Spencer school CEO: No 'major budget reductions' anticipated this year

As Spencer school board members were presented with district line item budgets from 1998-99 through this and next school year's budget estimates, they were told by the district's CEO this week that tough choices will need to be made.

"But the message I want out there is we are not going to go through any major budget reductions this year," Superintendent Greg Ebeling also assured. "We are going to look at using attrition through early retirements as a possibility. But, there is not going to be any big, 'This is what we're going to do for budget cuts for the coming fiscal year.' ... A year from now, if we're in the position where we have to make reductions, we'll have plenty of time leading up to them, which will allow us to talk about the process, what we're going to do and how it's going to look."

In regard to the anticipated $890,735 reduction in state aid Spencer is expecting yet this school year per Gov. Chet Culver's 10 percent across-the-board cut, Ebeling informed board members that the district will receive less revenue, but it will be granted spending authority.

"Even though they don't send the cash to us, they do give us the authority to spend it," he said. " ... Our cash position is going to be the concern for us."

As he suggested district representatives will more than likely rely on a combination of borrowing and levying cash into the district's coffers, Ebeling added, "We're going to try to keep the property tax rate level and not levy in anymore cash (in order) to keep the budget as it is."

Ebeling then told school board members that he and Sharon Slawson, the district's business manager, have assumed a worst-case scenario of a 0 percent allowable growth amount per pupil for the 2010-11 budget. The superintendent also said he'll be advocating for Spencer to utilize Iowa's 101 percent budget guarantee in school financing, "which allows districts to get 101 percent of their budget from the previous year."

"The budget guarantee is local property taxes on autopilot," he explained.

When he compared Spencer's perceived 2009-10 budgetary situation to the five indicators of a district's financial health presented by noted school finance authority Larry Sigel, Ebeling concluded, "The good news is we're at a solid financial position with our authority. But the trend lines (for solvency ratio, enrollment numbers, staff costs, balanced spending authority budget and unspent budget authority) are a little bit scary for us.

"For Spencer's break-even point, we're not totally even, so we're eating into some of our authority this year. Staff costs went down this year. While most districts are between 75 and 85 percent (of their general fund), when you start crossing over and moving toward the 85th percentile, that's where you can get into trouble. ... Enrollment trend, obviously, is always a concern for us. And, we know that our solvency ratio, which is how liquid we are and how much cash we have, is a concern. But overall, Larry (Sigel) would look at these numbers and say we're in really good shape because of our authority -- because we do have options to deal with our solvency ratio and staff costs. So, there is a lot of good news here."

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Spencer School District General Operating Fund Projections

(Excludes PPEL, Debt Service, Capital Projects, Trust & Agency Monies)