Mount Vernon Schools will be looking at the district’s health insurance costs and at other potential savings at a Thursday, March 7 school board meeting.
Mount Vernon superintendent Greg Batenhorst noted that the five-year projections for students in the district have been softer than expected.
“For the past several years, the five-year projections have predicted that the district would see a downward trend in key financial indicators for a few years before experiencing a trend upward,” Batenhorst said. “These predictions have largely been predicated on the assumption that the district would eventually see growth in its resident student enrollment. However, it has become more apparent this year while engaging in the annual budgeting process that predictions of increased resident student enrollment have not come to fruition. While the district’s overall enrollment has shown modest increases for the past several years, especially given the continued positive trend with students open enrolling into the district, the resident student enrollment has remained flat or slowly decreased.”
Schools derive a lot of financial funding from the number of resident students who are attending the district they reside in, which in turn impacts the general fund for the district.
Inflationary expenses that have been seen have also had an impact on the school’s budget. As Batenhorst noted, Supplemental State Aid has not provided enough money to keep up with the expenses of the district, especially to salaries and benefits of staff.
Batenhorst said there were several reasons that the financial projections of the district have not seen the growth expected:
1. Flat to decreasing resident student enrollment than what was predicted.
2. Supplemental State Aid (SSA) amounts that have not matched inflation and the overall needs of students for districts across the state of Iowa.
3. Inflation over the past several years has impacted the amount the district has paid for basic services.
4. The District’s health insurance benefit plan and structure has presented unique challenges, and has become a greater burden on the district’s finances.
5. Some unanticipated payroll expenses over the past three years have contributed to creating greater stress for the district’s finances.
6. Lack of substantive new commercial development in the Mount Vernon community that would enhance the district’s assessed valuation and ability to raise more money to support programs.
7. New housing, while a welcome addition to the community, is not on as quick of a pace in development as was anticipated in budget planning over the past several years. Fewer school age family members have filled the new homes than what was expected in the school’s projections.
Batenhorst said the district needs to focus on savings and efficiencies within its budget to remain in a positive financial position for the future.
Batenhorst said that the district will be reviewing the health insurance options for staff, which would go into effect for the coming fiscal year beginning July 1, 2024.
Other efficiencies and savings for the district will also be reviewed by the school board at the meeting.
“You may recall that the district engaged in similar work in 2020 when it identified $170,000 in savings,” Batenhorst said. “As was the case in 2020, the district will study all possible avenues for efficiencies and savings while doing all it can to maintain the quality of its programs. The district is also keeping an eye on numerous uncertainties with the future of school finance in Iowa, as the impact of private school vouchers and tax cuts may impact the finances of school districts across the state in the near future.”
Batenhorst also said that the fund being impacted most is the general fund, which covers the majority of human resources, curriculum and programming expenses for the district.
“Other funds like those related to facilities are separate, and have no impact on the general fund,” Batenhorst said. “As a rule, money in facilities’ funds may not be moved to the general fund and vice versa. Thus, nothing that has happened previously, or will happen in the future, with the construction and upkeep of facilities has any impact on the general fund.”
Batenhorst said that the finances for the district are currently solid, and the district has positive yearly audit reports, so this was the district looking ahead for coming years and adjusting to enrollment projections that have not happened.
“School districts, just like families and businesses, experience times when it is necessary to look at ways to save money to enhance the overall financial outlook for the future,” Batenhorst said. “This is one of those times for the Mount Vernon Community School District, and we will work diligently to provide the great educational experience the community has come to expect, while remaining financially responsible while doing so.”