School board predicts money crunch, weighs ISL option

The Instructional Support Levy provides a funding source for general fund expenditures through property tax, income surtax and a small amount of state aid.

Members of the Le Mars Community Schools (LCS) Board of Education reviewed responses from the DLIIT team on whether the board should pursue the ISL again and their reasons why or why not.

The DLIIT team is comprised of community representatives, staff members, students and administration and provides input on issues pertaining to the school district and students.

LCS superintendent Dr. Todd Wendt said the team held a group discussion at an Oct. 23 meeting and each individual was able to submit written comments and input to the board.

"There's a lot of concern," said board member Patrick Murphy, who is a member of the DLIIT team along with board member Brenda Phelan.

"There seems to be good number of folks who absolutely want us to go after another Instructional Support Levy," Murphy said.

"By the same token, there are some really sharp folks here that filled this out and their position is we have to change it a degree or a dramatic degree," he said of the DLIIT team input.

Comments from team members ranged from strong support for another try at the ISL to some saying the board should hold off in light of the national economy issues.

Some felt the district had done a good job in informing the public, while others felt more specific information was needed pertaining to how the tax would affect individuals.

Another commented there needed to be a cap on the tax levy.

"Unfortunately, it simply makes any decision by you folks on the school board even more difficult," Murphy said of the input.

"There are still folks that want to know what is in jeopardy if we need to make cuts," said board member Dan Smith. "I really think it's a district-wide thing and I think they need to understand that there is no target list."

Several board members felt the public has concerns about the sliding scale of the ISL, even though there is a limit on the amount of money the district can generate with the ISL. The sliding scale refers to the changeable levy percentage the school board can decide on regarding the property tax and income surtax portions of the ISL.

Murphy pointed out even with the allowable growth -- the slight annual increase in state dollars for the district -- the little bit of money will not be nearly enough to cover even the salary increases anticipated for the 2009-10 school year.

"We're in a world of hurt, and I don't care what you say, even if we got 13 new students, we're in a world of hurt for the next fiscal year budget," Murphy continued.

He noted several residents have talked with him about the cash reserve levy.

"They're really nervous about a cash reserve levy. I'm nervous too. I don't like it," Murphy said.

Board president Mark Stelzer said he was struck by the wide range of opinions coming from the DLIIT team and was leaning to changing the ISL to be more specific if it was pursued.

In response to the board's request for information, Wendt presented some preliminary information on revenue and expenditures for the next school year.

"First of all, I give a huge caution on this, because what I'm presenting is based on budgeted numbers," Wendt said.

The other caution he gave was the effect current conditions across the U.S. and Iowa which show a smaller projected growth in revenues.

"And remember, what the (Iowa) legislature giveth the legislature can taketh away," Wendt said, referring to the 4 percent allowable growth passed in the last legislative session for the 2009-10 school year.

"They can come in session in January and knock that number down, or they can come in and do an across-the-board cut for this year's spending," Wendt said.

An across-the-board cut occurred several years ago and school districts scrambled to adjust that current year budget with less state funding.

Wendt based his projections on a 4 percent allowable growth and an increase in LCS enrollment of 12.1 students (a minor adjustment was made following his report of a 13.1 student increase in October). The district's new money would be $554,596.

Wendt said several assumptions are made, including all current revenue streams will be funded next year, valuations remain constant and the district's levy remains constant at the $12.70 level.

That would mean the 2008-09 budgeted revenue would be at $17,376,800. Adding the new money to that figure, theoretically next year's budget would have $17,931,396.

Wendt continued that a 3 percent increase in expenditures (for all costs, not just salary and benefits) for 2009-10 would leave a positive balance of $33,292.

A 4 percent increase would leave a deficit of $104,476, and a 5 percent increase in expenditures would leave a $314,244 deficit.

"That gives you a good general picture that $550,000 in new money doesn't automatically mean that you're not going to have to have some kind of budget reduction or increase in revenue," Wendt said.

Murphy pointed out that the allowable growth amount would barely fund potential salary increases and would not be able to cover the purchase of new textbooks. (The board cut new textbook purchases from the 2008-09 budget for one year.)

"You don't recover in one year from the loss of 110 students, or 80 students," Wendt said in reference to the enrollment decline over the past two years.

Wendt reminded the board that if it wishes to start the process to implement the ISL, it would need to begin in December.

"By the second board meeting in November you will have to have that conversation and provide me with direction as to whether or not I need to prepare a resolution for that first (board) meeting in December," Wendt told the board.

"You will have to come together collectively as a group and make some decisions about whether or not you're going to pursue it," Wendt said.

Wendt said he planned to talk with building principals about potential areas for reducing expenditures.

The board has tried to pass the ISL by resolution twice. Both times district patrons petitioned for an election where the resolution was defeated. The March vote was 1,282 yes votes and 1,708 no votes.

In September, there were 1,882 yes votes and 1,935 no votes on the measure.