Financial Metrics for the District Remain Strong

School corporations in Iowa operate a fiscal year that runs from July 1 to June 30. As such, we have completed our end of year financial report. I am pleased to report the financial position of the school district remains strong due to both enrollment growth and disciplined budgeting practices employed by the Board of Directors. 

General fund revenue increased by 5.8% or $579,337 from FY 2023 to FY 2024. Most of this came from state provided resources, or state aid, which showed a 14.8% increase over FY 2023. This, along with a modest 1.4% increase in locally sourced revenue can be attributed to enrollment growth. The increase in revenue is notable, particularly when compared to a loss of $340,652 in federal funds, which were allocated in FY 2023 specifically targeted to address to the COVID pandemic. Our cash reserve remains full even though our fund balance has dropped by $144,714. While our solvency ratio remains above the targeted benchmark, the trend is moving downward. For this reason, it would be wise to begin implementing a cash reserve levy to avoid a precipitous drop in the future. General fund expenditures grew by 7.4%, coming in at grand total of $10,638,306. Our rate of general fund expenditure growth is due to hiring additional personnel related to enrollment growth.

The district carries $313,777 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 was 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. 

As alluded to above, our solvency ratio is trending downward from 24.12% in FY 2021 to 16.82% in FY 2024. Although this metric remains strong (the benchmark is 10%), the downward trend should continue to be monitored and a cash reserve levy should be implemented in effort to stabilize the trendline. As a direct measure of cash on hand, it is important to carry a healthy fund balance since these funds are used to fund operations over the summer when there is no revenue coming into the district. Furthermore, costs associated with special education continue to trend upward and are somewhat prone to volatile swings that sometimes come with unpredictable and transient enrollment patterns. 

Tax rates for the FY 2024 budget year were 15.82823, up from 13.31578 in FY 2023. This increase in rate is due to the passage of a general obligation bond rate in September of 2022 of 2.700000 for the renovation, remodeling, and addition to the high school. 

The district currently carries long term debt of $17.425 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 $9.35 million of general obligation debt, $3.94 million in Revenue Bond Anticipation Notes, $876,945 in PPEL Capital Note Projects, $1.84 million in general obligation bonds (Series 2024), and $1.44 million in general obligation bond notes (BAN). It is anticipated this debt will be restructured on a timeline that permits the district to take advantage of current market conditions and property valuation growth. These notes are encumbered through our capital funds improvement funding stream and through our debt service funds and are therefore not general fund obligations. At the same time, the district carries short term debt of  $574,277.50 that originates in the PPEL fund to fund computer devices that support the district’s connected learning initiative. 

Enrollment projections remain strong both the short and long term. The increase in 15 pupils during the year can largely be attributed to open enrollment. These trends are likely to continue in light of a recent change in open enrollment laws in the State of Iowa. Further, the City of Hudson continues to grow at a steady pace with multiple housing additions currently in development. Barring any unforeseen changes, the District will need to plan for rapid enrollment growth in the next half decade.

The district employs a 9 point test to gauge the overall health of the school district. Of those nine measures, none is more important than the unspent balance ratio, which has been trending upward since 2011. It has continued to grow steadily to $5,343,874 or 33.44% in the fiscal year just ended. This provides the district with continued stability in  light of unpredictable funding from the state. 

While we won't spend time to discuss every measure here, I will offer just a few highlights. 

As has been mentioned in previous blog posts in the past, school operations are very labor intensive enterprises and as such, personnel costs take the lions share of the budget. You'll note that for fiscal year 2024, 80% of our budget was expended on personnel costs. The target for this ratio is 80%.

Transportation costs are a ratio that hardly gets a mention. While we encompass almost 60 square miles, comparatively speaking, our geographical footprint is quite small. This is evidenced by the fact that our transportation costs were limited to just 3%. The target for this ratio is 5%. 

'Day's Net Cash' assumes expenditures are even over the course of the school year (which they are not), and then calculates how long the district could maintain operations without the infusion of cash. Over the summer months, school districts have a 90 day period where there is no revenue stream. Our current DNCR is 92, which means in theory the district would have enough cash on hand for a 92 day period. Note in the table above this ratio has been decreasing over the last five years, which is directly related to the solvency ratio which is discussed above. Indeed those two are closely related!

The full report can be found on the About Us page of our website.  

Tackling Attendance

During the COVID pandemic, attendance policies were relaxed around the country. Anytime someone had a runny nose or at the first signs of a cold, they were sent home. These policies were designed to keep everyone safe and healthy. At that time, we didn't really have a good understanding of how this illness was spread. Nor did we fully grasp the toll that would be paid from the isolation caused by long absences from school. As a result, regular school attendance suffered. Unfortunately it continues to be a challenge to this day. 

Indeed, we were not immune to this phenomenon at Hudson. Just like schools all around the state and nation, we have struggled with attendance post COVID. Think about this: during the 2023-2024 school year nearly 17% of our students were classified as 'chronically absent'. Are you surprised? I certainly was when I ran the statistic!

It is time to right the ship. We know that regular and consistent attendance matter. Regular attendance in school allows students to keep up with school work and participate in class discussions. It leads to better grades and overall academic performance. Missing school, particularly in early grades disrupts learning fundamental skills in reading, writing, and math. Oftentimes these foundational skills build on one another. Without that strong foundation, gaps in learning will become even more pronounced in later grade levels leading to frustration. Studies show that students with poor attendance are at greater risk of dropping out of school.

