Presentation on theme: "1 Denver Community School District Denver, Iowa Kathy Enslin – Superintendent of Schools – 15 years Supt. experience Craig Lohmann, Board President – 7."— Presentation transcript:
1 Denver Community School District Denver, Iowa Kathy Enslin – Superintendent of Schools – 15 years Supt. experience Craig Lohmann, Board President – 7 years board experience Kerri Wilson, Board Vice President – 6 years board experience Carter J. Stevens Board member – 13 years board experience Dale Schneider, Board member – 6 years board experience Ken Kuennen, Board member – 7 years board experience FinancialPlanning in a Small District: What is Sacred? What can be Sacrificed? What needs to Be Considered? IASB State Convention November 2010
2 OBJECTIVE OF THIS SESSION Basic Information on School Finance Goals and Principles Basic History of School Finance Financial Indicators to watch Identifying Areas of Expenditures Basic Information on Denver Budget ◦Cash Reserves ◦Staff reduction ◦One time monies (ARRA stimulus) ◦Building with Revenue Bonds
3 School Finance Goals and Principles
4 Equity in Expenditure Property Tax Relief Equalize Taxation Uniform State Aid Allocation Formula Predictable Simple Pupil Driven
5 Provide for Local Discretion Establish Maximum Spending Control One Funding Formula (AEA + K-12) Provide Adequate Funding Promote High Achievement Modify the Impact of Community and Family Background on Achievement Goals and Principles
6 History of School Finance in Iowa
7 Brief History of School Finance in Iowa In ,652 school districts Reorganization Plan adopted in 1950’s Currently 361 school districts
8 Brief History of School Finance in Iowa Until the mid 1960’s –school district funding was all property tax In 1971, school foundation program adopted (enrollment based) –substantial increase in State aid to school districts
9 Brief History of School Finance in Iowa (continued) In 1992, allowable growth adopted In 1996, increased Regular Program Foundation Level from 83.0% to 87.5% beginning in FY 1997 (increased the portion of State aid paid from the State General Fund and provided property tax relief)
10 Brief History of School Finance in Iowa (continued) In 2001, eliminated the 100.0% budget guarantee and replaced it with phase-out or alternate budget adjustment to begin in FY Made the on-time funding provision permanent
11 Brief History of School Finance in Iowa (continued) State Sales/Use Tax for school infrastructure - excess funds after school infrastructure allocations will be used for property tax relief through school aid formula State Categorical –Additional categorical program funding rolled into the school aid formula beginning in
12 Brief History of School Finance in Iowa (continued) 2009 Legislative Session: Across-the- Board Reduction of 1.5% for FY % Across-the-Board Reduction October 2009 ◦American Recovery and Reinvestment Act (ARRA) Education Fiscal Stabilization:$40.0 million in FY 2009 Established 2.0% allowable growth rate for FY 2011
13 Financial Indicators to Watch Unspent Balance Spending Authority Cash Balance State Funding Formula Enrollment Patterns
Understanding Spending Authority Each child has a “credit card limit” on spending. Each year “Credit Card Limit” is paid through a combination of State Foundation Aid and local property taxes (cash). Unspent Balance (Unspent Budget Authority) simply is the unused credit card limit for all of the children who have ever attended school in the district.
16 Cash rarely equals Authority The goal is to have cash and authority equal.
17 Why is Spending Authority So Important? ?
18 It is the legal spending limit for the district!
19 This is not the same as Cash Balance. This is not the fund balance. It is illegal for districts to overspend their Allowable Spending Authority.
20 Understanding Spending Authority is more important than ever!
21 Foundation Formula Additional Levy State Aid Uniform Levy $5.40 per $1000 Valuation Foundation Formula Levy FY2010: 87.5% of State Cost ($5,768) =$5,047 per pupil
23 This would eliminate per pupil student funding equity in the finance formula - the main stated goal of the formula. Property poor districts would be able to generate very little spending with very high tax rates.
24 What is the Value of Spending Authority? Spending Authority is especially important when the state is unable to fulfill its obligations.
