The Cherokee Community School District Board of Education unanimously approved the 2009-2010 Fiscal Year budget Monday night, carrying a Total Spending Authority (TSA) of $10,871,834.
The approved budget establishes a levy rate of $14.34 per $1,000 of property tax valuation, compared to the last fiscal year's $14.61 levy, which is down 27-cents per $1,000. The FY 2009-2010 Property Tax Levy totals $2,976,217.
According to Cherokee Superintendent Dr. John Chalstrom, the new budget's levy rate is among the lowest ever in the District, as current and past boards and administrators have sustained focus on dealing with expenditures and revenues on a yearly basis. For many years in the distant past, the levy rate was in the $16-$17 range, according to Chalstrom.
The $10,871,834 TSA was arrived at by totaling the Combined District Cost of $8,171,146; Prior Year's Unspent Balance of $1,493,294; Instructional Support $201,658; Pre-School Foundation Aid $155,736; and Miscellaneous Income $850,000.
The TSA limits the money the District can spend, rules overspending a violation of state law, and identifies unspent balance as unused TSA that is not cash.
Chalstrom lauded the Board, and past boards and administrators, for being diligent and good stewards of the District's finances despite dwindling enrollments and less State aid monies because of such shrinking enrollments. The state's 1.5-percent cut across the board in December, 2008, was another jolt for all Iowa School Districts, said Chalstrom.
"I don't expect such inflationary issues affecting the budget as last year," advised Chalstrom regarding last year's exorbitant fuel, utility, and food costs foisted on all School Districts.
The Combined District Cost is determined by a State formula from the Iowa Department of Management, and weighted enrollment times the District cost per pupil as determined by the State.
Miscellaneous Income is from Federal, State, and local sources. Examples would be General Fund revenue, Federal and Phase monies, transportation reimbursement, State grants, student fees, open enrollment and tuition, and interest.
After his power point presentation explaining the budget and its process to the Board, Chalstrom said he was confident that any anticipated reductions necessary for the District to stay within its budget in the future will probably be handled by attrition, rather than any staff or faculty cuts.
However, he cautioned that for the next two years, the District faces declining enrollment projections of 25-30 students per year. Currently the District's enrollment count is 1,000 students K-12.
Chalstrom said all Iowa School Districts are currently waiting word from the Department of Education regarding the Government's proposed stimulus package to benefit education across the country.
Among the possibilities are the current 4-percent Allowable Growth funded at either 4-percent or 2-percent, a 2-percent AG for FY 2010-2011 funded at 2-percent or 0-percent, or a continuation of a 4-percent AG funded at 4-percent or 2-percent.
"It all depends upon the stimulus package," advised Chalstrom.
The Cherokee District is fortunate in that its Debt Service continues to be paid down by the 1-cent Local Option Sales Tax (LOST), so the Debt Service shows zero in the budget and doesn't negatively impact the TSA. No longer formula driven after this school year, LOST becomes a state-wide penny tax next year.
Of the District's TSA, the State controls Combined District Cost; the voters control the 3-year ISP levy, voter PPEL funds, and debt; and the Board controls cash reserve levy, regular PPEL funds, dropout, and management levy.
In summary, Chalstrom pointed out that the "break even" bottom line for the District's new budget totals $9,378,540 before the District would have to tap into the Prior Year's Unspent Balance monies of $1,493,294. Together those two figures equal the FY 2009-2010 TSA.
Although none are anticipated, unforeseen, major expenses, or an infrastructure calamity could possibly create such a situation that would threaten the Unspent Balance, which wisely is sustained year after year to cover exactly that.