Wednesday, September 3, 2014

PPEL Fund and Maintenance

For the past several weeks, we have been discussing the various legislative priorities that the Board has identified for the next General Assembly which is set to begin in January of 2014. To recap where we have been, I would encourage you to read the posts related to the importance of the legislature setting supplemental state aid in a timely manner, support for the continued development of rigorous content standards, early intervention in reading literacy (specific to the block grant), quality professional development, and last week we discussed the idea that socioeconomic status should be used as an identifier for At Risk funding. Today we finally come to the end of this series explaining the legislative platform for the next general session with a discussion surrounding the uses of PPEL funding. 

PPEL is an acronym for the Physical Plant and Equipment Levy and was re-authorized by the voters of the Hudson Community School District during the September 2013 school board election. It is also a categorical funding stream, which means that it can only be used for specified purposes. School district budgets are comprised of many different types of categorical funding, some categorical funding is part of the general fund and becomes part of spending authority, while others are funds unto themselves, like the PPEL. The good thing about categorical funds is that they are limited in their function, and are done so in an effort to protect the integrity of what the funds are designed for. One great example of this can be found in a categorical fund known as the Teacher Salary Supplement. As the name implies, this fund can only be used for teacher salaries. 

The bad thing about categorical funds are that they are often times inflexible. One such example are appropriate uses of the PPEL fund. Generally speaking, this fund is designed to pay for the replacement and emergency repair of equipment. It can also be used to purchase equipment such as automobiles, school buses, desks and chairs for classrooms, computers, new roofs for school buildings, remodeling classrooms, and a whole host of other things. You might be scratching your head right now thinking, categorical? That is quite a list of items that certainly doesn't sound inflexible. 

Here is where it gets a little interesting. Last winter one of our school buses blew an engine on the way to a middle school athletic event. To replace the engine would have cost somewhere in the vicinity of $20,000. Sounds like an emergency repair that would be PPEL eligible wouldn't it? Well, its not. In this case, the new engine for a bus does not qualify as a PPEL expenditure. Now, we could have paid for the engine out of the General Fund-but Iowa School Finance 101 tells us it is foolhardy to pay for these types of expenditures from this fund because of our commitment to protecting spending authority. 

What could we have done with our PPEL fund in this case? Well, we could have bought a new bus. A new bus of that design would have cost roughly $65,000. So the question really asks us what makes more economic sense. To replace an engine at $20,000 (the rest of the bus was in perfectly good shape), or buy a new bus at $65,000. If we could have purchased the engine from the PPEL fund, it would have been an easy decision. I'll let you guess what that decision would have been!

For that reason, we support legislation that permits the use of PPEL funds for the maintenance and repair of transportation equipment.

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