SCH Frequently Asked Questions
Hammond Schools are struggling financially right now due to several issues that are complex and not well understood. It is a serious concern for every stakeholder – parents, staff, community members, and students. The entire community will be impacted by decisions that must be made regarding the future of our schools and the financial health of the district. There is an abundance of information being shared from various sources, but much is without context or background, and most of it is incorrect.
The current situation is too important to leave to rumor and innuendo found on social media. Our community must have FACTS to make informed decisions about the School City of Hammond, the cornerstone of our community.
We hope this dynamic document will provide background and detail to promote better understanding of where we are, how we got here and what the future holds. In addition, we encourage you to submit questions regarding any aspect of SCH.
Please understand that we have a legal obligation to protect the privacy of employees and students, so those kinds of questions may be redirected, but not receive a response on the FAQ. Also, there may be information that we are not at liberty to disclose at the time, but we are committed to share what we can when we can.
The Distressed Unit Appeals Board (DUAB) notified SCH in August of 2023 that they had concerns about our financial situation. At that meeting, it was determined that the 2017 Operating Referendum renewal was critical to the district's financial stability. After the referendum defeat in November 2023, DUAB followed up immediately and soon thereafter placed the district on corrective action plan status.
DUAB is a board created under Indiana state statute, IC 6-1.1-20.3, to monitor the financial health of school corporations and other political subdivisions. They recommend corrective action where appropriate. Corrective Action Plan status is also defined in statute, IC 20-19-7-12, and is one of the remedies available to DUAB in addressing school systems’ finances. If DUAB decides that a corrective action plan is necessary for the school corporation, then DUAB shall notify the governing body and the superintendent of the school corporation that the school corporation must develop and submit to the DUAB a corrective action plan for the school corporation within ninety (90) days after the notice is provided.
Pursuant to statute IC 20-19-7-14, a school corporation under Corrective Action Plan status may meet in executive session to discuss all aspects of the corrective action plan, including voting to approve a corrective action plan or modifications.
The operating referendum currently provides over $15 million a year in revenue to the school corporation. While it is true the referendum remains in effect for the 2024 calendar year, if it is not renewed by November 2024, SCH will have to reduce the budget by $15 million before the start of 2025.
· Skyrocketing health insurance costs covered by the district over the last two years. For 2023 medical/Rx costs were 132.3% of expected. In addition, the Collective Bargaining Agreement (CBA) caps the amounts teachers pay for health insurance at $1200 for a single plan and $3600 for a family plan. The cost of premiums has forced the Board to pay significantly more than the amount specified in the CBA. For the 2022-2023 school year, the CBA requires the Board to pay approximately $15 million per year for staff health insurance. However, because the teacher contribution is capped, in practice, the Board is absorbing the remaining, unsustainable cost of the total premium, resulting in an additional expenditure of $5 million for health insurance for the 2023-2024 school year.
· Teachers and staff received an 11.4% base salary increase in December 2021 for a total cost of $7.6 million, and an additional 3.2% base salary increase in November 2022 totaling another $2.4 million.
· The loss of 1,581 students from Fall 2019 to Spring 2024, representing a $12.5 million loss.
DUAB notified us in December 2019 that they were not going to place us on the watch list, but would continue to monitor the school district's finances, as they do for all public school districts. They did not indicate that further cost cutting beyond the closing of Gavit and Clark was necessary at that time.
Yes, the district sent a survey that was available for several weeks to all employees to gather feedback on how they felt the district could save money. Some of the ideas were incorporated into the district plan and many of the ideas were already part of the plan.
Yes. The district anticipated saving close to $10 million with the closures of Miller, Lafayette, Columbia, Gavit and Clark. Please see question 5 for how that money was absorbed by other expenses. Just the loss of student enrollment equals $12.5 million, not to mention the insurance expenditures and the increased personnel costs.
If the district obtains 500 signatures in support of another referendum, they could run another campaign in the fall of 2024. The decision to run another referendum has not been made by the Board of Trustees at this time. Even if the district won a referendum in November 2024, SCH must plan for the loss of funding now and have the cost savings plan implemented before the 2024-25 school year begins.
