Ultimately, for any public school district, it boils down to enrollment.
State funding formulas can be complex, and some of the various funds and expenditures that make up district budgets have to be hedged with projections and variables.
But the one thing a district can't hide from is enrollment, because that is the backbone from which state funding is derived...and East Allen County Schools is nearing the point where decreasing enrollment is going to force its school board to ask tough questions before the 2014 school year begins.
Kirby Stahly, the assistant superintendent of administrative services, during Tuesday night's meeting presented to the board EACS' proposed budget for 2014, which the board will, at some point, have to approve. However, before that happens, the board will have to square what could be a deficit of $1.8 million -- without a lot of room to make cuts from anywhere in the budget that wouldn't involve what board member Bob Nelson called "short-term pain."
It isn't an actual deficit, yet, in the true sense of the word, because as Stahly explained, the district has to prepare the budget using projections of items like revenue from taxes that haven't been collected and expenditures that haven't even taken place, like, for instance, bus repairs. Stahly also explained that the district shields itself from a scenario that cannot happen -- attempting to operate while knowing there would be an actual deficit -- by overstating those projected expenditures and understating projected revenues.
The problem: East Allen County Schools has seen enrollment declines since at least 2008-09, according to the state Department of Education's website, and a study commissioned by the board indicates the district is likely going to continue to shed students over the next few years.
The district reported 10,209 students in 2008-09 and 9,296 students in 2012-13...but the hit the district took after closing Paul Harding High School after the 2010-11 school year is obvious. Prior to that, EACS was losing a few dozen students per year -- not ideal for the district, but manageable.
But the district lost around 640 students from the 2010-11 school year to 2011-12, then another 150-plus students from 2011-12 to last year. Losing 800 students that quickly is applying pressure to the district's funding - even as wages paid to employees have decreased about $5 million during that span, from $53.4 million to $48.6 million - and the district administration and board members recognize it.
"Will we have significant challenges in the general fund? Yes," Stahly said in response to questioning from the board. Stahly also explained that the district's bus replacement fund will also likely need to be addressed within the next few years, because it will not be able to keep up with expenditures, even though the replacement cycle has increased from 10 to 12 years.
The board, in consultation with new superintendent Kenneth Folks, will likely schedule a public work session to discuss the 2014 budget, with board vice president Christopher Baker saying of the potential $1.8 million deficit, "We need to find a way to get that out of there," while saying that it is up to the board to ask one fundamental question: "What are our expectations of our budget?"
Board member Arden Hoffman and Baker each acknowledged that EACS' loss of students has to be addressed and stabilized, with Hoffman saying that "a lot of people are pulling at our students" to go elsewhere, while Baker said that "We have to increase our academic rigors if we're going to keep these students."
"We'll get our students back once things stabilize," Baker said, referring to the recent hire of Folks and the potential for new venture East Allen University to grow.
Nelson agreed with that assessment, saying during and after the meeting that he was optimistic about where the district would be in five years...but acknowledging that there could be some tough conversations before then.
"Ultimately, in reality, the charge that we have been given as a board is to address these kinds of issues and make what could be some very tough decisions, which could mean short-term pain for long-term gain," Nelson said.
EACS spokeswoman Tamyra Kelly said Wednesday morning that the district's projected general fund expenditures for 2014 are around $60.3 million, with anticipated revenues at $78.2 million. The budget is online at the district's website at www.eacs.k12.in.us, under the tab "Departments," then "Business Office."
EACS' projected revenues for this school year are a bit more than $79.8 million, down from the $88.5 million that was slated for 2011-2012. The general fund expenditure is around $59.6 million. The general fund is where salaries and benefits are paid to district employees.