Home District Information Administration Superintendent Articles From The Desk of Mr. Dicks - March 2016
From The Desk of Mr. Dicks - March 2016 PDF Print E-mail

District Budget

 

I have been optimistically waiting for the Legislature to set State Supplemental Aid(SSA) and on March 22nd, the House and Senate agreed to 2.25% funding for schools. So, my “optimistic” waiting will continue. This funding rate affects our Unspent Balance, that can be likened to our credit card. Schools can only spend as much “legal authority” as we have. This is not cash, but only the authority to spend. You can have $1,000,000 in the bank, but if you only have the authority to spend $700,000, you can only legally spend $700,000.

 

I will do my best to help our supportive tax paying community to understand how this affects our district's’ budget and tax asking. First, our enrollment decline of 53 students will naturally make our tax rate go up, so low SSA coupled with enrollment decline, makes the local property tax rate increase. Second, other factors included in our tax rate are cash reserve levy, management fund levy, legislated commercial property tax relief, and the bond for the Stewart Preschool/Daycare addition.

 

The management levy will help pay for our incentivized early retirement packages, but I will remind you, it is one of the only tools we have to move higher salaried teachers/administrators off of our salary scale and replace with less costly teachers. The incentive is paid out of management and the savings are realized in our general fund, our most important. Through FY2011 - FY2017 SSA has been set at 2%, 0%, 2%, 2% + 2% one time funding, 4%, 1.25% and 2.25% respectively. The average on those 7 years is 2.07%. We are bound by Iowa Code to collectively bargain with our teaching and support unions respectively, and would be bound by arbitration if an agreement is not met. I choose to settle, rather than occupy time and emotions, when our unions have come in reasonable.

We are choosing not to levy any additional cash through the cash reserve levy. We currently carry more cash than we have the authority to spend, and still enough to pay our summer payrolls, thus allowing us to cash flow without borrowing. We will continue to monitor this and adjust accordingly.

 

The Stewart project, approved by voters June 30th, will increase our tax rate by $.41 per 1000. This will be a wonderful project and is a great investment by our patrons.

 

So our total tax rate be will be increasing $1.35 per 1000 to $15.85 due to declining enrollment, low SSA, early retirement, and our new bond. The good news is we sold the Stewart bonds recently and the interest was 2.05%. The district has also done a good job in lowering the tax rate the past couple of years during stable and growing enrollment, so this rate is an adjustment to those efforts. Our rate of $15.85 will be lower than the FY2011 rate of $17.46. It is always my goal to maintain or lower a tax rate, but with 2 years of low SSA and declining enrollment(76 kids last 2 years), that was not possible.

 

Because of so many moving pieces involved in the district tax rate, it is very confusing. If you have questions, don’t hesitate to contact me.

 

Superintendent Sharing

 

As was announced, Washington CSD board of directors approved some operational sharing positions at its March board meeting. Operational Sharing is a state incentivized program that encourages districts to share approved functions to increase efficiency.

 

So why does Washington want to share a superintendent? In a word, “proactive”. In the funding environment that we are in, where State Supplemental Aid(SSA) is averaging less than 2% the last 5 years, and our settlements with labor have averaged 3.92%, a person can see that this math isn’t sustainable for a long period. In addition, if you hit a time when enrollment is decreasing, the actual “new money” that is averaging less than 2%, is actually a net loss in new money. As a reminder, the last two years, we have lost 76 students in our certified enrollment. Those 76 kids equate to nearly $500,000 per year in lost revenue. And that compounds itself each and every year that our enrollment remains low.

 

So back to the question, why would we share a superintendent? As has been publicized, due to the 76 student decrease the last 2 years, and the low funding, the district is trying to trim nearly $1.1. Million from our budget. Our first step was offering early retirement, that we are hopeful that will generate $800,000 in cost savings, partially because we hire less costly teachers and some attrition.

 

When the WACO board approached us in a very proactive manner, the Washington board of Education also had an open mind due to needing to realize additional cost savings. I have been very impressed in my conversations with the WACO board as well as the cooperation of the Washington board.

 

The operational sharing money is a definite incentive for each district, allowing each to collect in excess of $51,500 each. In addition, WACO will share in 30% of salary, benefits, and insurance, increasing the total incentive and savings to an approximate $117,000. I have been so impressed with our entire staff sending me ideas on cost savings as well as their willingness to do more. I have been a shared superintendent before and the key is the people you work with. I could not ask for two better board’s to work with, so I expect this to be a positive experience for each district.

 

I stressed with our Legislatures on March 19th, to keep their support for the operational sharing incentives a priority, as they are due to expire in 3 more years, because this is a way to help all schools while not affecting the classroom. I look forward to the challenge in leading both WACO and Washington in the coming year.

 

Auditorium Update

 

The auditorium is progressing very well. Completion is being touted for September, but we are optimistic that it may be sooner. The deciding factors will be the timeliness of all subcontractors to perform their work in a orderly fashion. If one trade doesn’t perform, it many times throws other trades into a holding pattern, thus throwing the schedule off. As I see the progress move forward, it will be very exciting for the public to see the finished product.

 

Last Updated on Monday, March 28 2016 10:21
 
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