Based on the recommendation of Superintendent Dr. John Chalstrom, the Cherokee School District will make mid-year reductions totaling $129,200 in an effort to counter a portion of Iowa Governor Chet Culver's 10-percent across-the-board (ATB) State budget cuts that ended up costing the Cherokee District $492,000 less state aid revenue.
According to Chalstrom, the mid-year reductions of $129,200 will subtract from the $492,000 hit from the State-level budget cuts, leaving the District with the need to draw $362,800 from its $900,000 cash reserve fund.
"It is particularly difficult for school districts to absorb such a loss mid-year," noted Chalstrom in correspondence Tuesday to the faculty and Board of Education.
"Budgets have been set, collective bargaining agreements are in place, and the majority of purchases, (i.e. textbooks, technology, curriculum), have already been made. When faced with a reduction of this magnitude, school districts have few options to cope with the loss of revenue other than using cash reserves."
Chalstrom said in the coming budget year (FY 2011), the District will use its spending authority to implement a cash reserve levy to help replenish the expended cash reserves.
Of those $129,200 in mid-year reductions, $30,000 will come from not replacing a custodial vacancy, $15,000 in other personnel savings, $78,000 in ARRA Funds (Federal stimulus monies) now to be applied to the General Fund, $1,200 by not attending the School Administrators of Iowa (SAI) State Convention, $2,000 in not attending the American Association of School Administrators (AASA) National Convention, and $3,000 in not installing a proposed e-mail server.
In addition, Chalstrom said the District will closely monitor overtime hours and any purchase requests, and begin examining energy conservation efficiencies.
"In looking ahead to next year, I would like to present optimistic budget news," noted Chalstrom. "The reality however, is that the next budget year will be an extremely painful one for Iowa school districts. Allowable growth, (the annual dollar amount based on legislation which is added to each school district's cost per pupil to provide additional funding), has been set at 2%. Yet, as State tax revenues continue to plummet, there is a great deal of speculation that the allowable growth of 2% for FY11 will be rescinded and no allowable growth will be given to Iowa schools.
"Besides a loss of funding, this will also result in a loss of spending authority. The economic downturn experienced in our nation is coming at a most inopportune time for many school districts. As the state phases out the budget guarantee, allowable growth becomes stagnant, and enrollment continues to decline for an estimated 80% of all school districts, the conditions exist in Iowa for a financial 'perfect storm.'
"In short, most districts, including Cherokee, will need to institute further reductions in spending that may affect programming and compromise the ability to offer competitive salary and benefit increases. This situation will only improve when a period of declining enrollment comes to an end, tax revenues at the State level increase, and when allowable growth is sufficient to provide for inflationary pressures within school budgets."
Through it all, the Cherokee Superintendent said the District will work hard to avoid impacting education instruction for the students, while implementing the various budget cuts and reductions.
Chalstrom also said the good news is that the Cherokee District has an admirable history of sound financial management from past and current school boards and administrations that better help it weather such economic storms.
In other business at Monday night's Board of Education Management Team Meeting, the Board heard an overview of the 2008-09 Annual Progress Report from Beth Ebert, Director of Curriculum, Instruction, and Assessment.
That report contains data regarding the performance of Cherokee students that not only shows how they are performing, but more importantly, serves as a benchmark for the District's future goals.