RV proposing 5.322 mill increase

The Royal Valley Board of Education is proposing a 5.322 mill increase for its 2016-2017 school budget to help offset a reduction in state aid due to the block grant budget formula. 

At a special board meeting Monday evening, board members agreed to propose a budget that includes 47.877 mills, which is up from last year’s 42.555 mills. For the 2013-2014 school year, the district’s budget was generated utilizing 52.905 mills.

The new proposed budget includes levying 20 mills for the general fund, 19.877 mills for the Local Option Budget (LOB) and 8 mills for capital outlay. 

The LOB is locally funded and is calculated at a percentage of state financial aid. Last year, the district levied 14.555 mills for the LOB and 30.405 mills were levied for the 2013-2014 school year.  

Superintendent John Rundle explained to the board that the district was able to decrease the local mill levy last year due to the ruling of the Gannon vs. the State of Kansas court case, which required the state of Kansas to provide equity in state aid for the LOB. To provide that equity, the state fully funded the LOB as opposed to prorating the funds under 100 percent. In the past, the LOB was prorated at 78 percent. With the change to the block grant budget formula, LOB state aid is capped and once again prorated at the local level for the 2016 fiscal year. 

“With that equity no longer in place this year because of the new block grant, five mills of the LOB are now passed back to the taxpayer,” Rundle said. 

The district’s assessed valuation has increased slightly from the past year. For the new school term, the assessed valuation has been set at $30,131,036, which is up from $28,932,645.

“This is a positive, and it helps with the mill levy, but it won’t offset the other changes,” Rundle said. 

Rundle pointed out that the proposed budget includes $9,185,775 in estimated general operating expenditures for the new school year, which is up $2.5 million from last year. The increase is due to several changes made at the state level.

“I want to be very clear that the increase is only because of changes made in law this year on what is run through the general fund,” Rundle said. 

Supplemental general state aid, capital outlay state aid and KPERS (Kansas Public Employees Retirement System) are now included in the district’s general fund. Together, those items are an additional $2,431,717 now being run through the general fund: $1,626,881 for supplemental general state aid, $700,679 in KPERS aid and $104,157 in capital outlay state aid. 

“Basically these funds are passing through the general fund now before they are distributed,” he said.

By running these items through the general fund first, board members said it looks like the state is giving the district more funding, when it is not.

“It has an appearance that is deceiving,” Rundle said.

 Rundle said that the district never spends all the funds budgeted. The district’s new total maximum budget authority, which includes the increases to the general fund, has been set at $17,156,039. Last year, it was $13,842,167.

“You always budget for more expenditures than you have so you don’t have to republish the budget,” he said.

The total local taxes levied for the coming year are proposed at $1,374,013 compared to $1,163,225 last school year. 

The district is paying off $3,040,000 in lease purchase principal, which is down from last year’s $3,375,000. 

The board agreed to publish the proposed budget and set a hearing date for 8 p.m. Monday, Aug. 10, at the district office in Mayetta.

The full budget can be viewed on page 10 of today’s edition.

In other business, the board:

* Approved a motion to purchase the district office and storage buildings from Karla Grau at a cost of $65,593.38. 

The district entered into a lease purchase agreement with Grau in 1999 for the district office and surrounding storage buildings, and it was set to paid off in 2019.

Board members, however, agreed to purchase the building this summer in order to save the district an estimated $20,000 over the next four years, it was reported. 

Board members agreed to allow Pat Tuck, board president, to sign off on the contract in the next month. 

* Approved the ratification of the district health insurance agreement that includes the district paying $410 per month per employee. Employees have three options for health plans. 

* Adjourned the meeting at 7:50 p.m. Board members Ann Kelly and Jeff Stithem were absent.