IOWA CITY– The Iowa City Community School District (ICCSD) board of directors certified the Fiscal Year 2015 budget at its April 8 business meeting, setting the tax levy and spending authority in compliance with state law.
Superintendent Steve Murley announced how administration planned to cut operating expenses by $3.6 million in response to overspending and reduced income.
Community concerns about the budget cuts, particularly in music and world language programs, persisted; however, the decision on FY2015 budget adjustments was final.
The school board began working on the FY2015 budget in January, and the final version includes almost $141 million in expenditures. The amount was not a surprise, nor was an increase to the property tax levy of 12 cents per $1,000 to support those expenditures. The controversy came from the proposed $3.6 million administrative cuts in people and programs.
On Jan. 2, the administration received a notice from Jeff Berger, deputy director of the Iowa Department of Education, that “the district may have a negative unspent balance within two years.” Unspent balance is cash used to fund ongoing operations between quarterly payments received from the state. It is also a cushion to enable the district to avoid short-term borrowing to meet cash flow needs. The notice prompted administration to act, dealing with high expenses and lost income through a FY2015 budget adjustment.
“Essentially, what we have done is stabilize the budget,” Murley said. “We haven’t started to repair it next year.” According to Murley, $3.6 million was the least amount of reduction the district could undertake and stay ahead of the state’s required ratio for unspent balance and revenues.
State law requires the unspent balance ration (UBR) be greater than zero, and ICCSD administration seeks to keep that figure at 5 percent.
At the end of the current fiscal year, the UBR is expected to be 1.6 percent, with FY2015 projected to be 1.0 percent.
If the district were to return the UBR to 5.0 percent next year, it would mean a $9 million budget adjustment; catastrophic for the district, according to Murley. He said the administration crafted a “ladder approach” to gradually get the district to the desired 5.0 percent UBR by FY2019.
Murley released a booklet that explained factors and circumstances that influenced budget decisions. In addition, he released a budget adjustment summary that provided details of how school operations will be impacted. Both documents are available on the district business office website at the links below.
District income is down, in part due to the loss of a one-time infusion of stimulus dollars.
Loss of funding from the American Recovery and Reinvestment Act (ARRA) and the Ed Jobs bill caused a decrease in miscellaneous income from $18 million to $12.5 million, nearly $5.6 million over four years.
While the ARRA suggested an investment in education, these one-time moneys are gone next year. According to the FY2015 Budget Blueprint, “(the district had adopted) a philosophy and practice of overspending with no regard for future students.” Murley and the administration plan to change that.
Coupled with that income decrease is the uncertainty of supplemental state aid. The figure set by the Iowa legislature has varied from zero to four percent in recent years, and this session, the legislature did not meet its statutory obligation to set the supplemental state aid for FY2016 within 30 days of the governor’s proposed budget. This potential variable requires the district to utilize a best case scenario methodology in long-term budget planning. For planning purposes, Craig Hansel, district CFO and secretary, used an assumption for FY2016 supplemental state aid of two percent. Whether or not that amount will be approved by the legislature is unknown. Without adequate funding from the state, the district’s future holds additional budget adjustments.
“After the business office worked through the calculations to determine the $3.6 million budget adjustment necessary to stabilize the budget, the district administrative team set goals for operational reductions,” said Murley in an email. “The elementary and secondary administrator teams were then provided targets for budget reductions at the elementary, junior high school, and high school levels. They worked collectively to come to consensus decisions on reductions that would occur at all schools in these grade level areas,” he added.
The cuts in personnel were based on retirements or resignations, without laying anyone off. About 60 district employees have resigned or plan to retire this year. Murley said about 30 of those positions could be backfilled, and the rest would be eliminated to generate the necessary budget reductions.
Murley was asked why the district did not raise more revenue or begin budget cuts before UBR was on track to go below zero.
“The district did consider reducing these positions the 2010-2011 school year,” said Murley. “Due to the growth in student population and community concerns about escalating class sizes, the (school) board made the decision to use the general fund to provide support to maintain small class sizes.”
The decrease in funding streams and projected student population growth forced a reversal of that decision. The budget will be cut, and class sizes will grow in some grades.
“We’re spending too much money,” said Murley.
Last week, cuts in the district’s language and music programs garnered the most public opposition.
“I’m here to address the elimination of the fourth grade string program,” said Stephanie Dotzel, a fifteen-year string instructor for the district. “We have a nationally recognized, high quality string program that exists in this town, uniquely developed through a combination of private Suzuki instruction and high level public school teaching. The complete elimination of the fourth grade string program could be expected to produce a 65 percent drop in enrollment over the next two years.”
Cecilia Roudabush, a 25-year music instructor who teaches at North Central Junior High, also offered comments.
“General music took a dramatic cut to our program eight years ago. But we have survived and flourished with hundreds of students, many with severe and moderate disabilities and special needs coming through our door. We took one for the team already. I’m hoping you will continue to offer general music at the very least as an elective for those who want that opportunity,” Roudabush said.
Mara Goodman, president of the Iowa City Music Auxiliary, said her organization opposes any district change to music education, either classroom or performance, which will decrease the number of students involved in music education, and strings teacher Wayne Thelander also had concerns.
“I’m not quite sure why you are cutting a thriving program like the orchestra,” said Thelander, a teacher since 1976 and district employee for 15 years. “I will probably retire before the effects of these cuts will take place. But I am seriously worried that Iowa City, which has been a hallmark for school districts throughout the nation, is going to settle for mediocrity,” he concluded.
The music and language program cuts represent only one-fourth of the budget adjustment, and despite public comments, Murley said the fiscal decisions presented last week were final. “We’re moving forward with it. We have to achieve a $3.6 million budget adjustment,” he said.
At a press conference after the board meeting, Murley responded to the public’s remarks.
“Unfortunately, you heard a little bit of that during the open comments tonight; people look at their program and say please don’t reduce my program, reduce somebody else’s. We try to keep them out of (the budgeting process) for that reason. It’s divisive and it doesn’t help us build a culture and climate that we need to provide the best education for the students,” said Murley. “We are moving ahead.” The administration must now complete teacher assignments by April 30, as required by contract.
“This is the hardest work that the administrative team ever has had to do,” added Murley. “In the end, there are no good decisions when it comes to reducing the budget. As the team worked through these issues, all the discussions focused around what would cause the least impact on students and teachers in the classroom.”
The next meeting of the school board is on April 22.
Following are links to the ICCSD budget documents:
FY2015 Budget Blueprint: http://www.iowacityschools.org/files/_zJI0X_/85aaf7b3886fcd223745a490138... .
District Budget Adjustment Summary: http://www.iowacityschools.org/files/_zJIrA_/4447fab38ef5f86c3745a490138... .