UNOFFICIAL MINUTES MUSCATINE BOARD OF DIRECTORS PLANNING MEETING May 29, 2012
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1 UNOFFICIAL MINUTES MUSCATINE BOARD OF DIRECTORS PLANNING MEETING May 29, 2012 The Board of Directors of the Muscatine Community School District, in the County of Muscatine, State of Iowa, met in planning session on Tuesday, May 29, 2012 at 6:30 p.m. at the Administration Center. President Tim Bower called the meeting to order. Directors Tammi Drawbaugh, Brenda Garcia- Van Auken, Penny Jones, Nathan Mather, and Mary Wildermuth were present. Director Dennis Fox was present via conference telephone as he was in Nashville on business. Also present were Superintendent Bill Decker, Director of Secondary Innovation and Instruction Diane Campbell, Director of Elementary Innovation and Instruction Shane Williams, Director of Human Resources Wes Fowler, Director of Finances Jean Garner, Director of Special Programs Jan Collinson, and Director of Operational Services Walter Crowder. The Pledge of Allegiance was recited. The reason for this meeting is that there was consensus from the board at its May 18, 2012 special meeting to have further discussion on the budget in regards to the Instructional Support Levy. Superintendent Decker shared with the Board the message that was shared with staff at last Friday s inservice. He noted that he tried to focus on three short, concise statements. The first is that the ISL is important. He noted that the Instructional Support Levy is extremely important for the district to continue to serve students in the ways it does now. He stated that he is not talking about an increase in taxes. What he is talking about is to have the legal authority to spend the money that the district has now. He stated that if the levy was raised to collect more revenue, the district would not be able to spend it as it would not have the authority to spend it. He reviewed with the board how the decline in spending authority took place. The district experienced two years of declining enrollment. This allowed district revenue and spending authority to be at 101% due to the state aide funding formula called the budget guarantee. Thus, revenue and spending authority grew by 1%. Also, the state had a zero percent allowable growth year. When enrollment increased last year, the district then went off of the budget guarantee and went back to the regular way that state aide and spending authority is calculated. Being on the budget guarantee provided the district protection. This is why the big impact happened this year and was not something that we were able to forecast to happen. He shared that historically, allowable growth (set by the state s funding formula) had been at 4% and was even as 1
2 high as 8 or 9% and was tied to inflation. Director Jones asked if part of the issue is from the jobs fund stimulus money that the district is now trying to absorb. Superintendent Decker stated that this is probably part of it, however, the district added things that were good for kids. He gave the example that the West Middle School teacher librarian was added back using job stimulus monies. He noted that the district could make the point to cut anything that was funded by job stimulus, but that would not make the district closer to even spending. He stated that this would be a short- term continuing factor, and there is a longer- term issue that is at play as well. Superintendent Decker noted that the question that is front of the instructional support levy is, Do we want to serve kids the way that we are? He stated that this is not a micro- issue. For instance, getting rid of one administrator is not going to make a difference for the need of the ISL or getting rid of one program is not going to get rid of the need for ISL. He further stated that there is not one thing that is out there that is big enough to be a solution to the problem. It is a bigger dynamic than that. In the past, the district has found a variety of ways to get around a bad situation; however, the continual reduction of state aide to schools has put the district in the spot that we will not be able to serve students the way we do now. Director Mather asked if the ISL is not approved will the district need to make the $2.2 million in cuts immediately. Superintendent Decker stated that this will need to happen in the long term but not immediately. There are things that can be done for next school year; however the drastic cut will be the following year ( ). He also stated that if the ISL is in place there will still need to be things that will have to be done in order to remain in compliant with the law. He noted that when he was hired one of the first challenges he took on was the idea that revenues and expenditures needed to match. He also noted that there has never been a job stimulus fund in education where the funds needed to be spent immediately and there has never been a 10% across the board cut and 0% allowable growth. The passing of the ISL will help the district s programming become sustainable, but administration will still need to make certain that the district is ready for the long run. If the ISL doesn t go through, administration is going to have to make revenues and expenditures match and the board will need to make some tough decisions. He noted that if the ISL is passed, the district will not have extra money and extra revenue and the community will not be taxed more. The district will not have the spending authority to be able to use any extra revenue. Director Mather asked how many years can the district buy down the levy. Superintendent Decker stated that the district s commitment is to make expenditures and revenues match, and what the board needs to remember is that this (setting the levy) comes in front of the board every spring when the budget is certified. He stated 2
