Financial Position Remains Strong

Iowa public school districts' fiscal year runs from July 1 through June 30. Following the end of each fiscal year, we are required to file an annual report with the Iowa Department of Education reporting on our financial status. Because we are governmental entity, we follow Generally Accepted Accounting Principles (GAAP) in order to ensure our reporting is consistent, transparent and comparable. For this reason, even though our fiscal year ends on June 30, we have an approximate 60 day 'hold open' period where, as revenue and expenditures are realized, we have to determine which fiscal year those disclosures need to be accrued. That report is due annually no later than September 15, and we were able to complete and certify the report last week.

Using data from that report, we run a test against 9 separate financial metrics to determine the overall fiscal health of the school district. While useful in the immediacy, it also provides valuable information over time to help us understand trends and take corrective action when necessary. The table below shows the trend over the last decade. I am pleased to report to you that the fiscal health of the Hudson Community School district remains strong. This is due in no small part to our outstanding business office, the governance and oversight structure of our Board of Directors, and the ability to say 'no' when a request doesn't reflect the facts on the ground. It is about fiscal discipline and separating out the 'wants' from the 'needs'. You can read the full analysis under the subheading Basic Financial Data on our school website. 

The district’s overall financial position remains good. One year ago, the primary concern was a decreasing solvency ratio with a cash balance lower than the expected target range. It was further exacerbated by the number of complex special education cases and an increasing special education deficit. The district took corrective action by implementing a cash reserve levy. This has resulted in the stabilization of our solvency position. 

General fund revenue increased by 12.6% or $1,367,305 from FY 2025 to FY 2026. This is due primarily to increases in enrollment. The base enrollment number used for fiscal year ending on June 30, 2026 was measured on October 1, 2024. This represented an increase of 50.85 student over the fall 2023 count; an anomaly that does not appear to be the norm going forward. Other contributing factors include an increase in the cash reserve levy to counterbalance the decline in the solvency ratio and an infusion of TSS (Teacher Salary Supplement) to meet state mandated salary minimums. General fund expenditures grew by 3.7%, coming in at grand total of $11,846,9054. 

The district carries $304,460.29 in restricted funds. These funds are restricted for purposes that are specified under Iowa Law. However, a provision exits to transfer some restricted funds to a flexibility account if the original intent of the restriction has been satisfied. In the case of ‘professional development’ it has. The decrease in the TAG balance is deliberate due to programmatic improvements, whereas the restricted fund balance in preschool is due to a function of how preschool expenditures are a blend between this restricted fund and the special education fund. 

Tax rates for the FY 2026 were 16.69275, up from 16.67884 in FY 2025. The higher rates are directly related to the overall valuation of the school district and efforts to maintain a healthy solvency ratio through the implementation of a cash reserve levy. For the fiscal year that just ended, the district levied $362,590 in CRL. 

The district currently carries long term debt of $20.054 million in varying instruments that is being used to meet the capital project needs of the school district, including updates at both the K-8 attendance center and the 9-12 attendance center. That debt includes $11.650 million of general obligation debt, $1.780 million of physical plant and equipment levy capital notes, and $8.404 million in SAVE, revenue bonds. The final piece of financing for the high school was completed during this fiscal year and as such the debt was structured in a manner that permitted the district to take advantage of market conditions and property valuation growth. These notes are encumbered through our capital funds improvement and debt service funds are therefore not general fund obligations. Further, the district carries short term debt of $574,277.50 (which is included above) to support the connected learning initiative in the district. 

Enrollment projections remain stable for both the short and long term. Projections that were previously indicative of large gains do not appear to be coming to fruition. At least at this point, plans for rapid increases in enrollment will not need to be addressed insofar as adding infrastructure is concerned. Instead, it will be important for the district to manage staffing patterns in relationship to enrollment since employee costs consume 80% of the budget.

The district also realized a decrease in the special education deficit; from $771,671.30 in FY 2025 to $442,276 in FY 2026. This is due primarily to fewer students attending specialized schools and one fewer special education bus route. It is important to also note this area tends to be unstable and fluctuate widely as students with special needs move into and out of the school district. 