It is unfortunately a risk that we must take as there are only so many financial levers the district can pull to reduce costs. The school infrastructure in Hammond was built around the largest generation of Americans in history, the Baby Boomers. At its height in the sixties, Hammond had close to 24,000 students. Now we have around 10,600. We must have a footprint that more closely matches the enrollment.
Indiana statute prohibits the sale of underutilized or shuttered school buildings until they have been offered to charter schools or public universities for $1. This is sometimes referred to as the dollar law. School City of Hammond did attempt to sue the state over this matter but were unsuccessful as they found we are a political subdivision under the Indiana Constitution and cannot sue the state.
The greatest expense for any school district is personnel and facilities. Because most operating referendum expenses are personnel related, there is no way to address the gap in finances without a reduction in force.
In the cost containment process, all avenues for cost savings will be explored. The district will advertise some public requests for proposal (RFP) to investigate if proposed cost savings are worthy of consideration.
The board and administration have explored many consolidation options. Once the decision on closing schools is finalized, it will be placed on a board meeting agenda and voted on in a public meeting. The determination process includes examining several factors: building capacities, school locations, walk zones, busing impact, enrollment projections, age of buildings, special programs, necessary improvements, NIPSCO usage, and staffing. The final list of school closings has not yet been determined.
No. When Kelly took over substitute management from Hammond Schools, SCH was only filling 6 out of 10 teacher vacancies, which meant we incurred In Lieu of Sub (ILOS) costs to pay multiple teachers to cover for the absent teachers. Kelly has raised that rate to 9 out of 10 for this year. By increasing the fill rate, we utilize our own teachers (and ILOS) less often, which becomes a cost savings.
No. The tax rate has remained at $0.44 per $100 of assessed value for the entire length of the operating referendum. It is impossible to change the operating referendum rate without another election. Lake County Government collects the taxes, and they will only collect and disburse what was advertised and won in an election. The reason the billed amount has increased over time is because assessed valuations of people’s properties and residences have increased over time.
Though it has not been approved by the board, it is currently the intention to close the administration center at 41 Williams after the 2023-24 school year. Probable locations that have available space are the Welcome Center at Columbia and the ACC.
No, bus transportation for students will continue until at least December 2026. At that time, the board will have to decide if the school system is financially able to continue to offer mass transit bus service. The resolution the board passed can found here: Resolution 2324-9 Transportation.
This is false. Every 2 years, the State Board of Accounts audits the key funds in the district and audits our use of federal funds. The results of these audits are publicly available on their website at https://www.in.gov/sboa/political-subdivisions/counties/audit-reports/ There have been no major findings that would suggest any money has gone missing.
The School City of Hammond received over $60 million in funding from CARES/ESSER/ARP/GEER COVID relief funds. Those funds have been spent for a variety of uses to address the needs of our students, staff, and buildings. IDOE provides an online dashboard at https://www.in.gov/doe/grants/esser-geer-dashboard/ Selecting the “Details” view shows that $21.92 million has been spent on Instruction. This does include stipends paid to teachers as they are our primary instructional investment. They have also supported some of the district’s operational expenses over the past 3 years, but the last of these funds (ARP) ends in September 2024. All expenditures from the COVID relief funds must either end or be transferred to the education or operations fund. SCH has been presenting a quarterly report on COVID expenditures at our regular board meetings.
Negotiations with the Hammond Teachers Federation ended on November 15, 2023 without an agreement in place. According to statute, impasse is declared and mediation is the next step in the process. The administration and the teachers had 2 mediation sessions in December, 2023. Shortly after the 2nd mediation session, the Hammond Teachers Federation took a vote on the proposed contract which failed. They also filed an unfair labor practice which put a stay on the mediation proceedings. Since that time, the lawyers have been in discussion with each other and the representation from the Indiana Education Employment Relations Board (IEERB). Click to view the press release that was issued regarding the Collective Bargaining Update.
