Archive for Tuesday, March 24, 2015

Timely bond refinance to help Baldwin district deal with block grant cuts

Baldwin USD 348 Board of Education

Baldwin USD 348 Board of Education

March 24, 2015

Thanks to a timely bond refinancing, the Baldwin school district will see level funding for the next two years with no additional demands on taxpayers.

At the Baldwin school board meeting on Monday, Baldwin Superintendent Paul Dorathy and district financial director Cynde Frick updated the board on the consequences of the school finance block grants that are about to replace the state’s 22-year-old school finance plan. As of Monday, the block grant legislation is now on Gov. Sam Brownback’s desk after having passed both houses of the Legislature with the support of Republican legislative leaders.

Dorathy said details within the block grant legislation changed during the legislative process and from when he spoke three weeks ago to the Signal about the effect on the Baldwin district. But the big picture remains the same in that the district will lose $100,000 in funding from its current year’s operating budget from the block grant legislation. The district would see the same reduction the next two years while the Legislature rewrites the school funding formula unless the board increases the local option budget mill levy for the 2015-2016 and 2016-2017 school years, he said.

Frick said the block grant legislation freezes state general fund aid to the district at this year’s level but eliminates state equalization payments to the local option budgets and capital outlay funds to the state’s less affluent districts. As a result, the block grant legislation failed to provided $92,000 in state aid to the district’s capital outlay fund, which was budgeted into the current year’s budget.

The good news is the district has enough in the LOB’s end-of-year balance to manage the $100,000 shortfall in the current year’s budget, Frick said. The board also has the ability to raise the LOB mill levy when crafting the budgets for the next two school years to make up for the $100,000 reduction in state support of the district’s LOB, she said.

Fortunately for district taxpayers, a bond refinancing the board approved during a special meeting earlier this month will allow the district to reduce the mill levy that supports bond and interest payments enough to offset the increased LOB mill levy, Frick said. That refinancing of 2008 and 2009 construction bonds will save the district $815,000 during a 15-year period by reducing average interest rates from 4.68 percent to 2.75 percent, she said.

That offset will only maintain the funding status quo, and the district will not see any more state aid the next two years to help with its increased costs from such things health insurance, teachers’ salaries or utilities, Dorathy and Frick said. That will require a number of belt-tightening measures and fee increases, they said.

The sale of the Vinland school would save about $4,000 in utilities and the district was looking at joining a pool of other districts to reduce liability and property insurance cost, Frick said. There were also savings to be realized through ending some summer painting projects and reducing seasonal lawn mowing help, cutting back on the supplies list and maintaining a smaller carryover for the school lunch program, she said.

Frick also presented a list of possible fee increases to such things as all-day-kindergarten, drivers education, activity participation, textbooks and in-town busing. The board deferred consideration of any fee increases until its April meeting because of the absence of board members Ivan Huntoon and Sandy Chapman.

The district would also explore dropping activities with low participation. District activities director Gary Stevanus said golf had already been dropped for this spring when only four Baldwin High School students had an interest in participating.

But even as the district adjusts to the block grant program, doubts exist about how long it will be around. Dorathy said there was a strong possibility the Kansas Supreme Court will reject the block grant legislation. A case challenging the state's adequate funding of education is still before the court.

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