MUNSTER — The School Town of Munster superintendent says administrators have shrunk the $8 million deficit by a couple of million dollars, but the district is still struggling and likely will need another general fund referendum to boost the operating budget and a construction referendum to repair aging buildings.
As of July 1, the deficit had dropped by $2 million to about $6 million, Superintendent Jeff Hendrix said Monday night at the second of three meetings the district is hosting to talk about finances and facilities. The final meeting will be at 7 p.m. Oct. 17 at Munster High.
Hendrix said all buildings need roof repairs and other renovation work, especially Munster High and Frank Hammond Elementary.
“We need to put the facilities on a rotational maintenance program,” he said. “We will need to have money for that, and it’s not something we can get from our capital projects fund.”
Hendrix said the roof at the high school is a “biggie,” as well as new carpeting, flooring, a new media center and a revamped lecture hall. He said Frank Hammond needs a new HVAC system, carpeting, flooring, library area and more space.
Hendrix emphasized that over the last two years, the district has had several retirements, reduced support staff and eliminated administrative positions, which have saved the district money.
“We have also replaced staff at lower wages. All of the changes have helped reduce our expenditures so that they are now under our revenue,” Hendrix said. “We also have saved monies through energy savings projects and refunded (refinanced) bonds at lower interest rates.”
Hendrix stressed the district is being as transparent as possible about all financial and facilities issues.
Todd Samuelson, a consultant with accounting firm, Umbaugh and Associates, who is working with several districts, said Munster, like others, is facing major challenges: functioning within the tax caps, working with a negative balance, property tax shortfalls as a result of taxpayer appeals and capital projects needs.
The Indiana General Assembly in 2008 passed a law establishing referendums as a new mechanism of school funding, in conjunction with passing property tax caps that same year. Voters approved putting the tax caps into the state constitution two years later.
Since then, most property owners have seen their tax bills either drop dramatically or rise slowly. At the same time, local governments and school districts — with fewer dollars coming in the door — have had to cut back on services and repairs.
Samuelson said a referendum could be on the ballot as early as 2017. The additional referendum levy would raise approximately $5.4 million per year for seven years beginning in 2018.
District leaders said they have not been able to fully benefit from the general fund referendum voters approved in 2013, because that money has been used for other unexpected needs. The district gets an extra $3 million a year for seven years.
While the district lost 50 to 100 students in the 2015-16 school year, it gained about 50 students this school year with a larger kindergarten class, Hendrix said. He said the fall enrollment is just above 3,900 students.
Some parents brought up a special report issued by the Indiana State Board of Accounts in June, which targeted retired Superintendent William Pfister and retired Assistant Superintendent Rchard Sopko, who also was superintendent for two years. The report asked the two to repay $851,000 to the school district. The district reportedly made overpayments of salary and benefits to both, exceeding what was in their contracts.
That special investigatory report was sent to the Indiana attorney general’s office and the Lake County prosecutor. An FBI investigation also is underway. No information is available on whether anyone will be charged.
School Board Vice President Ron Ostojic said board members know they have to rebuild trust among the school families, and have tried to show that in the last couple of years by “protecting the taxpayers’ dollars and reducing the deficit.”
He said board members receive a report at each meeting on the finances.
“We followed the law,” he said. “We saw the irregularities and inconsistencies, and we asked for a special audit in March of 2015. They didn’t come until the end of the year.
“There is a need for the public to see what is needed. The law is set up where a school taxing unit has to come to the public and ask for money. Are they satisfied with the buildings? Are they satisfied with the class sizes? ... They are going to have to let us know what they want. Here’s what we are doing with the tax dollars. I don’t have the