(Originally posted August 3, 2017)
- How did MCS get to this point?
- There are many factors that have contributed over time. Some factors were within the control of the MCS though many were not:
- Property tax caps and multiple legislative decisions that either limit or reduce funding for school districts.
- Steadily shrinking enrollment – Enrollment in 2012-2013 was 6800. Current enrollment is around 5300 (although the official number won’t be recorded until Sept. 15, which is the enrollment number the State uses for funding). The loss of 1,500 students in five years is dramatic and equates to a loss of over $10 million dollars in state funding.
- The failed referendum in 2013 – 53.7% voted NO to increase the tax base to support the transportation fund, which was impacted by protected taxes to the tune of $9 million.
- Denial by the IDOE of a waiver to stop school bus transportation in 2015 in response to the failed referendum.
- Questionable financial decisions over a multi-year span.
- What has the district done to reduce spending?
- Consolidated high schools
- Sale of Wilson Middle School
- Selling Storer, Mitchell, Sutton Elementary Schools
- Changed bus service provider to save $1.3 M
- Board voted unanimously to stop bus service in 2018 to reduce cost to around $400,000/yr. Although the state granted that waiver, the MCS has the option not to use it.
- Why was it necessary to engage an emergency management team?
The decision was made by the State legislature, which has the right to step in when school districts are seriously in debt and having difficulty meeting their obligations. Usually the State will step in at a district’s request, which was the case with Gary Schools. MCS, however, did not request help. Legislative action for MCS was added to the takeover language for Gary Schools and then passed by the General Assembly.
- What is the Distressed Unit Appeals Board and what do they do?
The Indiana Distressed Unit Appeals Board or DUAB is a unit of the Department of Local Government Finance or DLGF. According to the website, “The DLGF is responsible for ensuring property tax assessment and local government budgeting are carried out in accordance with Indiana law. The Department is charged with publishing property tax assessment rules and annually reviewing and approving the tax rates and levies of every political subdivision in the state, including all counties, cities, towns, townships, school corporations, libraries, and other entities with tax levy authority.”
The DUAB receives petitions from distressed political subdivisions and school corporations in need of relief and determines what action, if any should be taken. (see question 11).
- How was the emergency management team selected?
Once legislative action passed, the Distressed Unit Appeals Board (DUAB) requested a hearing with entities interested in stepping in as emergency managers for the struggling district. Two other companies, The Robert Bobb Group LLC and Crowe Horwath, LLP were also considered, as was Steve Baule MCS superintendent.
- Is Dr. Baule still the superintendent?
Yes. Nothing has changed academically or administratively with the district. The AA team is providing financial oversight and aggressively developing a strategic plan to restore the district’s financial health.
- How will this affect students?
It is a goal of the AA Emergency Management Team and MCS to keep negative changes in the financial structure as far away from classrooms and student programs as possible. It will be impossible to shield them from all changes, but we are confident in the ability and professionalism of our staff to maintain a positive learning environment.
- What does this mean for MCS administrators, teachers, and staff?
It means that everyone must recognize the urgent and critical financial situation MCS is in. It means sharing the sacrifices that must be made, supporting efforts to reduce the debt and strengthening the mission. It means remaining dedicated to the education of the children of Muncie.
- How does the Emergency Management Team plan to resolve this financial crisis?
The plan, as outlined by Emergency Manager Steve Edwards at a July school board meeting:
- Assist with development of a strategic plan to bring about financial stability.
- Negotiate the labor contract with teachers for 2017-18.
- Meet with leaders of Muncie Teachers Association regularly.
- Meet with MCS support staff and administrators.
- Review staffing levels and recommend changes if necessary.
- Review use of facilities and recommend changes if necessary.
- Provide an outside perspective on improved efficiency and best management practices.
- Review all facets of school district operations, both educational and non-educational, that have a fiscal impact and recommend changes if necessary.
- Work with the district in a “collaborative and cooperative process” to develop a “holistic” debt reduction plan.
- Meet with local elected officials, the Chamber of Commerce, state lawmakers, Ball State University representatives, Ivy Tech Community College representatives, the Delaware County Coalition for Public Education, the League of Women Voters and others.
- What if the Emergency Management Team cannot resolve the financial crisis?
The Emergency Management Team is optimistic that will not be the case. The DUAB has identified the district as “financially impaired” and allowed six months (essentially a probation period) for progress on a debt reduction plan. In December, the DUAB will review MCS’s progress. If enough has been made, district officials regain control. If not, Muncie will be designated a “distressed unit” and a full state takeover begins.
- How is a State takeover different than this “probation” time?
The DUAB appoints an emergency manager who has near-total control to introduce academic and financial changes, renegotiate teacher contracts and run district schools. In other words, the school board and the superintendent have no official say in decisions made by the emergency manager, who is subject only to informal review by a local advisory board and the DUAB. A school district only emerges from state control when it shows two years of “positive cash flow”.
- Are Gary Schools in a similar situation?
Gary Schools have been affected to a significantly greater degree by many of the same factors – loss of industry, shrinking enrollment, low assessed valuation – and their debt is greater, which is why the State has officially taken over management of the school district.
- Where will the money come from?
There are only two ways to balance a budget – make more and spend less. In this situation, all options are being examined.
In addition to cost-saving measures mentioned in question 2:
- Additional MCS properties could be sold or leased. There has been public discussion of moving to a single middle school.
- Grant monies could be given to the MCS
- Financial gifts could be secured
- Additional cuts to budget items could be made, for example: staff reductions, reductions in benefits, implementing an energy conservation plan, a hiring freeze, increasing class sizes
- “In kind” services from another government entity
- A referendum
- A loan from the Common School Fund
- Financial help from the DUAB
- Legislative action
- How can the community help?
- The community can best help by:
- supporting the difficult decisions that need to be made
- supporting the needs of our schools and students, both financially and through volunteer efforts
- encouraging others to provide whatever support they can
- staying informed through the regular updates that will be provided on this website, as well as through local and social media