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School Board Stories

  

Overcoming Financial Uncertainty: Three Iowa districts prove it can be done

By Summer Evans

No school leader looks forward to a budget crisis, although that is precisely what many districts now face, following the 10 percent across-the-board (ATB) cut announced this fall. While it can be daunting, there are ways to manage budget cuts. Three Iowa school districts have recently overcome financial difficulties: Ballard, Boone and Washington. They offer practical advice, and proof that it is possible to overcome financial uncertainty.

Ballard: Keeping priority staff
The Ballard Community School District has grown to the point that it became challenging to keep up with needs without on-time funding. As a result, the district accumulated a negative solvency ratio. To bounce back, the board and administration worked together to discuss finances with all staff. They made people aware of the situation and formed a long-term plan to annually keep pace with needs while slowly increasing the undesignated/unreserved fund balance. The hard-working board/superintendent team was able to correct this problem while still keeping special education and ELP staff.

"The district made specific priorities and one is to grow staff that is needed, prudent and that aligns with the Ballard vision of ‘empowering all learners,’" said Jean Saveraid, school board president. "The district looked to areas of discretionary spending that might have fallen under the ‘nice to have’ category and made sure the staff always thought in the ‘need to have’ category.

By eliminating some discretionary spending, we are able to add staff to keep up with increased enrollment."

Saveraid said that while overcoming the negative solvency ratio wasn’t easy, there are some tips that would have helped at the time.

"Be open and honest. Work with all staff to help outline spending priorities and areas for more efficiency and savings," she said. "Meet the challenge head-on. Let all staff and patrons know that working toward and maintaining a sound fiscal footing will most likely be difficult, but with everyone rowing in the same direction, we will get there."

The Ballard board members and superintendent will take their own advice as they face the state’s 10 percent cut. Saveraid said they’re asking staff to identify priority areas and offer suggestions on where to make cuts. They’re keeping student learning as the main focus, and they have a multi-year plan in the works to achieve spending reductions.

Boone: Targeting reductions
In recent years, the Boone Community School District faced a number of financial challenges. Like many districts, Boone sees very little "new money" each year due to declining enrollment and low levels of allowable growth. Because of this, the board and superintendent needed to cut costs. They began by cutting teaching, coaching, support staff and administrative positions. They tried to target reductions that would have the least impact on student achievement. But the saving strategy didn’t stop there.

"One of the issues we recognized a number of years ago was that inefficiencies relating to our facilities were creating a significant drag on our operational budget," said Dr. Jeffrey Anderson, board president. "Working closely with our community, we developed a plan that utilized sales tax and PPEL revenues to fund additions to several of our newer buildings which enabled us to then close three older, less efficient buildings."

Anderson said that not only does the district now experience recurring savings in the general fund budget due to facility changes, but leaders also have seen an increase in teacher collaboration. He offers simple advice to other fiscally-strapped districts.

"Taking a look to see if there are expenditures you are making from the general fund that could come from sources that don’t eat into your spending authority is always good," Anderson said.

The Boone district was eligible for $600,000 more per year in "at risk" spending authority than leaders had previously requested. There may also be expenditures districts pay out of their general fund that could be legally paid for out of the Physical Plant and Equipment Levy (PPEL), sales tax revenue or the Management Fund.

Boone will make up its portion of the ATB cut (nearly $1 million) by tapping into cash reserves. The district has built up reserves through levying for some amount of cash reserve every year, and they levied for even more in the spring this year "just in case."

Washington: Reversing a trend
When superintendent Dave Sextro started his work at the Washington Community School District, he peered back at audits and CARs from previous years, paying close attention to income and expenses. The district’s solvency ratio had slipped from 8.22 in 2000 to -5.6 in 2008. Sextro immediately sought outside finance experts, including those at IASB and his local AEA.

"I utilized a third party not only to make sure my numbers were right, but also to meet with the school board to (assure) them of the findings," Sextro said. "We then laid it all out in a community meeting."

Staff were asked to give input, and Sextro said he received signed statements, e-mails and anonymous notes about ideas to save. He and the administrative team analyzed the amount they needed to cut, considered alternatives and took possible solutions to the board.

District leaders decided to:

  • offer early retirement to seven staff members and only replace four of those positions. ($200,000 savings)
  • cut the custodial staff from 16 to 12. ($200,000 savings)
  • contract lawn services out. ($75,000 savings)

"There’s always going to be agony when people lose jobs," Sextro said. "But the fact that we were very transparent with the community was very helpful to get through it."

Following this tough time, Sextro said the board decided to raise taxes in the community at a $1.57/$1,000 level over five years. Now that even more cuts are looming, he said this was a blessing in disguise.

"If we had any luck at all with having to cut more than $850,000 this year, it was the fact that we’d already raised taxes to help the general fund," Sextro said. "That makes it palatable. We’ll be set back a year, but that’s okay."

Sextro added that Washington is on the right track now to be a solvent district. The State Penny funds are even making it possible for a new geothermal high school to be built. Construction is set to begin this summer and Sextro said the utility costs will be dramatically lower than those at the 1912 building currently housing high school students.