School board members grant final approval for 2023-24 budget

The Red Oak School board has granted final approval for the proposed fiscal year 2023-24 budget, with an adjusted due date of April 30.
A public hearing was held on the proposed budget. No oral or written comments were received.
Categories for expenditures include instruction, total support services, non-instructional programs, and total other expenditures.
Among the key variables funding property taxes were the certified enrollment numbers, which were at 1,073.1 for 2023, and were expected to drop to 1,034.1 in 2024. Preschool enrollment was expected to increase by one from 33.5 to 34.5, supplemental state aid increased from 2.50% to 3%, and drop out prevention dollars increased from $190,747 to $315,976.
The proposed property tax rate by levy would increase to 15.5536% in 2024. Superintendent Ron Lorenz said there were a lot of economic challenges the district was facing that most other organizations were facing right now.
“We are dealing with inflation, rising operational costs, stagnant property values, and declining enrollment. Those were all key considerations as we developed the budget, and with the board’s direction, priorities were established. Increasing the property tax rates from 14 cents to a maximum of $15.55 cents per thousand dollars valuation was preeminent,” explained Lorenz. “We also wanted to maximize our surplus levy to save on interest payments and accelerate the district’s bonding capacity in the future, and we wanted to levy as much into the management levy as we could while still staying below the 15.55% threshold. This budget accomplishes all of those objectives.”
Lorenz added that by maintaining the surplus levy at the statutory limit of $4.05 per thousand, they were able to save taxpayers $94,250 on top of the $165,000 saved previously, and by lowering the management fund levy to 41 cents per thousand dollars valuation, they were able to stay within the parameters established by the board, and raise $165,000 for things such as legal settlements, natural gas, liability insurance, and workman’s compensation.
“I know we’ve all anguished over this. We all want that levy to be lower, and we know we’re asking a lot of our taxpayers, but that’s the level we need to keep things going,” commented Lorenz.
The board then held a public hearing on an amendment to the proposed FY 2023 budget. Lorenz said the issue was a straightforward one.
“We have to amend our current year budget to obtain additional spending authority to cover some increases  that we’ve made to our original budget authority. Specifically, we have support staff salary increases, we have janitorial cost increases, and we have ESSER expenditures that weren’t factored in. We propose increasing the current year budget by $800,000. That’s $400,000 for instruction, $200,000 for support services, and $200,000 for other expenditures,” advised Lorenz. “It’s important that everyone remember this budget amendment has no impact on tax rates or any other general fund expenditures, it’s simply spending authority.”
No oral or written comments were received during the second public hearing. The board approved the 2023 fiscal year budget amendment and the 2023-24 fiscal year budget as presented.
The board also discussed a 2024 fiscal year budget adjustment resolution. Lorenz said the adjustment was a means of activating the budget guarantee that exists in Iowa code.
“The 101% budget guarantee is a mechanism to ensure the district’s spending authority is not less than the previous year. It ultimately provides a buffer for districts that experience a decrease in enrollment like we have. Our loss in enrollment is greater than the increase in state supplemental state aid, and we’re subject to the budget guarantee,” stated Lorenz. “To meet that 100% threshold, we have to levy an additional $132,977 which is the equivalent of 32 cents per thousand dollars valuation. To implement that, Iowa Code requires we pass a resolution and notify the department of management.”
The budget adjustment was approved as presented by the school board.
Finally, the board discussed a fiscal year 2024 bond surplus levy. Lorenz said in order to levy funds to prepay the district’s 2018 general obligation bonds, the district had to pass a resolution and file it with the county auditor.
“The proceeds of the debt service levy, $94,250 have to be invested into escrow, and then the escrow accrues and it is used to pay down the bond maturity amounts. This is something that we’ve done in the past and the board is familiar with it,” Lorenz said.
The board approved the fiscal year 2024 bond surplus levy as presented by Lorenz.
In other business, the board:
• Approved a human resource sharing agreement with the Stanton Community School District for the 2023-24 school year.
• Approved a maintenance director sharing agreement with the Stanton Community School District for the 2023-24 school year.
• Approved a school counselor sharing agreement with the East Mills Community School District for the 2023-24 school year.
• Approved a transportation director sharing agreement with the Sidney Community School District for the 2023-24 school year.

The Red Oak Express

2012 Commerce Drive
P.O. Box 377
Red Oak, IA 51566
Phone: 712-623-2566 Fax: 712-623-2568

Comment Here