Losing the Plotline

At best I am three degrees removed from the classroom. To provide a bit of perspective, oftentimes visitors to our office can have a hard time reconciling the fact we are even in a school. My day to day work experience may find me buried in spreadsheets, signing purchase orders, answering email or arguing with a vendor on the phone. I may be in a meeting hearing from direct reports, facilitating a debate, or planning for future building use. Perhaps there is a disciplinary issue that needs to be addressed with an employee. Or, at other times, I may find myself balancing whether or not it makes sense to put a new transmission in a school bus or just buy a new school bus. Over the winter, I monitor market trends to determine the best time to purchase bulk natural gas. Then in the spring we consider health trends and how best to manage our PBM. Budgets. Buses. Buildings. Benefits. I would imagine this list of tasks and responsibilities would lead few to conclude these are in the wheelhouse of a school superintendent. 

When studying to become a superintendent, there is this utopian idea of a concept known as instructional leadership. By definition, this is someone who is prioritizing what is happening inside the classrooms. Focusing on the quality of instruction and the effectiveness of curriculum. The professional growth and development of teachers. Sure, from a macro level I can make that argument. But what is happening in 5th grade this week? I can't help you with that. Those attributes are more closely situated within the scope of what our principals do on a daily basis. There was a time not to many years back when, at the beginning of the school year I would offer platitudes to our new teachers that they would see me on a regular basis, in their classrooms and hallways. I'd start out OK, but it didn't take long before a crisis with the HVAC system would scramble the schedule.

Now, I'm not saying all this to complain. Quite the contrary. I knew what I was getting into and find the work incredibly satisfying and rewarding. I know that if a question or problem comes across my desk, no one else has been able to solve it (that's not to say every solution I've come up with may be popular-or even right). The point is that, admittedly, it is easy to lose the plotline from the chair I currently occupy. I can get so wrapped up in the spreadsheet on my screen I forget, that at this very instant a lightbulb moment happened in first grade. A student who finally mastered place value, or adding and subtracting within 10. Or the magic in agricultural mechanics, when the student has figured out with a great deal of satisfaction just the right touch needed to ensure a consistent and strong weld bead. 

We're at the point in our school year where a bit of perspective and introspection is helpful; if not for you, perhaps me? You see, in the fall we set the stage for the year that is about to unfold. Here we hold all of our hopes, dreams, and aspirations for the students that are preparing to walk through the doors with dreams of their own. Very soon thereafter, reality sets in and the daily grind takes over. Before we know it, we are in the throes of winter and what I often refer to as the 'long stretch'. Now, the long stretch is over. Our days of cold, wet, and downright unpleasantness are beginning to wane. Days of warm sunshine are replacing the cold and dark of winter. It's springtime in Iowa-now it may not really feel like it today, but trust me. Warmer days are in the forecast. 

But more importantly, before our very eyes a transformation is taking place inside our schools. You see, also at the beginning of the school year, I have the 'You have one job' speech with our employees. Turn the students in your classrooms into 3rd graders....and so on down the line. Now that we are through the banality of the beginning of the school year and the long stretch is in our rearview mirrors, I can see it. Those 2nd graders? Well, they are starting to look an awful lot like 3rd graders. 

As for me? Well I was able to pick up the plotline again over this last weekend. On Saturday night I was able to attend the jazz cafe concert. Embarrassingly, it was the first music concert I was able to attend this year. Then on Sunday afternoon, I treated myself to a performance of the spring play and speech showcase. Folks, I was blown away by the performances of our students. Yet it was more than those singular capstone performances that impressed me. It was also a recognition of the journey these students had been on over the course of this school year. Mrs. Ramsey and Mr. Stover articulated it best when they recognized the fact that these students had been working together in rehearsal since as early as November. Even more enlightening was the commitment that was shown over the course of multiple years when both directors talked about the impact their seniors have made on the program.

As we move through this spring, marching steadily toward summer, there will be ample opportunities for all of us to make sure we don't lose the plot. I encourage all of us to make sure we take full advantage of these moments. It is in the concerts, inductions into National Honor Society, classroom presentations, and athletic events to come, where we have the chance to remember why we are here. 

