Indianapolis Public Schools weathered a deep $10 million dip in state aid last year compared to 2013 but still finished 2014 with a small $4.1 million surplus it put toward savings.

The district had planned for some of that drop in aid, but Superintendent Lewis Ferebee said it still took $5 million in new budget cuts last year to produce a savings. IPS spent $232.5 million last year from its general fund, which pays for day-to-day operating costs like salaries, benefits, learning materials and utilities.

“We’re doing better due diligence in terms of projecting and monitoring our revenue and expenditures,” Ferebee said. “Since this administration came on board last school year, there have been efforts to restructure. We’ve received less funding but we’re also being better stewards of the funding that we receive.”

Part of the reason IPS saw so much less state aid come in last year was because of some extra dollars the district received in 2013, notably a $6 million payback from the state after a court ruled it overcharged the district for the cost of operating four failing schools it took over and turned over to outside operators. But at the same time, the state has been reducing the basic per student state aid amount for high poverty districts for several years, which has meant less money for IPS.

So Ferebee looked internally for cost savings.

He trimmed $1.5 million from the administrative payroll of the central office. Critics have long complained that IPS was overly bureaucratic. Ferebee agreed, saying he saved money but cutting jobs and spreading those duties to other administrators.

After Ferebee presented his year-end financial report to the Indianapolis Public School Board on Tuesday, board members said they want to push even harder to save money, especially because school funding has become a key issue for lawmakers this year and Ferebee has said he is concerned that IPS could see even deeper cuts in state aid going forward.

Since taking over as superintendent in late 2013, Ferebee has pushed IPS to be more open about its financial situation, beginning with his shocking revelation last March that a $30 million budget deficit claimed by prior administrations did not exist. Ferebee said IPS in the past had systematically overestimated its budget. He has since invited independent audits that largely confirmed his findings, fired the district’s prior financial chief and began giving the board more frequent and specific updates on the district’s financial state.

Board member Kelly Bentley, a longtime critic of the district’s financial reporting in a prior stint on the board, said lawmakers setting the state’s next budget should understand that even small reductions in per-student funding make a big difference for districts like IPS. For each student, IPS received $7,058 in tuition support last month, according to IPS. Compare that with $7,209 back in January 2013.

Losing that $150 per student costs IPS about $4.6 million — or nearly equivalent to the district’s entire 2015 budget for school security.

“It’s important to let them know what we’re spending our money on,” Bentley said. “Sometimes it’s difficult for legislators to grasp that $150 (less) per pupil is a significant amount of money.”

IPS Treasurer Paul Carpenter-Wilson said the district is losing money partly because of a change in the way Indiana counts students. Enrollment is counted twice a year now, in September and February, and adjustments are made to raise or lower funding if enrollment grows or falls. In the past, enrollment was only counted once in September. The district’s estimates for how much aid it will receive based on September’s count did not anticipate lost enrollment that was evident in the February count.

Fewer students in February meant a cut in state aid in the following months.

“As the state continues with two (count days) and financial adjustments made for each, we will continue to refine our projections using these new data methods in order to be as accurate as possible,” Carpenter-Wilson said.

More cost savings for IPS are expected this year. IPS administrators said their plans in 2015 include:

    • Selling off vacant former school buildings. IPS plans to lease or sell three former school buildings — School 21, School 78 and School 92 — that all have been vacant for at least six years.  Scott Martin, IPS’s operations director, said the district is losing money by maintaining and securing buildings that aren’t being used. Private groups have expressed interest in buying the former schools and turning them into everything from senior citizen housing to preschool centers, Ferebee said, but charter school groups have so far not shown interest as the buildings need significant repairs.
    • Replacing older buses with new, efficient models. About 40 percent of the district’s fleet of 305 buses are at least 12 years old. IPS transports about a third of its students on those buses and pays Durham School Services nearly $25 million annually to bus the rest. IPS will seek to sell the older buses and buy new ones that use less fuel and have lower maintenance costs.
    • Refinancing bonds. IPS estimates it could save up to $1 million each year — and more than $13 million over the life of the bonds — by refinancing two bonds at lower interest rates.