Board restricts superintendent auto-renewal clause amid warnings of budget deficit

Karen Scalp, assistant superintendent of business and finance, presented the district’s April financial report and a cash-flow forecast that showed a projected year-end deficit the district is working to close. Scalp said the district temporarily borrowed from its rainy-day fund to preserve cash and is pursuing budget reductions, including cuts to contract services and supplies, while monitoring statutory constraints such as the education-to-operations transfer outlined in state code.

Scalp explained the statutory transfer (IC 20-40-2-6) moves certain central-office and operational costs from the education fund into the operations fund and noted there is a 15% threshold that can trigger a review by the distressed unit appeals board if exceeded. Using the district’s projected student-count revenue (estimated roughly $40 million), Scalp said 15% would equal about $6 million and noted the district was projecting transfers in the 5.2–5.4% range and monitoring to avoid exceeding the statutory threshold.

After the finance presentation trustees moved through action items addressing cost pressures. In a recorded motion, member El Oriaga asked that the automatic extension clause in Dr. Wright’s contract not be permitted to operate for calendar year 2026; the motion passed 7–0. Trustees framed the action as a cost-control and governance step while the district pursues broader reductions.

Board members asked administrators to continue analyzing options, including a utility audit and further operational efficiencies, and to report back as budget-reduction plans are finalized. The finance report and board direction set immediate priorities for the district’s upcoming budget work.

What’s next: Administrators will continue cash-flow monitoring, finalize reduction recommendations, and update the board; trustees requested follow-up on transfer calculations and the effect of Senate Bill 1 on levies and circuit-breaker estimates.