School district presents tax levy extremes

Figures form base for start of school budget discussions

By Jennifer Eisenbart

Staff Writer

As Burlington Area School District Business Manager Ruth Schenning handed out information on district revenues Monday night, Superintendent Peter Smet interrupted to make one point very clear.

“These are not a proposal,” said Smet, who repeated the fact again during an interview Tuesday afternoon.

The reason for the worry? In putting together the revenue projection, district officials picked the two extremes in determining a tax levy – one of which would be a zero increase, while the other would be roughly a 14 percent increase.

The former would keep the district at last year’s tax levy of $20.36 million dollars, while the latter would increase the levy to $23.2 million by utilizing the full levy authority the district has due to referendum debt and by under-levying in the past.

On Tuesday, Smet stressed that the two numbers were given to provide starting points in the budget discussion process.

“We wanted to illustrate and educate on the revenue limit,” Smet said. “We took these two points.”

The two points illustrate, though, what some believe to be the best possible route in the district – a zero-percent increase – and what the district has stressed over the last two years in that it has consistently levied only what it needs to pay the bills.

In putting together the tax levy numbers, Schenning worked through the state’s revenue limit worksheet, which shows BASD at $35.4 million.

In putting together the tax estimates, the district assumed that state aid would remain flat at $14.5 million.

However, as both Schenning and Smet pointed out, the state aid will be the last part of the budget process, since preliminary numbers don’t come from the state until July and final numbers not until Oct. 15.

As a result, trying to predict state aid is, as Smet put it, a guessing game.

“Probably one thing I can guarantee you: it won’t be that number,” said Smet, who also added that, “If anyone has a better guess, we’d be more than happy to listen to it.”

However, in putting together the two tax levy extremes, two other facts came to light. One, if the revenues and expenditures stay the same, the fund balance will be utilized again. That, Smet said, is simply because it was utilized to balance the budget this year – therefore, it would have to be used again.

The fund balance has dropped from a high of $4.1 million in the 2011-12 school year to $3.3 million this year.

Smet also presented numbers regarding drops in staffing – and in enrollment. Right now, the district has cut staffing more than enrollment has declined, which will, eventually, come into balance as enrollment continues to decline.

“It would not (necessarily) be tomorrow, or next year, or the year after that,” Smet added.

Other matters

In other discussions at the Finance Committee meeting:

• In looking at school fees for the 2013-14 school year, the district will again be looking at increasing the cost of school lunches to keep up with federal standards.

The increase is predicted to be 10 cents per lunch. If the district does not raise the price, it will be forced to pay money back to the federal government because of free and reduced lunch payments to the district.

• The committee voted unanimously to recommend remaining with Thomas Bus Company for bus service, and extend the contract from three to five years.

Smet said the company wants to extend the contract to improve its ability to secure loans when needed to purchase new equipment.

“When they go to banks to borrow money to buy buses, banks are looking for longer contracts,” Smet said.

The district negotiates the cost of busing with Thomas each year, and there is no increase this year – provided that the district agreed to the longer contract. While there were no complaints with the process, both Phil Ketterhagen and Roger Koldeway asked that numbers be presented next time to ensure the best bargain for the district.

Following the meeting, Koldeway added that he was going to try and get those numbers before the contract went before the full board for approval next month.