C.F. Schools Project $1.5 Million Budget Shortfall

January 13, 2010

 Iowa’s budget morass could leave the Cedar Falls Community School District more than $1.5 million in the hole for 2011.

Superintendent David Stoakes said tax hikes and layoffs are possible in each of three budget scenarios presented to the Board of Education Monday.

But if the stars align, the district can come out of this year relatively unscathed. In the worst-case scenario, all employee groups and programs could face cuts, Stoakes said.

"We’re positioned as well as any district in the state to make it through the next few years," Stoakes said. "But it is still going to be difficult."

All three options assume the restoration of this year’s state-imposed 10 percent across-the-board cut totaling $2 million.

All three scenarios include insurance premium increase estimates as high as 20 percent and a 4 percent package increase, totaling about $1.2 million, for employee groups whose contracts are up for negotiation. They also take into account increased utility and transportation costs.

Should the Legislature:

Hold itself to the 2 percent allowable growth increase promised to districts last year, Cedar Falls would still be about $514,000 short in the spending authority needed to make it through the year. If the Legislature opts to allow for the 2 percent increase, but does not fund it with state dollars, the district could make up the difference with a tax increase or cash reserves.

Reduce allowable growth to 0 percent the district would face a $1 million shortfall.

Reduce allowable growth to a -2 percent, a 4 percent decrease from what districts were promised, the schools would be about $1.5 million short.

"Right now, we need to plan for that $1.5 million deficit," Stoakes said. "Then, as those missing pieces begin to fall into place, our insurance premiums, allowable growth, our contract settlements, hopefully we can back away from that number."

But, board member Jim Kenyon said the district should also be prepared should the state decide not to backfill the $2 million taken during this fiscal year, which legislators have said is a dis tinct possibility.

While usually increased enrollment is a bonus during the budget planning months, the extra costs associated with educating and transporting those students could become problematic as the district looks to make cuts. This year’s kindergarten class is the largest in the district and next year’s doesn’t look to be any smaller. Doug Nefzger, director of business affairs, said the additional students could push the district to add up to two new bus routes.

However, Stoakes said they may have to look at changing their standards for who qualifies to ride the bus if the budget situation warrants. Currently elementary students living more than one mile and secondary students living more than two miles from the school can be bused. That may be increased to state standards of two miles for elementary and three miles for secondary in 2011.

Stoakes said the district is also considering a retirement incentive plan.

More detailed budget cuts will not be announced until later this spring, Stoakes said.