PRESCOTT – The electorate approved the projected, balanced Prescott School District budget for 2021-22 at the Sept. 15 school board annual meeting, which should result in taxpayers seeing $50 less …
PRESCOTT – The electorate approved the projected, balanced Prescott School District budget for 2021-22 at the Sept. 15 school board annual meeting, which should result in taxpayers seeing $50 less on the school portion of their tax bills for a $100,000 home.
Debby Brunette, from Baird Financial, explained how the annual budget works. She has been serving as PSD’s interim business official since May 2021.
The budget presented is the district’s estimated operational budget for 2021-22. The district does not receive its final state aid numbers until Oct. 15, so the budget will be formally adopted by the school board at its October meeting.
The projected mil rate is 50 cents less than 2020-21, which is great news, Brunette said. Last year’s mil rate was $10.72. This year’s is projected to be around $10.23, which means on a $100,000 property, a taxpayer will pay $1,023 for the school portion of taxes, rather than $1,072. This is more in line with mil rates from 2009-11, Brunette said.
The projected revenue limit ($5.76 million Fund 10, $381,065 Fund 38) covers things such as salaries, benefits, utilities and insurance, Brunette said. The referendum debt in this year’s budget totals $3,428,417, while Community Service needs (Community Education and Prescott Community Rec) total $150,000. Add these together for a balanced budget of $9,755,485.
According to Brunette, the state revenue limit, adopted in 1993, plus per-pupil categorical aid, controls more than 90 percent of the district’s operating revenue. The aim each year is to have a slight budget surplus rather than deficit. When the district starts the fiscal year (in July) with a balanced budget, typically it ends the year with a slight surplus, which can be added to the fund balance.
Even with money added to the fund balance (Prescott’s is currently $5.65 million), an improved bond rating, eliminating the need to short-term borrow for cash flow problems, and putting money in Fund 46 (a capital improvement plan savings account), districts can’t save up enough for capital projects.
“With revenue constraints (imposed by the state), we just can’t save that kind of money amount in the amount of time we need it,” Brunette said.
The state began allowing districts to save for facility needs eight years ago, when Fund 46 came about. Prescott began its Fund 46 four years ago and has saved up $1 million. However, the state requires the district to have a 10year plan; money spent must be for items on that list, which can be found in any August school board agenda. The state also requires the district wait five years from the fund’s inception to spend any money. PSD can draw from Fund 46 in August 2022.
Fund 46 cannot be used to pre-pay voter-approved referendum debt, by state law.
Up until three or four years ago, PSD had to take out mid-year short-term loans to have enough on hand to cover cash flow (such as paying salaries). This was to bridge the gap between the time state funds and local taxes are received to covering weekly expenses. Thanks to sound fiscal management, PSD no longer has to do that, Brunette said. The more a district pre-pays its debt, the more aid the state provides, which is a favorable snowball effect.
The Third Friday Count, which occurred Friday, Sept. 17, is a driver in the state revenue formula. Student enrollment, in a nutshell, determines how much aid the district will receive (plus per-pupil categorical aid). The district turns enrollment into the state by Oct. 1, at which time it should receive its equalization (property) value.
Clifton resident Joe Rohl asked if the district can hold a levy cap referendum rather than a facilities referendum, in order to increase the tax levied, adding those extra funds to Fund 46 to finance the needed maintenance. Brunette said that’s possible and the district has explored every avenue possible.
The audience unanimously approved Resolution A – Adoption of tax levy, which is $9,755,485 for 2021-22. This includes operating expenses of $5,796,003, non-referendum debt of $381,065, referendum debt service of $3,428,417 and community service of $150,000.
The electorate approved school board salaries at $2,000 per year. They were last adjusted in 2019 from $1,800. Before that, they had stayed stagnant since 1990. Prescott School Board is among the lowest paid school boards in the Middle Border Conference.
“Most of us on the board really don’t care and I don’t mean that in a disparaging way,” School Board Vice President Steve Sizemore said. “When I ran in 2014 for school board, I didn’t even know it was a paid position.”
The audience also approved resolutions to cover school board members’ expenses for professional development and allow the school board to set the 2022 annual meeting date before the third Wednesday in October 2022.