to close one or more buildings or if the greatest financial difficulties are over for the general fund.

What it isn’t
Though the general fund is the part of school spending most often discussed, 31 percent of the budget — a little more than $11 million this year — is spent elsewhere.
All of this non-general-fund money is raised through local property tax dollars.
The debt service fund accounts for more than a third of that money, coming in at $3.9 million for 2016. That is used to pay down debt that was taken on for a variety of reasons, the most common of which are major construction projects. Such projects over the last two decades in Jay School Corporation included the addition to East Jay Middle School and the renovation of heating and cooling systems at West Jay Middle School and Jay County High School.
The capital projects fund is money earmarked for upkeep of facilities and the purchase of equipment. It came in at $3.4 million for 2016 and is capped. By law, its tax rate cannot exceed $0.4167 per $100 of assessed value.
Jay School Corporation’s next largest fund is transportation, coming in at $2.44 million this year. It is used for operating expenses for school buses and other transportation equipment, as well as to pay bus drivers.
The remaining two funds are pension debt service ($936,193 this year), used to pay pension bonds, and bus replacement ($396,000), for the purchase of new buses.
None of those are tied to the general fund concerns the board has been discussing. And saving in these areas — for example, by buying fewer/cheaper buses or putting off building repairs — would not help to stabilize or rebuild the general fund.
“That money really just can’t be picked up and moved,” said DeRome. “You’re not going to see a windfall.”

What it is
The general fund makes up far and away the largest chunk of a school corporation’s budget. In Jay County it was set at $24,735,495 this year.
Unlike the funds mentioned above, the general fund does not affect the local tax rate. That changed in 2009, when funding responsibility was shifted to the state.
Almost all of the general fund dollars come from the state basic grant, which has ranged between $23.5 million and $24.3 million over the course of the last seven years. The 2016 number is projected at $24.2 million, which would represent an increase of more than $200,000 from the previous year. It is tied directly to enrollment — about $7,000 per student — and is distributed as determined by the state funding formula.
“Ninety-seven to 98 percent comes from the state of Indiana from the state basic grant,” said DeRome. “The other miscellaneous revenue that’s in there might be a little bit of interest income and other state money.”
The vast majority of money in the general fund goes toward two things — salaries and benefits. Together, those items added up to 89 percent of the spending from Jay School Corporation’s general fund in 2015.
“A good business manager rule of thumb, if you can be 86 to 90 (percent), that’s where you want to be,” said DeRome. “So when we say we have about a $24 or $25 million general fund, 90 percent of that is going for wages and benefits. We are in the people business in the general fund.”
The rest of the money, as indicated by the name of the fund, goes toward general operating expenses. In 2015, $1.5 million of that was general supplies (paper, books, etc.) while other expenditures include purchased services, utility payments and equipment.
So, when looking at the general fund, it mostly comes down to people. They bring in the money — in the form of dollar per student — and they are by far the largest expenditure — in the form of salaries and benefits.
“That’s why we try very hard to track people and enrollment,” said DeRome.
Saturday’s story will look at enrollment, what the trends have been and how many students are in each school.