The Cherokee Community School District Board of Education unanimously approved the 2010-2011 Fiscal Year budget Monday night, carrying a Total Spending Authority (TSA) of $10,986,715.
The approved budget establishes a levy rate of $15.14 per $1,000 of property tax valuation, compared to the last fiscal year's $14.34 levy, which is up 64-cents per $1,000. The FY 2010-2011 Property Tax Levy totals $2,195,309.
According to Cherokee Superintendent Dr. John Chalstrom, the new budget's levy rate is still 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 $10,986,715 TSA was arrived at by totaling the Combined District Cost of $8,070,882; Prior Year's Unspent Balance of $1,556,674; Instructional Support $361,788; Pre-School Foundation Aid $162,371; and Miscellaneous Income $835,000.
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 10-percent cut across the board last October 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. Currently the District's enrollment count is estimated at 1,000 students K-12.
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 July 1.
Of the District's TSA, the State controls Combined District Cost; the voters control the 5-year ISP levy, voter PPEL funds, and debt; and the Board controls cash reserve levy, regular PPEL funds, dropout, and management levy.
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.
The Unspent Balance is basically an incentive for school districts to not overspend," explained Chalstrom.
Regarding enrollment trends, Chalstrom illustrated that the K-12 enrollment was 1,060 five years ago and has trended downward to 1,001 this year and is estimated to be at 972 by FY 2011 before leveling out. Of course, other factors could influence those numbers if the District's population was to grow. The estimates are calculated by the difference in numbers of graduating seniors and incoming kindergartners.
Chalstrom also informed the Board that continued declining enrollment, combined with lower State Allowable Growth, will place the District in the position of reducing expenditures in FY 2011 by approximately $225,000.
In other business, the Board approved a proposal for architectural and engineering services for the proposed new estimated $200,000 lighting project at George Hicks Field to DLR of Des Moines, as was recommended by Chalstrom.
That project is scheduled to be under way after track and field season and completed well in time for the 2010 football season. The DLR architectural and engineering fees were approved for $16,000.
Two other estimates were received, said Chalstrom, but they contained incomplete data and lacked the comprehensive scope of the DLR estimate.
The lighting project will be paid for from the District's PPEL Fund.