Clear Lake Community School District Superintendent Doug Gee presented the end of year financials for Fiscal Year (FY) 2023 to members of the school board at the Oct. 10 meeting. From a cash standpoint the district is in a “pretty darn good spot” and Gee would like to keep it that way, which is why the upcoming Physical Plant and Equipment Levy (PPEL) was also readdressed.
Gee said the district’s general fund, which pays for the cost of education and day-to-day operations, has an ending cash balance of $5.2 million, a surplus of $185,000. “That means we’re not going to be needing a cash reserve levy for a considerable amount of time, unless we really, really overspend.”
The management fund, which covers the cost of unemployment and early retirement benefits, and liability insurance, shows a surplus of $160,000 with a year end balance of almost $1.3 million. The SAVE (Secure an Advanced Vision for Education) fund, garnered from the one percent state-wide sales tax and used for buildings and technology, is also sitting with a $921,000 surplus, with an ending balance of $2.5 million.
“So, we can start looking at …what would we end up doing and what do we need to do to continually update and upgrade some things in the schools,” Gee said, as he moved on to the PPEL fund. Both SAVE and PPEL are similar as to what things the funds can be used for. The PPEL fund, currently sitting at a year end balance of almost $1.3 million dollars, is one fund that traditionally gets overspent.
“And then the one that we always pay close attention to is our unspent balance. Again, we ended up doing very well with this one with [a year end balance of] about $5.2 million,” said Gee, who had actually predicted a FY23 year end balance of $5.1 million. “So the nice thing is we’re at a good spot at 23 percent unspent balance.”
However good all the financials look, Gee said they already know they are going to overspend this year with pay raises and the hiring of additional staff. He said they would like to bring that unspent balance down a bit while finding that, “…sweet spot where you can kind of stay the same.”
The discussion then turned to the upcoming Physical Plant and Equipment levy vote on Nov. 7 where taxpayers will be asked to vote on two things. The first is whether or not to increase the PPEL levy to $1.34 per $1,000 of taxable value of property, an increase of 67 cents for the remaining two years on the current PPEL levy. The second question, if approved, would put that $1.34 levy in place for a period of 10 years.
Although Clear Lake school’s finances look great, Gee would like to make sure they can maintain the flexibility they need, especially since they can’t always rely on the state to fund their allowable growth. Gee pointed out that in 2009 the Iowa State Legislature voted on a 0 percent allowable growth for schools, which in turn came across as a 10 percent across the board cut. For school districts that weren’t managing their general funds, they went backwards, dipping into their general funds more and more to supplement other things, such as Special Education, insurance, or to purchase equipment.
The problem is that the funding formula authorized by the state for schools has not kept pace with inflation, nor the rising needs of the Clear Lake Community School District. “The biggest thing for us is making sure people understand that we’re really looking to enhance our school safety,” said Gee about a new camera system they would like to see in each school that would automatically check a person’s ID and identify whether they should or should not be in the building. Or to be able to purchase new buses whose price has increased by $70,000 over the last four years.
“So, if we have that extra 67 cents, it’s a big deal,” he said.
In essence, a vote to allow an increase in the PPEL will slightly increase the assessed value on a person’s property, but it will not change the tax levy, the tax percentage paid on that assessed value. “Our levy rate per $1,000 has stayed the same, but the assessed value on their home just went up. That’s happening throughout the state. Your assessed value, if you live in Clear Lake, probably went up 15-25 percent, whether the PPEL is increased or not,” Gee explained.
“I’m hoping that taxpayers will basically trust the board. Because we told them that their levy rate wasn’t going up when we did that $80 million bond referendum in 2020. And it hasn’t. …so I would tell people that whether we do the PPEL or not, their tax rate is still going to be $10.39.” Gee said.
The next community informational meeting will be held on Oct. 26, from 6:30-7:30 p.m., in the Middle School Commons.