One of the key tenets of collective bargaining is that bargaining may only occur between each of the parties’ appointed representatives. Negotiating by trying to win public favor or by attempting to influence those who are not part of the appointed bargaining teams is expressly prohibited and constitutes a bypass. While it can be said that the proposal reflects the seriousness of the current financial situation, SCH cannot publicly comment on any specifics of the proposed collective bargaining agreement.
The Indiana Education Employment Relations Board (IEERB) publishes guidelines for proper and improper bargaining. https://www.in.gov/ieerb/unfair-labor-practices/
SCH eliminated the full-time position of communications director for SCH as a cost-cutting measure, but there remains a great deal of information regarding the current financial status of the district and the impact that will have on the community that must be shared with the community. It is a priority for us to continue to provide timely and accurate information. The most effective way to make sure that happens is by bringing in a public school communications expert for the short term. Mrs. Petraits is a native of the Region and has been both a teacher and communications professional for over 45 years. She recently retired after ten years as executive director of the Indiana School Public Relations Association. She will continue to assist in the short term "as needed".
They did until December 31, 2023, when they voted to eliminate that benefit for themselves.
SCH values our early learning programs PACT and Head Start and the benefits they provide to students. If the board would consolidate buildings, our first priority would be to place students in grades K-6. Our desire would be to continue our current PACT and Head Start programming, but we cannot comment further until a final decision is made on school consolidation.
The easiest way to explain the impact to property taxpayers follows:
1. The “operating” referendum was the renewal of the referendum that passed in 2017. This type of referendum can be used for day-to-day operational costs of the district and can be used to increase teachers’ salaries. Passage of this referendum would have maintained the current $.44 per $100 of net assessed property value, so NO increase would have occurred. The failure of this referendum will result in the loss of $15 million for the district and is part of the reason cuts are being made.
2. The “capital projects” referendum was a new request to fund construction projects. Had it passed it would have resulted in a tax increase. SCH anticipated it would cost the average Hammond homeowner approximately an additional $10 a month.
3. The ballot question was worded as if the ”operating” referendum was not a renewal, so reflected the $.44 per $100 net AV as if it were a new tax increase rather than a continuation. Again, the only increase would have come from the “capital projects” referendum.
For those who are interested in a more detailed explanation, link to various presentations and documents that were used during the referendum HERE.
https://www.youtube.com/watch?v=MJXiAg1iBkU&list=PLYeoqDx9fYWj05VBn09Ji3IAqDCyHiJld&index=19
Operating Referendum Presentation
Hammond School Rate Analysis 0022_OpRenewal
Hammond School Rate Analysis 0287_0
We have provided the data at multiple school board meetings and within this FAQ to explain the severity of the district's financial situation. The loss of funds from various sources requires that the School City of Hammond reduce its expenses (like closing buildings and reducing staff) in order to get the budget back in line.
As far as teachers - there is turnover every year in every district for a variety of reasons. Teaching is a stressful job in general, and many teachers are under a great deal of pressure and scrutiny post-pandemic and in the current political climate. Data from 2022-2023 indicates an average of 23% turnover rate of teachers nationwide.
There have been no reports of any rodent the size of a rat. There are reports of mice, however, which are to be expected when doors are propped open for deliveries and such. The district uses a vendor for rodent control.
An elementary student brought a BB gun resembling a firearm to school. It was confiscated upon the student’s entry because the student bragged about it the day before. Another student did the right thing and reported it to their parents, who reported it to the principal. Because it was never a credible threat as confirmed by the police, didn’t make it into a class, and was never shown to any other students, it was a judgement call not to notify parents of the incident. Our concern was that we would unnecessarily create a worry where there was none. What we have found, however, is by not notifying parents, the facts of the situation were lost in misinformation. Therefore, we have reviewed our notification protocol and will be more proactive in the future.
Contact the particular school or check their website.
A partner of SCH, Josten’s Sales, provides this service. The number to contact them is 574-216-6336. It costs between $35-50 and requires a lead time of 4-6 weeks.
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