West Sioux approves property tax levy rate

West Sioux School District Board of Education president Gary Witt listens as superintendent Steve Grond delves into the meaning of budget guarantee for the school district next year.

HAWARDEN—The West Sioux School Board of Education approved a its tax levy rate at a special board meeting Wednesday evening, March 31.

After a public hearing, the board approved a property tax levy was set at $17.17659 per taxable $1,000 — a rate in line what the school has approved for nearly a decade.

Of the proposed $17.17659, most is designated for the general fund, at $13.28990. Another $2.21669 will go toward the district’s management fund and a total of $1.67 will go toward the district’s physical plant and equipment levy.

“It’s interesting to see where our rate has been set over time, specifically the last 10 years have seen a relatively flat trend,” said West Sioux business manager Jake Vanderham. “In fact, the average rate over the last 10 years is 17.168 per $1,000, which is almost exactly where we’re proposing to set the rate for this year.

“We’ve done a nice job keeping our levy rate consistent and reasonable but also meeting our financial needs as a district.”

The school’s tax rate is only a portion of a property owners’ total property taxes. The remaining portion of the property tax bill comes from levies set by the city of Hawarden, the Sioux County Board of Supervisors and the Northwest Iowa Community College Board of Trustees.

Vanderham explained that a portion of the general fund levy goes toward the $445,000 in the cash reserve line item.

“That’s comparatively lower than what we’ve done in the past,” he said, noting it was about $200,000 less than the current fiscal year budget. “We’re at a point were we felt comfortable with decreasing that levy to where we can maintain that level of reserve and don’t need to quite build it up so much. I feel good about where the general fund is at.”

Vanderham said the management levy funds are used for the district’s property insurance premium, break-fix insurance premium and early retirement program along with some smaller miscellaneous things.

“I would like to say I appreciate the work that was done to keep it within our rolling average as we prepare for things coming up,” said school board president Gary Witt. “It’s nice to be constant and I think people appreciate that.”

The board approved the levy 4-0.

The school board also unanimously approved a budget guarantee resolution as part of its special meeting last Wednesday.

The budget guarantee is a funding mechanism that uses property taxes to aid schools when supplemental state aid doesn’t keep up with decreased enrollment. Schools refer to this as the 101 percent guarantee.

As a practical matter, this means when supplemental state aid doesn’t keep up with a decrease in enrollment, the school district is guaranteed an increase of at least 1 percent above the previous year’s regular program district cost without that guarantee. Regular program district cost is calculated by multiplying the number of certified students by the district cost per pupil.

The cost per pupil will rise 2.6 percent for next fiscal year.

“Though having less students is going to have a negative impact, over the course of that last few years the district has done a good job of building up the unspent balance,” said district superintendent Steve Grond “That helps even out those situations.”

He added that the school should also be able to utilize the Elementary & Secondary School Emergency Relief Funds next year. The ESSER funds were created out of the Coronavirus Response and Relief Supplemental Appropriations Act signed into Iowa law Dec. 27, 2020. According to the Iowa Department of Education, the purpose of this supplemental relief is to prevent, prepare for and respond to coronavirus. Districts will have the flexibility to use the ESSER funds on any “activity authorized by the Elementary and Secondary Education Act,” including assessments, instructional materials, software, hardware, professional development, connectivity, teacher pay and summer-school activities.

“We’re looking at different ways of using that,” said Grond, noting that it will be a one-time dollar amount and that the district will need to spend it and be reimbursed for the cost. “Having those funds is a cushion for next year.”

The budget may need closer adjustment in years to follow if student enrollment continues to decline.

“West Sioux has done a good job of being financially responsible and building up cash reserve,” Grond said. “Over the course of the next three, four, five years, some of that might erode. That’s not a bad thing; just like any budget you set aside rainy day funds. Like a farmer knowing that not every year can be a bummer crop, they set aside funds in those really good years for those bad years; it’s same with school districts, that if you manage your finances well you can eliminate the ups and downs as much as possible.”