Vigo County School Corporation has more money in the bank than thought

At 6:20 AM Thursday morning, Bill Riley, Director of Communications for the Vigo County School Corporation sent a statement to media outlets.

Posted: Jan 23, 2020 6:38 AM
Updated: Jan 23, 2020 12:29 PM

TERRE HAUTE, Ind (WTHI) - We're following breaking news from the Vigo County School Corporation.

We're working to confirm some information we received Wednesday night. It involves how much money the corporation has in the bank. And how much money it said it had when the superintendent was campaigning for a referendum.

LINK | VIGO COUNTY SCHOOL BOARD PASSES REFERENDUM FOR SCHOOL

There were two anonymous letters sent to us Wednesday night, one came from a source with ties to the corporation. it reads as a statement from Superintendent Rob Haworth.

It also reports that the corporation ended last year with a higher cash balance than first reported.

LINK | BRUCE PERRY OUT AS CHIEF FINANCIAL OFFICER FOR THE VIGO COUNTY SCHOOL CORPORATION

You were told about $13 million last December, now the corporation is reporting a cash balance of $16 million and it has now reached a new agreement with the teachers association.

The second anonymous letter appears to be written by representatives from the teachers association.

We've not been able to confirm this, as our calls and messages to teachers association leaders have not been returned. we will continue to reach out to our sources.

LINK | THE SCHOOL REFERENDUM QUESTION: WHAT WOULD IT COST YOU, AND WHAT WOULD THE BENEFIT BE TO VIGO COUNTY KIDS?

Haworth crunched some of these numbers for us. He wanted to explain the error in a way that is as transparent as possible.

Haworth also wants the public to know teachers will now receive pay-raises retroactively to the beginning of the school year.

That's something the teachers association wanted to begin with.

"If we would have known this cash balance over this cash balance...we would not have questioned retroactive pay. I think everybody knows we want to see compensation as a part of our referendum. So, when we saw the opportunity to do the right thing...our board supported it and it is going to allow us to do the right thing," Haworth told us.

The board should approve this additional pay raise at Monday night's meeting. After that, Haworth said the administration will figure out how to get these raises paid to teachers.

The board should also address Haworth's spending cut and revenue enhancement plan on Monday as well.

On Thursday morning, Bill Riley, Director of Communications for the Vigo County School Corporation released the following statement: 

DR. 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. Last 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%."

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