How-Winn in good financial health

Betty Munkel and Jamie Wemark listen as David Gaus, Howard-Winneshiek School District Business Manager, gives a financial health presentation to members of the Lime Springs Community Club. He plans to pass on the same information in all H-W communities on a yearly basis.

by Marcie Klomp

“Our district is sitting healthy,” said David Gaus, Howard-Winneshiek CSD business manager. He spoke at the Lime Springs Community Club meeting on Feb. 20.

His intention is to give a financial health summary of the district to each town in the district this year and every year hereafter. It is a way to show transparency to the communities.

Butch Burnikel asked if closing Ridgeway school was justifiable. “The public was not given the numbers. That’s why I’m here.”

Even though he said the district is in good condition financially, there are still things that need to be improved. One of those is enrollment versus gross expenditures.

How-Winn has seen a sharp decline in enrollment since 2005 (1,437) to 2011 (1,341) at nearly 100 students. Some of the drop is due to more students enrolling out of the district than those enrolling in and also a declining birth rate.

In that same time span, expenses have increased from $11.994 million to $13.224 million, over a million dollar increase. In the 2008-09 school year the expenditures were nearly $14 million.

Gaus explained, “Our state aid is based on enrollment. We get $6,006 per student enrolled.” So, as with any business, if revenue (students enrolled) drops, expenses should stay in balance—not increase. The remainder of the money needed to run the district is through taxes.

The cost of educating students has gone up and down in the past five years. In 2007, it was $8,729, in 2008-$9,240, 2009-$10,091, 2010-$9,977 and in 2011-$9,556. As you can see, it went up for two years and is now on a downward trend. H-W is higher than the state average by $200-400. One of the reasons the district is higher is transportation costs. H-W is the third largest district in Iowa.

Some ways to decrease expenses is to control the line-item budget. “We can’t overspend on the line item. If the account is at zero, then we have to say ‘No.’ It comes down to better money management,” Gaus explained.

He was happy the legislature gave two percent allowable growth to schools. “That will give us $6,124 per student for the next school year.”

When looking at expenditures, H-W spent $34,034 on average per day in 2007. In 2011 that average raised to $36,233 per day.

Those numbers are important for summer months as the state only pays school districts 10 times per year. The districts have to have enough money in “reserve” to pay bills during those two-three months. The optimal number is to have enough reserve for 90 days. H-W has a reserve of 64 days.

Sixty-four days is not the greatest but is nearly twice as much as last year at 38 days.

Many schools are in even worse shape, having only 20 days. That means they have to take out loans and pay interest for two months to make payroll and pay bills.

One issue that comes up when talking cuts is teachers and salaries.

At H-W, wages and benefits are about 75 percent of the general fund expenditures. The state average is 72-85 percent, so the local school district is on the lower side of other schools. Gaus said, “I feel the acceptable range is between 75-79 percent. We are very conservative. The Board of Education has done a good job on this.”

Wages and benefits are looking good for H-W, but transportation is two to three times higher than the state average of two to three percent of expenditures. In 2011, transportation is 6.47 percent of the general fund expenditures.

Gaus explained, “This seems high, but we have the third largest land mass in the state. Number one is Western Dubuque, and their rate is higher than ours at 8.5-9 percent. Bill Kosters (transportaion director) has done a great job. He’s kept it at 5.5-6.5 percent range. We’ll have to live with it.”

He went on to say, “My main focus is on special education. We are overspending for special education.”

Fourteen percent of students are in special education and a lot of those students open-enroll out to other districts, such as Decorah.

Level I special education students receive $10,000 from the state, Level II-$12,500 and Level III-$15,000. When those students go to another district, that district bills How-Winn. The bill could be $20,000, when Hpw-Winn is only receiving $10,000. “If we had a strong special education program, we would get to bill other districts. At first it would cost money, but in the end it would be (profitable).”

To help with finances, Gaus said H-W will be working with PMA’s Cash Flow Management Program. “They can give a five-year financial projection, where they can estimate where we’d be in five years. They are a third-party company, and it doesn’t cost anything.”

With the 2012-13 budget being looked at, Gaus doesn’t see a lot of changes from last year. That might mean the two remaining outlying schools are safe from closure this year.

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