The Consequence of Responsibility

When I arrived in 2010, this district was in trouble financially. At the end of that first fiscal year, we had an unspent balance of just $90,971. Without context, that may seem to be a pretty meaningless number so let me try and fill in the blanks. The trouble is, when trying to estimate the balance sheets leading up to the close out of the fiscal year, it is part science and part art. I usually give the board a target number with the caveat that we'll be within $100,000 on either side of the target. So then, ending with $90,971 on the right side of the ledger that first year was lucky; and essentially a rounding error. Needless to say, we had to implement some pretty austere budget reductions in order to right the ship. That meant reductions in force, elimination of some programs, and the consolidation of others. I'll always remember those public meetings in the middle school auditorium, and of course a board meeting the following August when we had kindergarten parents stacked like cordwood in the boardroom when we had two sections of kindergarten: 29 and 28 students in each. It was not great, but we had no choice and had to hold the line.

You see, in Iowa it is illegal to overspend the maximum authorized budget. To be clear though, I am not talking about deficit spending. Deficit spending in a fiscal year simply means the district has dipped into their reserves, or unspent authorized balance. Every once in a while deficit spending isn't a problem, so long as the decision maker is aware that each year of deficit spending will result in the deterioration of unspent balance. Exhausting all of your spending authority is a big deal. It can lead to an automatic reduction an equal amount the following year, a state mandated 'work out' plan, and a Phase II fiscal review under the administration of the Iowa Department of Education. But the ultimate penalty is loss of accreditation, which effectively dissolves the school district. Has it happened before? You better believe it, and not all that long ago. In 2018 the Davenport Community School District was placed under state oversight because of financial problems. In fact, they just regained local control in 2022. More recently, the Orient-Macksburg school district will officially dissolve on July 1, 2026. 

I have argued, and will continue to do so until the day I retire that the single most important financial metric in Iowa public schools is the unspent balance ratio. If it goes sideways, it is the only one that can close you down. That, coupled with the challenges we had at the beginning of my tenure have made made me, well....particularly sensitive to this metric. That is why we have been so careful and diligent in our budgeting practice and execution. That is why we file for ever class action that we can in order to preserve and recapture any spending authority that we are authorized to under Iowa law. I am proud to say that we are on track to close fiscal year 2026 with an unspent balance approaching $6.2 million (+/-$100,000). At the same time we have been able to fund and add programs, provide fair compensation to our employees, and ensure that our facilities are well maintained and cared for. We've done so through a disciplined approach and responsible stewardship of our taxpayer resources. Unfortunately it appears some of that hard work is in jeopardy. 

And not because of anything we have done. It is because the lastest property tax proposal from the House will limit the unspent authorized budget carry forward for the next budget year to no more than 35% of the prior year expenditures. Now, for perspective this is what I anticipate the next five years of UAB will look like: 

This is what happens when the formula is changed: 

Granted, this is all based on projections and A LOT can happen in the interim.  But these are our known variables at this time, and mathematically defendable. If this change were implemented, the sum loss of spending authority over the next five years in Hudson Schools could exceed $9.8 million. Now, part of the argument that is being made is that school districts are sitting on too much unspent balance. Perhaps that argument has some merit. If it does the follow up question must be, who should be the arbiter of how much is too much? The fact is that the only way to drive this metric down would be to either not claim authority that is allowed by statute (which, frankly I would view as irresponsible), or to increase expenditures. We can increase expenditures. But that would seems counterproductive, seeing that the whole point is to lower property taxes. To me, it seems wholly appropriate to carry a large reserve fund simply because of all the volatility we are experiencing-from quite literally everywhere! It is an insurance policy meant to combat those years when deficit spending may be necessary, or to deal with a sudden drop in enrollment caused by changes in state law or economic stagnation and recession.

If the idea is property tax reform, I think there may be a disconnect. You see, not all of that unspent balance is backed by cash and can't be. In our case, we are only backfilling about $900,000 of our authority with cash in order to maintain our solvency ratio. We could fund more, but are not, precisely because of property tax sensitivity. Even so, there is already a circuit breaker in place to limit the levy. Our ability to generate revenue is limited to 20% of the total general fund expenditures from two years ago. Now, that has created some other problems that are unique to a school district that has experienced rapid growth over the last two years, but we have been able to manage. The point is, we couldn't fully fund the unspent balance if we wanted to because we have one hand tied behind our backs with the statutory limitations currently in place. Throttling back a districts ability to capture spending authority then, will not impact property taxes-because the statutory governor placed on the cash reserve levy already does that.

What it will do though is further erode a school districts ability to respond to unplanned anomalies, which are becoming more and more common in this era of volatile enrollment swings-also due to recent legislative changes. I don't know. It kind of feels like we are being punished for being responsible.