25 In Across the Board Cuts… When the state has to reduce its expenditures mid-year through an Across the Board (ATB) cut, cash to school districts is reduced, but not Spending Authority.
26 Cash is impacted But Credit Remains Virtually all of a district's spending is obligated, so in the case of an ATB cut, the reduction impacts a district's bank balance, but does not impact their Spending Authority.
27 Identifying Areas of Expenditures Energy Facility Physical Plant and Equipment Transportation Staffing Curriculum and Supplies
28 What is Sacred? What can be Sacrificed? What needs to be Considered?
29 Reduction Areas to be Considered Staff (Sacred? Sacrificed? Considered?) Class size (Sacred? Sacrificed? Considered?) Energy (Sacred? Sacrificed? Considered?) Transportation Technology Curriculum Extra-Curricular Administration Sharing Opportunities
30 Energy – What are the room temperatures? Are lights being turned off? Is there a better building arrangement/ structure? Do windows, boilers, roofing, insulation need replacing? Transportation- Can we consolidate routes? Can we share team buses? Can we schedule activities more efficiently? Field Trips? Professional Development Travel? Staffing-What are our pupil : teacher ratios? How big are we willing to go with class sizes? Can we reduce in any area? Will negotiations committee work with us? Can we alter benefits? (insurance, TSA, extended contracts? What are our Administrative Costs? Professional Development Costs? Curriculum – Can we postpone the curriculum cycle? Do we have classes with low numbers?
31 SOLVENCY RATIO SACRED? SACRIFICED? CONSIDERED?
32 Solvency Ratio (Cash Balance) by District Size Solvency Ratio (Cash Balance) by District Size SmallMediumLarge Minimum0% Average15%10%5% Maximum40%25%15%
33 Enrollment Patterns Are you gaining in enrollment? Are you losing in enrollment? Is your enrollment stable? What are your Enrollment patterns?
34 Certified Enrollment Certified Enrollment provides twokey pieces of information. ◦ Enrollment served (not headcount) ◦ Teacher FTE’s Divide enrollment served by FTE’sand you end up with a de-factoclass size measure.
36 Key Measures Total number of staff Average Pay Students per Staff Payroll per Student
38 STAFFING DECISIONS are critical to school districts because once the year is started, there is very little ability to reduce expenditures. Schools are required to provide contracts to certified staff by April 30 of the year prior to the budget year they are planning. Districts may not reduce or eliminate these contracted staff mid-year.
39 Variables in Data Enrollment served Full-time Staff Part-time Staff Total Number of Staff Full-time pay Part-time pay Total Licensed Staff Students per Licensed Staff Percent of Staff Part-time Total Licensed Payroll Payroll per Student
40 Conclusions for Staffing Trends You may be surprised that your most expensive staff may be at your elementary level Massive differences in Class size expectations between districts
41 Are We Missing Something? Are all programs equal? elementary, middle and high school
42 Energy Costs Energy Costs
43 Other Things to Consider… Transportation costs
44 Curriculum/Technology Costs
45 Extra-Curricular Costs
46 Administrative Costs
47 Sharing Options/Incentives
48 How Did Denver Schools Meet the Shortfall? RAISED TAXES $1.00 /$1, Levied Cash Reserve Budget Guarantee due to loss in enrollment Levied for special education deficit Levied for on-time funding (open enrollment/new to district) Levied for At-Risk Allowable Growth Cut expenditures (energy, transportation, curriculum, staff) Froze administrative salaries Building addition with Revenue Bonds to reduce future costs l
50 Cash Reserve Levy
51 Staff Reductions -16% Reduced 1-full-time music position Reduced 1-full-time K-8 guidance position Shared business education with neighboring district Shared FFA with neighboring district Did not replaced teachers who left ◦2 positions Offered Early Retirement Incentive ◦4 staff members
52 Summary and Review Understand your District Know what is Sacred Know what can be Sacrificed Know what needs to be Considered
53 Develop a Clear Understanding of Your Budget
54 Thank you for attending our session today! Kathy Enslin, Superintendent Denver Community School District 520 Lincoln Street Denver, IA