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North Butler Community Schools turns around its financial shortfall, Superintendent says

Joel Foster
Joel Foster

GREENE, IOWA – The Superintendent of the North Butler School District says the dire financial situation there has been turned around.

According to a newsletter he sent this past week:

The end of the fiscal year (FY) for school districts is June 30th. After the end of the school year, we are required to submit what is known as the Certified Annual Report (CAR) to the Department of Education prior to September 15th of that year. As I am sure most of you are aware by now, the school district uses several different funds. The General Fund is usually the focus of attention as that is where the majority of our operating costs including personnel come from.

On June 30th, 2014, the district finished FY 14 with an unspent balance of -$213,773. Having a negative unspent balance is a problem for a school district. It means that you spent more than the state allows, and that you spent more than you took in.

North Butler Middle School in Greene ( photo)
North Butler Middle School in Greene
( photo)

At the end of FY 15, we were able to raise that unspent balance to $281,949. We were also able to raise other financial indicators that we follow to determine the financial health of the school district, such as the day’s net cash ratio (measures the length of time a school could operate without any income in case of emergency) and the financial solvency ratio (one of the measures the state looks at).

On June 30th, 2016, or the end of FY 16, North Butler Community Schools had an estimated Unspent Authorized Budget (unspent balance) of $618,912. This moved us to a day’s net cash ratio of 88 days (close to the target of 90), an unspent balance ratio of 8.42% (within the target range of 7.5%-10%), and a financial solvency ratio of 8.71% (within the target range of 5-10%).

As you can see by the figures above, North Butler Community Schools has improved our financial situation over the past few fiscal years as a result of some very difficult decisions that have been made by the board of education. It is clear that the board’s decisions are moving us in the right direction to recover from the past financial problems and will also ease the pain of a large loss in student population over the last several years.

When we measure our future revenues, we will receive roughly $6591 per student for FY 17 (the current FY). Over the past two years, North Butler Community Schools have seen a decline of roughly 55 students, 39 for FY16, and roughly 15-17 for the current year (count day is October 1st). If we multiply that, we are looking at a decrease in funding of roughly $362, 505. Due to what is called a budget guarantee, we will not lose all of that money at one time. The budget guarantee is a mechanism in the Iowa school finance formula that helps lessen the impact of declining enrollment in schools.

What does the declining enrollment mean for North Butler Community Schools? First, it means that we will have to continue to carefully monitor and code expenditures. Secondly, due to the way that we are currently operating, we have aligned ourselves to be in a much better position to absorb the loss of students. We have built some cushion or cash reserves to ease that blow, but we will need to cut some costs and continue to carefully monitor spending.

Even though we will be losing large amounts of revenue, the sky is not falling. We now have a secure financial footing, and North Butler will be financially solvent into the future. We will be able to support the things that our magnificent teaching staff is doing and the many opportunities that we are able to offer our students in academics, athletics, and the fine arts due to the many talents of our staff.

I am VERY PROUD of who we are and what we do at North Butler Community Schools, and our communities should be proud of the support they give us and the things that our staff and students accomplish on a daily basis! It’s Great To Be A Bearcat!!!

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