Treasurer presents positive outlook on district’s financial state

Treasurer presents positive outlook on district’s financial state

By Melanie Williamson

School district treasurer Suzanne Wilson presented the five-year forecast during the Monday, October 30, special school board meeting. She started with the executive summary that shows forecasted expenses and revenue through to the fiscal year 2022. She reminded the board that the forecasted amounts could change based on changes in revenue and expenses. However, based on the currently forecasted numbers, the district will have a positive balance of $719,834 at the end of the fiscal year 2022. Wilson stated that while that amount isn’t enough for the district to be comfortable, it is a positive amount, which is good. She went on to say that many districts have a negative balance, which means the state starts getting involved.

In regards to revenue, Wilson explained that slightly over 50% of the district’s revenue comes from property taxes, which is driven by three factors: property values, tax rates, and collection of taxes billed. The district did receive an increase in the 2015 tax values collected in 2016 due to a combination of reappraisals and new construction.

The district receives slightly less than 20% of their total budget from unrestricted grants-in-aid. This is money from the state that can be used for any district expenses. The state works on two-year budgets, so Wilson offered projections based on those numbers but advised that those could change. She also pointed out that the district received $30,000 less from the state from last year to this year. They also get a significantly smaller amount from the state that is only to be spent on funding for career tech programs and programs for the economically disadvantaged.

Wilson went on to shared that the district’s revenue from open enrollment and excess costs for special education has increased significantly since 2015 and she anticipates they will continue to improve. Excess costs for special education comes from money the district receives from other districts when a student with special education needs comes to Vermilion through open enrollment.

Wilson stated that there are occasionally other sources of revenue coming into the district such as when the district can sell the old elementary school. She shared the district received a one-time refund from workman’s compensation this year. However, beyond selling the building, she does not foresee many other revenue sources within the forecast.

Moving onto expenditures, Wilson stated that the expenses of the district are expected to increase an average of 1.77% a year through 2022. Approximately 48% of the district’s total expenditures go to salaries. Wilson stated that the projections provided are based on the current contracts so that they may change after the next round of contract negotiations. Benefits make up 18% of total expenditures. Wilson explained that there was a $300,000 increase in 2018 due to the severance payout, but that is a one-time expense.

Wilson moved on to purchased services which account for 19% of the total expenditures. This category includes tuition paid to other districts due to open enrollment, as well as utilities, professional services, leases, upkeep, and repairs. Supplies and materials account for only 3.1% of the total expenditures. she pointed out there that was an increase in 2017 because there was a large number of new textbooks ordered, and she was not sure when another large textbook purchase would need to be made.

The next category was capital outlay. This category showed a very significant jump from 2016 to 2017 due to the district buying two new school buses, maintenance equipment, and some new computers. She pointed out that they are projecting the purchase of two new buses each year for the next several years as they gradually replace the oldest buses in their fleet.

Debt payment expenses are going down due to the district paying off their House Bill 264 debt this month. Other expenses of the district include auditor fees, fund transfers, and workbooks fees. These are all relatively small percentages of the total expenses and challenging to reduce since they are expenses related to state requirements.

In the end, it came down to the board wanting to know if and when the district may need a new levy. Wilson stated that assuming the current figures, the district should pursue a levy in 2022. However, she reminded the board that they have been able to push back the need for a levy by several years by focusing on increasing revenue and decreasing expenses, so that is still a goal for the district. Further, Wilson stated that when the district does pursue a levy, she recommends a permanent improvement levy. This would mean the levy money could only be spent on improvement that lasts five years or more. This would include things like parking lots, new roofs, HVAC systems, needed equipment and more. It would not go into general operating expenses and could not be spent on items like salaries, benefits, and utilities.

Superintendent Pempin agreed with Wilson on focusing on an improvement levy adding that there is less than $400,000 in the current improvement fund, which could easily be wiped out if one of the roofs on Sailorway or the high school needed replacing or a couple of the older HVAC systems went down. He added that while the elementary school and field house are new and don’t need these kinds of things, it is essential that they work to maintain the high school and middle school buildings to ensure they remain functional.

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