Budget increases to cover major repairs
An unexpected major repair, a jump in costs for special education services and an anticipated drop in state funding have pushed up the USD 438 Skyline mil levy.
The mil levy for the 2014-2015 budget is 50.03. This is an increase of 3.75 mils over last year, said Superintendent Mike Sanders at the Board of Education meeting Monday.
The 2012-2013 mil levy was 49.15 mils so this year’s mil levy is 0.88 above two years ago. The estimated budget for 2014-2015 is $6.6 million, an increase of $500,000 above last year. The increase will mean additional taxes estimated at $36 a year on a $100,000 house.
Sanders said he expected the actual budget to be closer to $6.4 million. As a standard practice, he over estimates the number of students by 10 and budgets for that number.
He deliberately estimates high because if he is low, he would have to republish the budget and that takes time and extra money.
In a year when valuations were up, the estimated loss in state funding to Skyline is $18,000, mostly from cuts in at-risk and funding for the virtual school.
State funding is expected to go down even further. The governor’s tax plan has not increased state revenues as expected and in two years, revenues are expected to be in the red. Since 90 percent of the state budget goes to human services and education, those areas would have to be cut.
If Democrat Paul Davis is elected as governor and revamps the tax plan, any new revenue would not start until July 2015 and schools wouldn’t see that new revenue for 18 months, Sanders said.
Most of the increase in the mil levy was due to the unexpected replacement of the HVAC controls for the entire building. Repairs for the HVAC system come out of the capital outlay fund. To help cover the cost of the repairs, the capital outlay mil levy was pushed to its limit of eight mils, Sanders said.
Another element affecting the district is a 20 percent increase in costs for South Central Kansas Special Education Cooperative. This means an additional cost to Skyline between $34,000 to $35,000.
To cover this additional cost, the district held a special election to increase the local option budget from 30 percent to 31 percent. The vote passed and this gave the board the option to pass an additional two percent increase, which they did, to bring the LOB to 33 percent.
Another element of concern in the budget is the unencumbered cash balance. It has been dropping for the past two years. On July 1, 2012, the balance was $431,000. A year later it had dropped to $297,000 and on July 1, 2014 the balance was $127,000.
Sanders said the district needs to increase its cash balance so they will be looking for areas to cut.
“We’ve got to look as some deep cuts in expenditures,” Sanders said.
The contingency reserve also needs replenishing. The balance currently sits at zero and has been for two years. With so much money dedicated to other matters, if something unexpected should happen, it would be difficult for the district to find the money to cover any costs.
Sanders said he hopes he has funds left over after the next school year to help replenish the contingency fund.
“We’ve got to start building back our reserves,” Sanders said.