Analysis of West Clark Reorganization Plan
The financial viability of the West Clark School Corporation's reorganization plan is assessed by the DLGF. While Silver Creek is projected to remain stable, concerns arise regarding the impact on Borden-Henryville finances and the reduced revenue for other entities in Clark County. Shared resources and educational opportunities are emphasized, but doubts linger about cost savings due to assumptions about maintaining costs at 2018 levels. Various memos and analyses question the feasibility of cost savings and highlight potential challenges ahead.
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Presentation Transcript
Financial Viability of the Reorganization Plan Based on the DLGF s analysis, Silver Creek is estimated to be relatively stable for 2021 through 2024, if West Clark s financial assumptions are accurate. DLGF s analysis of Borden-Henryville finances concluded that the proposed budgets, rates, and levies are [] estimated to be feasible for [2021 through 2024], as long as expense and revenue fluctuations do not exceed 5%. Shortfalls or increases in revenues or expenditures should also not change this outcome, except Borden-Henryville will have low operating balances in its Operating Fund if its expenses are 5% higher than expected.
Reduced Revenue to Other County Entities Per the DLGF Memo, by operation of law the creation of 2 new school corporations results in those entities receiving a temporary increase in Local Income Tax ( LIT ). As a result, the other units in Clark County will lose a proportional share of LIT revenue: Clark County Unit will lose approximately $89,499 City of Jeffersonville will lose approximately $183,907 Town of Clarksville will lose approximately $82,142
Shared Resources and Educational Opportunities How will the division of West Clark s assets and resources between two new school corporations be more efficient opportunities? West Clark reiterated that the Reorganization Plan approved by the local board included proposed joint efforts between the new school corporations, noting several examples: [T]hrough shared services arrangements, duplication of business office, IT and maintenance staff could be avoided. Availability of career and technical education opportunities should not be impacted if, as anticipated, the new school corporations continue their joint efforts and increase student education West Clark s Reorganization materials state that currently, funds are siphoned off to non-growth areas (Borden and Henryville) to appease animosities within the existing school corporation. This statement notes the inherent challenge in the relationship.
Lack of Cost Savings The DLGF s Memo explained that West Clark assumes general administration costs for each school corporation will stay at 2018 levels from 2020 through 2024 this assumption seems unlikely given that West Clark s costs have grown in the period from 2015 through 2019. The DLGF Memo concluded that it does not appear that West Clark has justified how the reorganization will result in a savings [given] the trend has been that costs have increased[,] [and] West Clark expects facilities costs to decrease after 2020. It is not clear what justifies this expectation. The IDOE s Memo supported the DLGF s analysis, stating, IDOE concurs with DLGF that it would be unusual for each school to maintain level expenditures after a reorganization occurs due to unforeseen costs associated with relocation of administrative and operation staff and implementation of the goals desired by each school corporation.
Student Enrollment Trends for the Proposed Reorganized School Corporations For the 13-14 through the 17-18 school years, the Silver Creek campus experienced positive enrollment trends. However, the IDOE Memo noted that for this time period enrollment trends at Silver Creek reflect a lower number of incoming primary students and a larger number of graduating students, which may indicate a potential decline in enrollment in the future. Declining enrollment may result in lower tuition support funding in the future. For the 13-14 through the 17-18 school years, the Borden campus enrollment declined 13%, and the Henryville campus enrollment dropped 3%. These trends may indicate reduced funding due to decreasing enrollment in future years.