3 that this is not a 10- year commitment that the board will be giving administration a blank check. Superintendent Decker noted that the first year the district would use cash reserve monies to buy down the levy, but after that, the dollars flowing into the system will be used to buy down the levy the following years. Superintendent Decker reminded the board that nobody knows what the state is going to do each year for state aide or what the economy will be like. If the ISL is not even part of the conversation, no one can tell you what the levy will be in 10 years. If the board looks at the dynamics of the levy over a period of time, they will see that there are times that the levy needed to be bumped up and there are times when it was slightly reduced. Superintendent Decker also reminded the board that the dollars that roll over into cash reserve do not generate spending authority. Superintendent Decker stated that the next important thing that he wants the board and community to know is that the ISL is not a tax increase. He noted that yes, it could have the potential to increase taxes, but the district would not have the authority to spend the increased revenue from the taxes. Having the ISL is about spending authority. Cash reserve does not create spending authority. Superintendent Decker noted that if property valuation increases, there is just as much likelihood that the levy would go down as much as it would go up. He reiterated that there is no need to keep the levy at an artificially high rate because if the district does not have a growth in student enrollment, it will not have the spending authority to spend the extra money generated from an artificially high levy rate. He stressed that administration is not asking the board to approve a tax increase. The Instructional Support Levy would be tax neutral. Superintendent Decker stated that the third message that he wants the board and community to know is that the district is not in an equal position as other districts that have the ISL. Muscatine is one of only 17 districts that do not have it. He reviewed several spreadsheets that highlighted the top 30 districts in the state of Iowa that illustrated this point. Muscatine Schools will not be able to keep the same programs that it has now for students if the ISL is not passed. He again stressed that this is not a tax levy impact and the district is limited by its spending authority, thus, putting our students on an uneven playing field when compared to those districts that do have the ISL in place. Superintendent Decker then reviewed the district s spending by fund and noted the many different categorical spending funds that the state has regulated the district in how it spends its monies in certain areas. He highlighted the general fund as it has 3
4 increased by only $300,000 over the last 6 years. He shared that in a six- year time frame there has been almost no growth in revenues for the general fund. The district has done a very good job over that extended period of time taking care of finances and doing it the right way. Director Mather asked if the ISL is approved at what point is the rate set for the first year if the district buys it down. Superintendent Decker stated that this is decided by the board every single year by April 15. He reiterated that there is no blank check being given to administration. This comes back to the board each spring. Director Mather noted that he has looked at the code for the ISL and it appears that the board can make the decision to put it in place for one year and then decide they do not want it anymore. Superintendent Decker noted that the board can put it in place for 5 years and the voters for 10 years and each year it comes before the board with a recommendation from administration. Mrs. Garner noted that if this is the case, each year administration would have to come to the board and ask for approval of a resolution of intent. Superintendent Decker noted that he has not heard of a school district that has done this but that it is definitely a board choice as it comes before the board every single year. Superintendent Decker emphasized that there is no danger with the district ending up with a $21 levy or a $17 levy like Marshalltown. For one thing, the board will not let that happen, and he will not make that recommendation. If the district would have this high of a levy rate, it would generate 2.6 million dollars that would just sit there because the district does not have the authority to spend it. He again stressed that our district is in a unique situation. He noted that our district and our community are already making a significant less investment in education than comparable communities are. He feels this is not fair to our children. He shared that one of his major responsibilities is to help organize the district to get the best results for the dollars spent that is fair to our students, our taxpayers, and our staff. He noted that this was done pretty well two years ago when the district had to cut 3.9 million dollars. He noted that he will have those same priorities in mind whether it is a small bump in the road or a larger one. Mrs. Garner noted that she will look up those districts that have the ISL and let the board know if it is all property tax or both property tax and income surtax. Superintendent Decker noted that there are different ways of looking at the combination of property tax and income surtax. Some people will see this as implementing a new tax; however, implementing the income surtax will shift the burden from property owners and make it more community- wide. 4
5 Director Jones noted that one of the plusses for the income surtax is that it would have less affect on people with a fixed income but a negative would be that the district would receive the money a year later. Superintendent Decker shared that he feels that the biggest negative would be that the district is implementing a new type of tax. Superintendent Decker stated that there will be no action taken tonight as it is a planning meeting. At the June 11 th board meeting, the Resolution of Intent for the ISL can be requested to be put on the agenda; however, only the four board members who voted against the ISL can make a motion to move forward to reconsider it. Director Jones asked when the drop- dead deadline would be. Mrs. Garner and Superintendent Decker noted that the real drop- dead deadline to have it in place is to have it on the February ballot (for the voter approved ISL) and this would need to be started in October. Superintendent Decker stated that he feels that it is important to look at the board approved ISL as it gives the district multiple ways for it to be implemented. He reiterated that the ISL is important, it is not a tax increase, and our students are not on an equal playing field. He stated that if there are community members against it, they can still force an election. He feels confident that this is fair to both sides because it means so much for the education of our students and is not an increase in the tax levy. Superintendent Decker noted that he would invite any board members to visit with him about this. Mrs. Garner will provide a list highlighting the different deadlines for the board approved and voter approved ISL dates. The meeting adjourned at 7:42 p.m. Tim Bower, President Lisa Mosier, Secretary 5
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