The Superior Express -

Small steps are starting to happen! The South Central Nebraska Unified District No. 5 voted at the September 2022 board meeting to not renew the current Unification Agreement. It is set to expire on Aug. 31, 2024. This past January, they hired me to oversee and help them navigate this de-unification and prepare both districts to be independent districts again, beginning with the 2024-25 school years. There are many things that need to be done to prepare for this. Road Map - The De-Unification of the SCUD No. 5 is arguably the first of its kind in the state of Nebraska. There is no “playbook” to follow, no one to reach out to for advice on how they accomplished it. As superintendent, I have promised our teaching staff we will keep this work as far away from their classroom as possible so they can continue to focus on their teaching. We have developed a Road Map for our work that must happen this school year. This Road Map is also meant to give everyone a visual that we can use to track our progress. I would like to share this Road Map with our patrons as well. Here are some highlights of the key milestones as we begin our journey:

September - Adopt the budget and “split the budget” so we can make adjustments heading into the following year and not be surprised by the unexpected.

November - SPED Programming will be the focus as we develop a “Plan A & a Plan B” for special education programming for the new, independent districts in the 2024-25 school year. The BOEs will decide which is best…continue with a “shared program” or each develop their own programs. - Each district will decide what they want as a administrative model…independent superintendent or superintendent-principal combo or continue with a shared superintendent -Begin teacher negotiations as independent associations

December - Identify the staffing plan for each district so we can be in front of the hiring season.

January - Many of the technology pieces should be finalized.

February -Adopt new district calendars for the 2024-25 school years

March and April - Complete new handbooks and adopt new board policies for the new school year.

Summer 2024 - Complete the final details for each district.

September 2024 - Begin the first year as two, independent school districts Budget Update - We can successfully that off of our Road Map as done! At the September BOE meeting, we adopted the budget for this year. At the meeting, we had a couple of concerned patrons address the board and express concerns about the Levy and also the cash reserves the district has. I believe in transparency and I would like to update our patrons about our budget and some of the budgeting processes.

I mentioned to the BOE, during part of my presentation, that I do not play the “Levy Rate” game. By that I mean, the levy rate goes up or down, depending on the district’s property valuation and the amount of property taxes we are requesting. The most important aspect of taxes to focus on, in my opinion, is the “Tax Request” or “how much money” is the district requesting from its taxpayers. Here is a brief overview:

Levy Rate - This is usually expressed in dollars or cents. For example, our 2023-24 levy rate is $0.721615. Which is a little more than 6 cents lower than last year’s rate of $0.785438. So, we reduced our Levy Rate by more than 8 percent. Oftentimes, school districts get called out when they brag about “lowering their district’s levy rate,” all the while, they are still increasing everyone’s taxes! That is because the levy rate is just a mechanism to access the amount of money the district is requesting.

The levy rate is multiplied with the patron’s property value. So, the formula is: Levy Rate • Property Value = the amount of taxes you pay.

We could lower the Levy Rate and people’s taxes could still go up. Even though our Levy Rate is decreasing, some people’s taxes will still increase. That is because their property value may have increased more than our Levy Rate decreased. We have heard stories of some property values increasing as much as 40 percent! Unfortunately, we would not be able to lower our Levy Rate enough to help them to pay fewer taxes.

However, with that said, we did lower our Levy Rate by 8 percent, so if someone’s value stayed the same, or increased just a little, they should be paying fewer taxes as a result.

Property Valuation - Schools have no control over someone’s property value. Let me repeat that, schools have no control over someone’s property value. The county assessor determines the property value of all the property in the county (land and buildings). This year, many residential values increased a ton. This follows several years of Ag land values increasing significantly during the last 10 years or so. Our district’s property valuation increased more than 7 percent.

As a result of our property values increasing, if we had kept our Levy Rate the same as last year, everyone’s taxes would have still gone up, simply because their value increased. This is why I do not like to shout, “Hey! Look at us, we lowered our Levy!” Because, you can lower your levy and everyone’s taxes could still go up.

Tax Request - To me, this is the most important piece. The Tax Request is the actual amount of money the district is requesting in taxes. With this budget, our Tax Request was lowered around $179,000.00. In 2022-23, the district requested $11,719,002.00 from its patrons. This year, that amount was reduced to $11,539,596.00. So we can honestly say that our Tax Request, or the amount of dollars we are requesting, was reduced! Now, some individual’s taxes may still increase, but we have done our part in trying to lessen that burden for them.

When we are determining our budget, we project what our expenses will be and we try to project what our “non tax” revenue will be and the last piece of the puzzle is “how much tax” do we need to ask for to balance it out. As a “non-equalized district,” we do not receive state equalization aid, so most of our revenue comes from our patrons, in the form of property taxes.

This year, we were fortunate to receive the new “Foundation Aid.” We are set to receive $1,000,000.00 of this new aid. This allowed us to lower our tax request. We were not able to lower our tax request by a million dollars, but we were able to lower it as much as we could.

Why? As we head into our last year as a Unified District, there are going to be increased costs that we typically do not have. We need to project enough needs to be sure our budget can cover those needs adequately. Hopefully, we will be in a better position next year to reduce our tax requests again. But we believe our expenses and our revenues are matched well enough so that our cash reserves can remain strong.

Cash Reserves - This is another very important factor to consider in a school’s budget. As a district that relies heavily on property taxes to pay our bills, we need a strong cash reserve to withstand the “ebb and flow” of our revenue. Taxes are generally paid about three (3) times a year. We have to pay our bills twelve (12) times a year. So we need to have cash reserves on hand to pay when we do not have that revenue coming in. It is recommended to have three to six month’s (3-6) worth of reserves on hand. With the budget we adopted, we are projecting to have a little more than four (4) month’s worth of cash reserves. Each month’s bills are estimated to be about $1.3 million dollars. This is why our cash reserves need to be strong.

I hope this helps you understand a little better the budgetary process. As we continue on our journey this year, I hope to provide you with the regular update on our progress.