LCS board crunches numbers for 2009-10

At the Nov. 24 board meeting, Superintendent Dr. Todd Wendt gave the board information on preliminary fiscal year (FY) 2010 budget information. He also outlined various options for the board to consider as they decide whether to pursue the ISL for the next budget year.

Wendt based his calculations on fiscal year 2009 figures and four assumptions:

* FY09 Projected General Fund Revenues are fully realized.

* The school district will receive basically the same amount of revenue from other sources in addition to the Regular Program District Cost in FY10 as is projected for FY09.

* The total tax valuation for FY10 remains at least at the FY09 level of $471,051,702.

* The FY10 tax rate for the general fund remains at the FY09 rate of $12.70

The FY09 regular program district costs (including Budget Guarantee funds) is $12,199,499.

Using the 4 percent allowable growth in state funds as passed by the Iowa Legislature for FY2010, the per pupil income will be $5,768, an increase of $222 from FY09.

This generates $12,665,951 in FY2010 regular program district cost based on the certified enrollment of 2,195.9 students.

That would result in FY10 new money of $466,452.

Adding the FY10 new money to the FY 09 total projected general fund revenues of $17,376,800, results in FY 10 total projected general fund revenues of $17,843,352.

Wendt cautioned the board about changes in state funding.

"The Legislature could come into session in January and could change that number (4 percent allowable growth)," he said. "And even worse, the Legislature could have an across-the-board cut in this fiscal year."

Wendt added his conversations with other superintendents at the Iowa Association of School Boards' State Convention in Des Moines Nov. 20 and 21 "make me nervous about what could possibly happen."

With that potential new money, Wendt projected the general fund expenditures with a 3, 4 and 5 percent increase in expenses as follows:

* FY 09 General Fund Expenditures - $17,376,800 - balanced budget

* FY10 General Fund Expenditures - 3 percent increase - $17,898,104 - $54,852 deficit

* FY10 General Fund Expenditures - 4 percent increase - $18,071,872 - $228,620 deficit

* FY 10 General Fund Expenditures - 5 percent increase - $18,245,6450 - $402,388 deficit

"When I talk about those increases, I'm talking about all expenditures, not just salary," Wendt noted. Salary and benefits for LCS district employees makes up about 82 percent of the general fund budget according to Wendt.

He went on to say the increase does not take into account the $65,000 cut in textbook purchases which were put on hold for one year; the T&I Booster Club and WIT partnership which fund $13,500 for an adjunct professor in welding; or the $18,000 in turnover dollars used to balance last year's budget.

"Add that total of $96,500 that has to be put into next year's budget and that digs the hole deeper," Wendt said.

Wendt then explained the third piece of information requested by the board, that of Instructional Support Levy options.

Again, the information is based on FY09 figures:

* Property tax valuation of $471,051,708

* District income tax paid of $10,434,675

* Regular program district cost of $12,199,499

50/50 Mix of Property Tax and Income Surtax

10% of Regular Program District Cost

5% of Regular Program District Cost

% of Regular Program District Cost

All Property Tax

10% of Regular Program District Cost

5% of Regular Program District Cost

1% of Regular Program District Cost

2% Income Surtax Fixed

10% of Regular Program District Cost

5% of Regular Program District Cost

1% of Regular Program District Cost

The chart shows three potential ways for the district to use the ISL to raise revenue. The percentages used, 10 percent, 5 percent and 1 percent, the percentage of the regular program district cost (FY 09 was $12,199,499) which is calculated by multiplying the school district enrollment by the state cost per pupil.

The first part of the chart labeled "50/50 Mix of Property Tax and Income Surtax," reflects the mix of property tax and income surtax the board was seeking in the first two ISL resolutions, which were defeated by votes in March and September.

"In the previous two times, the board wanted to maintain the flexibility to adjust that rate up or down," Wendt said.

The chart shows the amount of property tax at askings of 10 percent, 5 percent and 1 percent of regular district program costs.

The second chart, "All Property Tax," puts all the tax burden on the property tax payer, according to Wendt.

The third chart, "2 Percent Income Surtax Fixed" shows a fixed income surtax percentage, rather than a flexible one, meaning it would generate the same amount of money whether the property tax asking was one percent or 10 percent.

"One of the things we heard about the income surtax (in the two elections), even though it was not ever possible to happen in this district, was to have a 20 percent income surtax because the law says we can go to 20 percent," Wendt said. "Our economic conditions in this community don't allow us to do that."

Wendt further explained the charts allow taxpayers the ability to figure what their additional property tax or income surtax would be.

For example, if the district asked for 3 percent of regular program district cost, the taxpayer would multiply the 1 percent information by three to get the tax at 3 percent.

Board members again discussed the options of using the Cash Reserve Levy, which is a property tax and can be put in place by board resolution with no vote by the public, or pursuing the Instructional Support Levy.

A Cash Reserve Levy pulls down the districts unspent authority balance, and board members say they could consider a Cash Reserve Levy only as a short-term solution to help the budget.

Board members agreed that the idea of flexibility with the tax rates was not something taxpayers wanted.

"There is the fear that it (the rate) could go up, and taxpayers don't want an unpredictable amount," said board president Mark Stelzer. "We need to keep being judicious as possible."

"I would go 5-6 percent on the five-year resolution," Stelzer said. "That way they can calculate exactly what they would pay."

Other board members expressed their feelings to also hold the tax asking at five percent.

The board directed Wendt to draft a resolution to pursue the Instructional Support Levy with a limit of 5 percent of regular program costs and a 2 percent fixed income surtax rate to be reviewed at its Dec. 8 meeting.