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District finance chief warns of possible $6 million operations shortfall tied to state "circuit breaker" changes
Summary
Daniel Bolton briefed the School City of Hammond board that the district could draw down roughly $6 million from its operations fund this year because of projected state "circuit breaker" revenue impacts, while the education fund showed a modest February increase; trustees asked clarifying questions and accepted the report.
Daniel Bolton presented the School City of Hammond’s financial update through February 2026, telling the board the education fund rose from $24.3 million on Jan. 31 to $25.3 million on Feb. 28, while the operations fund moved from $19.1 million toward roughly $18 million.
Bolton said Title I operates on a reimbursement basis and noted a negative Title I balance of about $200,000 that the district expects to recover when state reimbursements arrive. He reviewed month-by-month cash flows and said the operations fund’s revenue is property-tax driven and therefore concentrated in June and December.
“The red box is the fund surplus deficit in 2026 — we are projecting a $6 million loss to the operations fund,” Bolton said, attributing most of the projected shortfall to state legislative action and the staggered impact of the state’s property-tax “circuit breaker” program on local revenue.
Bolton showed a worst-case projection in which the district would draw down roughly $6.2 million from an opening operations balance of about $21 million, leaving roughly $14.6 million by year-end. He described the figure as an illustrative worst-case that will be updated when actual circuit-breaker adjustments from the state are known next month.
Trustees asked technical questions about month-to-month spending percentages and cash-flow timing. Bolton said the operations fund had spent about 17 percent of its budget through February and that some funds (debt service, Title programs) follow different seasonal spending and reimbursement patterns.
Board members did not take formal fiscal action at the meeting; Bolton said the district will incorporate actual state circuit-breaker numbers when they are published and return with updated projections if necessary.
