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ISD 2142 sees financial issues looming for next year

Declines in enrollment and skyrocketing inflation will prompt tough budget choices

David Colburn
Posted 6/16/22

VIRGINIA- ISD 2142 school board members reviewed the adjusted budget for the current school year at Tuesday nights meeting, but there was little doubt that next year’s budget was weighing …

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ISD 2142 sees financial issues looming for next year

Declines in enrollment and skyrocketing inflation will prompt tough budget choices

Posted

VIRGINIA- ISD 2142 school board members reviewed the adjusted budget for the current school year at Tuesday nights meeting, but there was little doubt that next year’s budget was weighing heavily of the minds of all.
“For the current year revised budget, take a look at that first page,” Finance Director Kim Johnson said. “As you can see, the revised budget for this year has us increasing total ADM (average daily membership, or enrollment) 50 students from last year. But last year we lost almost 137 ADM. We’re not back to where we need to be yet and I don’t think we’ll be back there this next year either. Based on Kindergarten numbers, I think our enrollment is going to slightly drop again.”
Simply put, ISD 2142 is going to lose more revenue because of enrollment losses. While the formal computation of basic aid to schools is somewhat more involved to calculate, a simplified view is that the district would lose nearly $6,900 for every student they fall short of meeting enrollment targets for.
Referring to the current budget later in her presentation, Johnson said, “In total, in this budget, there’s about $525,000 related to cost increases in food, fuel and utilities. Next year it’s going to be even worse.”
The district started the current year with just over $3 million of unrestricted general fund money, but will have to tap that to cover increased expenses, leaving about $1.4 million as the revised fund balance. That has concerning implications for next year.
“The administrative team is looking at staffing already, they’ve been doing that this spring,” Johnson said. “We’re going to have to take a deeper dive. I don’t know where we can cut anything. Part of the problem is the increase in costs that we’ve got related to running the buildings and food service. Everything costs more, and the legislature isn’t giving us enough money to even pay for the increased costs. We’ve got to figure out what we can do. I have no idea at this point what we can do to offset those huge increases in inflation. They hit districts really hard because we’re paid based on the number of students, and as you saw earlier the number of students we have is still lower than what it was before COVID.”
As this was a working meeting there were no actions to be taken on the budget, but at the next meeting Johnson will be presenting her projected budget for next year.
In other business, the board:
• Held a brief special meeting to approved the sale of its bus barn in Orr to the city of Orr for $10,000. In return, the district secured the use of one stall in the building for continued use by a bus for 99 years, or until the district determines that a route in the area is no longer needed. The city plans to use the building to house the Orr Ambulance Service, although it may take thousands of dollars and perhaps years to complete the conversion of the structure to suit the service’s needs. Orr officials said they will be seeking federal and/or state grants to fund and facilitate the conversion.
• Discussed reinstating admission fees for the 2022-23 school year. No admission fees have been collected the past two years due to the COVID pandemic, but that has cost the district about $45,000 annually in lost revenues which are needed to support the athletic program. Members noted that a combination of free admission for youngsters and seniors and passes for students, staff and coaches, the impact for district families would be relatively small.
• Discussed reimposition of school meal fees for the 2022-23 school year. Children have received free meals the past two years courtesy of COVID pandemic relief funds designated for that purpose, but the program has expired. Board members will receive and take action on a formal proposal at their next meeting.
• Discussed a proposed purchase agreement submitted by a Cook resident for multiple lots located in Art’s Addition. After much discussion, the board decided that others should be made aware that the land is available by advertising for three weeks in the district’s official newspaper, with the minimum price set at the estimated market value according to county property tax record. Bids will be received for the property.
• Discussed an informal offer from an individual to purchase the bus barn in Cotton for $25,000 to convert for use as a private business. The offer is below the estimated market value of the property, but a stipulation similar to that in Orr that would give the district a long term, cost-free lease for bus storage was determined to be a justifiable offset. Members asked that the item be placed on the next board meeting agenda for formal action.

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