Finally, we should take special note of the district’s unspent balance ratio. This is perhaps the most important of all the financial health indicators and one that should be closely monitored and watched. The news here is good, with an increase in this ratio every year since 2011 when the district completed major budget cuts and ended with a balance of $90,971 or 1.29%. In the prevailing years it has grown steadily to $6,580,569 or 35.71% in fiscal year 2026. Like the financial solvency ratio, this puts the district in a good position in light of unpredictable funding from the state. It is important to note that a new state law, effective July 1, 2-26 has put a 35% limitation on the maximum carry forward, so it is anticipated this balance will be throttled back in order to comply with this new mandate. 

The Day the Towers Fell

Author's Note: Today's post was originally published on September 8, 2021 on what was then the 20th anniversary of the 9/11 attack. This year, we mark the 25th anniversary of this horrible day. It has been lightly updated and republished today to reflect that quarter of a century mark. 

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I was backstage at Beckman High School working in the costume shop when the high school principal announced over the PA system that an airplane had struck the World Trade Center. It was a very warm, in fact very beautiful fall day. At first I thought it odd the principal would make such an announcement. The band was outside on the football field working through their drill for the game on Friday night. Truth be told, it was a perfect fall day; and one that would completely unravel. I remember the frantic calls to Ann as the morning unfolded, all while wondering what would happen next as the FAA took the unprecedented step of grounding every aircraft flying over or on the way to the United States. 

We had only been married a couple of years at that point. I still have a picture from our honeymoon, one with Ann sitting on a small ledge when we visited Ellis Island. The Twin Towers framed behind her. That was in August of 1999, a photo that to me has become a treasured, and in my view quite iconic piece of American history.

Each year on this most solemn of days I recall with precision the events of September 11, 2001. At the time I was a vocal music teacher in Dyersville and had first hour prep. Indeed I have vivid memories of where I was and what I was doing when first learning of the attack. As I mentioned above, I was in the costume shop in the theatre department trying to figure out where to put a donation of clothing that we had no intention of ever using. When first hearing the news, I thought it was probably one of those little Cessna's that got off course. At the time none of us knew it was an attack, thinking it must have been some sort of terrible accident. It didn't take long for those benign reasons to fade when I watched in shock as the second plane struck the south tower on live television; and at that precise moment understanding with unequivocal clarity that yes, we were most certainly under attack. And also in that moment unaware that it would get much, much worse when those towers fell. 

Instruction stopped that day. As teachers we worked hard to keep our students calm. They asked questions. How could this happen, we have two oceans protecting us? Is Iowa next? We had no answers.

I am a bit surprised that I can still recall these details with as much clarity as I can. Because it has been 25 years. Twenty-five years! Indeed the years fly by. I was a young man then and the world as it was on September 10th was not the world we would wake up to on September 11th. The fact is, that world no longer exists. All of the students we are serving in our classrooms, and many of them who now work for use don't know what the world was like on September 10, 2001.

In the intervening years as the anniversary approached we would mark the milestones along the way: the year the 9/11 'babies' went to kindergarten. When they graduated. On this 25th year of remembrance I find a couple of things quite striking. First, there is not one student in our school who was even alive on that horrific day. The second, and perhaps more interesting [at least to me] is the generational divide amongst our faculty and staff. More and more of our faculty is made up of those who were too young to recall this event, and in fact there are those who are now teaching in our classrooms who hadn't even born yet. While there were many of us who were busily at work, teaching school and going about our day: a growing number of our ranks were in diapers and blissfully unaware of what was going on around them. 

America's longest war has come to an end. It will be up to history to decide how this chapter of our story is portrayed. But no matter what, we must honor the sacrifices of so many men and women who gave their lives in service. Who vowed to hold those responsible who attacked us. 

As is the case each year, there will be numerous documentaries on television about this day. Some old, some new. If you are too young to remember, please don't scroll past them with your remote. Watch them. Ask one of your colleagues to share their memories of that day. And for those of us who were there, I would encourage you to watch as well. Talk about this day with your students. Its important that we #NeverForget.