Fort Dodge Community School District

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One Year of Cushion - from The Messenger

February 19, 2019

As long as the Fort Dodge Community School District can increase its certified enrollment next fall, FDCSD director of financial services Brandon Hansel said the district should remain strong financially.

"We captured more than we originally anticipated with our early retirement," Hansel said during a budget workshop at the FDCSD central office Monday night. "That goes a long way towards reducing any adjustments that would be necessary for fiscal year 21."

He added, "I'm ecstatic. If we can gain back a few kids this fall, I think we will be in great shape going forward and then not do that again with student loss."

The district's certified enrollment was down in 2018 by about 140 students.

"Because we lost those students, we will be on what's called a budget guarantee for next year," Hansel said. "We have been on that in the past. That is the funding mechanism the state provides to give us 101 percent of our prior year's budget.

"Because of that loss in students, normally our budget would be less, but the state gives us what our current year's budget is plus 1 percent additional to give us a one-year repreve and allow us to make the reductions necessary to maintain a balanced budget."

The Iowa Legislature set the state supplemental aid at 2.06 percent for public schools.

"No matter what SSA would have been this year, we are looking at 1 percent new money," Hansel said. "For us, that's $256,000. You have to go up to about 5 percent SSA to pull us out of the budget guarantee. It stings when we lose that many kids."

Hansel said the budget guarantee is funded through property tax.

Bill Kent, FDCSD board member, asked what the impacts would be if students are lost again next year.

"You would be off of the budget guarantee and you would have negative new money," Hansel said. "Some districts that have sequential years of budget decline actually will have a negative new money situation. That's not good."

Superintendent Jesse Ulrich added, "I view it as we have one year of cushion."

In terms of what is going right for the district, Hansel said the school's debt levels are healthy.

"We are well within our legal debt capacity limits," he said. "We feel like we have a balanced budget. We feel good about our tax rates and property growth. They continue to move as we projected."

Closing the enrollment gap, clarity from the Iowa Legislature, and unknown impact of regional economic development, were a few areas Hansel noted as concerns.

"Enrollment is the number one driver of our budget, along with what the state gives us," Hansel said.

In terms of the percentage growth history from the state, Hansel said, "Over the last 10 years, it's increased just hair over 1,000 bucks. That's about 100 dollars per student per year is what we have been looking at."

Urlich added, "While we appreciate the Legislature's increase, which is historically the third largest in the last 10 years, it's still not enough to keep up with the cost of business, especially when you have declining enrollment. We are appreciative of their effort to continue the trend where state supplemental aid is higher than the rate of growth for the state of Iowa, so we appreciate their efforts."

Property taxes

The tax levy for fiscal year 2020 is 16.76, which is seven-tenths of a cent less than what it is right now.

But that doesn't mean homeowners will pay less in taxes, according to Hansel.

"The point I want to make here is rollback," he said. "The rollback is the percentage of assessed value that is assigned for the purposes of taxation."

He said that amount is set by the Iowa Department of Revenue each year. For fiscal year 2019, it was 55.6 percent on a residential property.

The rollback percentage for fiscal year 2020 is 56.9 percent.

"What that means is on a $100,000 home, the rollback value is going to increase from $55,621 to $56,981," Hansel said. "So the total taxes paid will be $955 for fiscal year 2020 - a $22.30 increase over the current year."

He added, "So the point we need to make is even though our levy decreased by seven-tenths of a cent because the rollback percentage is higher, it will generate more taxes on the house. So they will be paying $22 more in real dollars. The levy went down, but the bill went up because of the way the rollback is calculated and that's out of our control."

Ulrich said the school district only accounts for a portion of the $955 bill.

"The city, the county, the community college ... all those different levies were added into that total bill," Ulrich said.

For commercial properties, the rollback percentage is 90 percent, which is the same as it was for fiscal year 2019.

"Because the rollback is the same, they will realize the savings from the decreased levy rate," Hansel said. "So they will pay $338 less than they are this year."

FDCSD BUDGET AT A GLANCE

General fund budgeted revenues fiscal year 2019-20 - $46,671,002

General fund budgeted expenditures fiscal year 2019-20 - $46,697,0903

The tax levy for fiscal year 2020 is 16.76

The rollback percentage on residential properties for fiscal year 2020 is 56.9 percent

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