March 18, 2014

For the second year in a row, general-fund expenditures will exceed revenues, to the tune of more than $1.5 million business manager Gary Bengtson told Carroll Community School Board members during a budget work session Monday night.

The numbers are inflated, cautioned Bengtson, explaining that the practice of overestimating costs on the certified budget in order to avoid multiple hearings to amend the budget throughout the year is common practice among Iowa school districts.

Bengtson calculated the budget based on a 4 percent increase in costs from the current fiscal year, which will end June 30. Even with actual costs increasing by a smaller percentage, the district will definitely dip into its reserves this year, said Bengtson, and will also do so next year if cuts are not made.

Though unable to provide a concrete target number, superintendent Rob Cordes said the district would benefit if it was able to cut between $400,000 and $500,000 from the general fund for the 2014-15 school year.

The largest portion of general-fund expenditures is salary and benefits, so a large portion of those cuts will come from early retirement, in which 13 teachers have volunteered to participate this year, said Cordes. If none of those positions were refilled, the district would save just shy of $680,000, he added.

How many of the positions will have to be refilled will depend on a number of variables including high school course registration and class sizes at the elementary and middle schools, Cordes said. Some duties will be reassigned to other educators; the positions that cannot be eliminated can be filled with newer teachers who receive smaller salaries.

The teachers retiring early include: Diane Dryden, elementary teacher, 25 years of service to the district; Max Fischbach, risk instructor at CHS, 17 years service; Barb Mortenson, CHS family and consumer science, 16 years in the district; Pam Kluver, preschool teacher associate, 23 years of service; Linda Wonder, Adams Elementary building secretary, 24 years of service; David Faris, high school instructor, 27 years in the district; Elaine Batz, Adams Elementary secretary, 23 years of service; Jewel Proctor, elementary instructor, 33 years in the district; Karen Blum, special education teacher associate at Fairview Elementary, 25 years of service; Ione Koster, health assistant at Adams Elementary, 26 years in the district; Sherry Nieland, health assistant, 19 years of service; Linda Hackfort, secretary of the transportation department, activity fund coordinator and ACT test coordinator, 35 years in the district; and Char Clark, fourth-grade teacher, 241/2 years in the district.


The general-fund cuts are necessary primarily due to state cuts to allowable-growth funding over the past several years, explained Bengtson.

The state sets a funding ceiling, a maximum amount per student that any district in Iowa is allowed to spend. This year, that amount per student is $6,121 per pupil; next year it will be $6,366 per pupil.

Though it will increase 4 percent for next year, this has not always been the case, said Bengtson. For several years, the state did not increase per-pupil spending each year, even though costs - such as salaries, health insurance and utilities - continued to rise.

Though the ceiling makes Iowa's funding formula one of the most equitable - because a school in a rich district cannot spend more money per student than a school in a poor district - it also restricts individual districts from being able to make up the difference between the state allowance and the actual cost through property taxes, said Cordes.

The seeming contradiction is evident this year. Property values in the county increased more than $100 million, which means even though the tax rate will decrease by 53 cents per $1,000 of valuation, the total amount of school funding paid by taxpayers will increase about $500,000; and though residents will be funding a larger portion of the school district's budget, the total amount of money the district can spend will not increase - the state will simply contribute less to that total.

The second significant piece to the funding formula is enrollment, which is declining across western Iowa. In the last decade, Carroll schools have lost 160 students - even when the per-pupil cost increases 4 percent, the total money available to the district does not increase by 4 percent because there are fewer students, said Cordes.

Though incoming classes are generally smaller than graduating classes, this loss of students is not concentrated in a single grade.

"When you lose 15 kids spread out through 13 grades, it gets hard to reduce staff in specific areas," Cordes said.


The final blow to the district's revenue stream came last year when the state decreased the amount of cash reserves allowed for a district to levy those reserves. In 2013, a district could have 25 percent of its total costs in reserve and levy a property tax. Starting this year, a district is allowed to have only 20 percent in reserves, an amount the Carroll district currently exceeds, though not for long, warns Bengtson.

The other levy available to schools to support the general fund is an instructional support levy. Carroll is one of only eight districts in the state that does not have this revenue. Carroll voters rejected this levy by large margins in 2006 and 2008.

But board president Kim Tiefenthaler said eventually "something is going to have to give."

"I don't understand for this community," he said, adding that Carroll was also one of the last six districts in the state to pass a local-option sales tax.

Tiefenthaler said that the community can see the rewards of the sales tax in the ongoing construction projects and other programs, and that it would also see the rewards of an instructional support levy.

"How many kids do you want in a classroom? That's what we're facing here," he said. "We only can make so many cuts."