On September 10, voters of the Hudson Community School District will have the opportunity to go to the polls to renew the PPEL (Physical Plant and Equipment Levy). The fact that this is a renewal is a very important distinction. The district has had the PPEL in place for a long time and it continues to be a critical component of our budget. State law requires renewal of the PPEL every decade, and that renewal is upon us. A vote to renew the PPEL will not increase your property taxes. Without the PPEL, many facility upgrades and the purchase of equipment would not be possible.
So how does the PPEL fit into the whole budget picture? It is sometimes helpful to imagine the budget as several 'buckets' that are categorized for different types of expenditures. The PPEL is a revenue stream that is part of a larger fund know as the Capital Projects Fund.
The Hudson Community School District published a budget for the fiscal year that began on July 1, 2013 (FY 14) of $11,317,264. The sum of multiple funds (think buckets) make up that total. The largest piece of the budget is know as the General Fund (or Operating Fund) and is around $7,000,000. This fund is used primarily for the instructional program. Items such as teachers salaries and textbooks are great examples of appropriate expenditures for this fund.
In addition to the General Fund, there are several other funds that make up the budget including the Activity Fund, Management Fund, Capital Projects Fund, Debt Service Fund, Enterprise Fund, Health/Dental Fund, and Nutrition Fund. The revenue in these funds are restricted and categorical, meaning that the money can only be used for very specific purposes. An easy example is the Nutrition Fund: the revenue generated for this Fund must be used only for the operation of the Hot Lunch Program.
Another important fund is the Capital Projects Fund, and within that fund there are two separate sources of revenue. One is the Sales Tax, which generates approximately $500,000 a year. The other is the PPEL (Physical Plant and Equipment Levy), which generates approximately $250,000 a year. All of the revenue generated for the Capital Projects Fund is categorical in nature and can only be used for very specific purposes. As a general rule, most projects that are related to the repair or replacement of buildings and equipment can be paid for out of this fund, while items related to instruction and salary cannot be paid through the Capital Projects Fund.
As you can probably imagine with an operation the size of a school district, we are constantly replacing equipment, completing facilities upgrades, or purchasing new vehicles. Without the Capital Projects Fund, those items would have to be funded through the General Fund. So while instructional materials can't be funded through the Capital Project Fund, repair and replacement of equipment can be funded through the General Fund.
A few years back, the district went through a pretty significant budget reduction. That reduction was isolated to the General Fund and our budget challenge was centered around a concept known as 'Spending Authority'. The priority was to reduce General Fund expenditures, and to this day we continue to closely monitor the General Fund. Our General Fund is in a lot better shape today because of the discipline we continue to exhibit when it comes to spending habits.
However if the Capital Projects Fund were to disappear or if the funding were to dry up, many of those projects would either be eliminated, delayed, or shifted to the General Fund. None of which seem to be a very good option considering the fiscal progress that we have made the last several years. Replacing school buses and computers can only be delayed for so long before they become just too costly to maintain or too outdated to function properly (stop in sometime and I will tell you the story about bus #3).
If you have done the math in this article, then you know that the Capital Projects Fund generates approximately $750,000 annually. Without the PPEL, we can expect that fund to be cut by about one-third. This would have a negative effect on our strategic plan (Hudson 2020) for facilities upgrades, the purchase of computers, and the replacement of fleet vehicles.
Please remember to vote September 10.
So how does the PPEL fit into the whole budget picture? It is sometimes helpful to imagine the budget as several 'buckets' that are categorized for different types of expenditures. The PPEL is a revenue stream that is part of a larger fund know as the Capital Projects Fund.
The Hudson Community School District published a budget for the fiscal year that began on July 1, 2013 (FY 14) of $11,317,264. The sum of multiple funds (think buckets) make up that total. The largest piece of the budget is know as the General Fund (or Operating Fund) and is around $7,000,000. This fund is used primarily for the instructional program. Items such as teachers salaries and textbooks are great examples of appropriate expenditures for this fund.
In addition to the General Fund, there are several other funds that make up the budget including the Activity Fund, Management Fund, Capital Projects Fund, Debt Service Fund, Enterprise Fund, Health/Dental Fund, and Nutrition Fund. The revenue in these funds are restricted and categorical, meaning that the money can only be used for very specific purposes. An easy example is the Nutrition Fund: the revenue generated for this Fund must be used only for the operation of the Hot Lunch Program.
Another important fund is the Capital Projects Fund, and within that fund there are two separate sources of revenue. One is the Sales Tax, which generates approximately $500,000 a year. The other is the PPEL (Physical Plant and Equipment Levy), which generates approximately $250,000 a year. All of the revenue generated for the Capital Projects Fund is categorical in nature and can only be used for very specific purposes. As a general rule, most projects that are related to the repair or replacement of buildings and equipment can be paid for out of this fund, while items related to instruction and salary cannot be paid through the Capital Projects Fund.
As you can probably imagine with an operation the size of a school district, we are constantly replacing equipment, completing facilities upgrades, or purchasing new vehicles. Without the Capital Projects Fund, those items would have to be funded through the General Fund. So while instructional materials can't be funded through the Capital Project Fund, repair and replacement of equipment can be funded through the General Fund.
A few years back, the district went through a pretty significant budget reduction. That reduction was isolated to the General Fund and our budget challenge was centered around a concept known as 'Spending Authority'. The priority was to reduce General Fund expenditures, and to this day we continue to closely monitor the General Fund. Our General Fund is in a lot better shape today because of the discipline we continue to exhibit when it comes to spending habits.
However if the Capital Projects Fund were to disappear or if the funding were to dry up, many of those projects would either be eliminated, delayed, or shifted to the General Fund. None of which seem to be a very good option considering the fiscal progress that we have made the last several years. Replacing school buses and computers can only be delayed for so long before they become just too costly to maintain or too outdated to function properly (stop in sometime and I will tell you the story about bus #3).
If you have done the math in this article, then you know that the Capital Projects Fund generates approximately $750,000 annually. Without the PPEL, we can expect that fund to be cut by about one-third. This would have a negative effect on our strategic plan (Hudson 2020) for facilities upgrades, the purchase of computers, and the replacement of fleet vehicles.
Please remember to vote September 10.
No comments:
Post a Comment