Regular attendance at school enables children to interact with peers, build friendships, and solve problems by developing important social skills like cooperation and communication. It also helps to form the habits and routines that are critical for future success in work and life. It teaches responsibility and time management. There is no doubt that students with good attendance are likely to graduate from high school and pursue further education or careers. 

This year, the Iowa legislature passed a new law centered on tackling attendance and absenteeism in schools. As such, schools are now required to sharpen our focus on school attendance. The school board is poised to take final action on our policies and procedures to ensure they conform with state law. What does this mean? Here are a few highlights:

Chronically Absent=10%
By state law, a student is identified as being chronically absent if they are absent for 10% of the scheduled days of school during the reporting period, and it doesn't matter what reason the student is absent (sans exceptions listed in Board Policy 501.3). Consider this: a quarter is roughly 45 days in length. If a student misses more than 4 days in that quarter, we are now required by law to provide notice to the student, parents and the county attorney.

School Engagement Meeting=15%
Hopefully the notification outlined above corrects the issue. But if it doesn't and the student reaches an absentee rate of 15% during the reporting period, the law now requires the school to convene a mandatory school engagement meeting with the student, parent, and school official. During that engagement meeting, the goal is to understand the reason for the absences and to develop a plan to improve attendance. We are required to monitor the plan weekly and report to the county attorney if the plan is violated.

Truancy=20%
It is the goal of the new law, and the district to ensure that students are not truant. Truancy is defined by law as any child of compulsory age who is absent from school for any reason for at least 20% of the days in a quarter. Students who have met the truancy threshold will be reported to the county attorney. 

Please understand the aforementioned designations become effective regardless of the reason a child is absent from school, unless otherwise exempted. Board Policy 501.3, which is the governing policy on compulsory attendance provides those reasons that may be exempted.

Students who are absent from school without a reasonable excuse as determined by the principal, are subject to disciplinary action. Our building principals are given a wide berth for determining the appropriate measures based on a system of progressive sanctions ranging from detention, to Saturday school and even being declared ineligible for extra-curricular activities. Please refer to administrative regulation 501.9R1 for details. 

Our hope is sanctions are never necessary and that the school engagement meeting is a rare occurrence. Our wish is to be partners with parents in this goal of ensuring students have the tools to be successful not only in school, but later on in life. This begins with regular school attendance. If you have any questions about these policies, please reach out to your child's principal.

Where Do We Go From Here?

Yesterday morning, all our parents received an invitation to complete a needs assessment survey. Likewise, that same survey link was posted on our Facebook page, and we are inviting our high school students to provide their feedback this week. Your feedback and input is important to us and will be used as one of many data points as we update our strategic plan. Our most current iteration was completed in 2019 and subsequently adopted by the board in May of that year. Typically, a district strategic plan encapsulates a five year span, and as such we are a bit overdue. However, there are a couple of important caveats that suggest now is the time to update this plan. First, the current plan was adopted in the spring of 2019. Remember 2019? The emergence of COVID-19. In a lot of ways, that set us back. Second, we have been undergoing major construction. Construction that had in many ways been borne from recommendations posed in our strategic plan. 

So as you contemplate this survey, let's take stock of how we got here by looking at the progress that has been made from our last strategic plan. Then, with your help we can decide where we go from here!

The first recommendation asked the district to consider any improvements that could be made to the hot lunch program. At that time, we were just beginning our relationship with Opaa! as our contracted food service company. Long considered a weak spot as identified across multiple constituency groups, poor quality menus with few options were contributing factors to low lunch counts. Five years later, it would appear the metrics are all headed in the right direction. Further, the program has continued to increase the participation rate, which has had a positive impact on the revenue that is generated by the program. We have been able to re-invest those revenue in our program by replacing the primary equipment in both main kitchens. This has allowed the staff greater flexibility in meal preparation and menu design.

Building security and safety was also identified as an area ripe for improvement. At that time, the main entrance to the elementary was highlighted as a 'blind entrance'. In the interim, Phase III of the elementary renovation was completed, rendering this issue moot. Even so, the district went much further to improve the safety and security of our buildings. The fact that all our buildings have been 'locked down' for a number of years, we have gotten much better at controlled access and the ability to monitor our system. Our key fob system enables us to monitor who is accessing the building, at what time, and where. Each exterior door is also equipped with sensors, alerting administration if a door is not properly secured via text message. In addition to this, the district was awarded a $100,000 grant to upgrade our surveillance system with a new camera system, which we anticipate will be fully operational this fall. And finally, perhaps most significant is the fact we have been able to partner with the City of Hudson to hire and employee a full time SRO (School Resource Officer).

The number one area identified for improvement by our students was restrooms and locker rooms. Granted, our locker rooms adjacent to the wresting room are in the basement and no matter what we do, they are still locker rooms in a basement! However, we were able to do quite a bit of cosmetic work to make them a bit more comfortable, namely new floor coverings and a paint job. Likewise, the restrooms right across from what, prior to this school year, has been known as the competition gym received the same treatment. If that were all, we could probably state that we addressed this issue as outlined by our strategic plan. But we went much further! All of the restrooms in middle school and high school have been completely remodeled. If you haven't seen the restrooms in the high school yet, I'll let you be the judge of how they turned out. The new competition gym, which isn't scheduled to open until October, will also feature brand new state of the art varsity locker rooms; with an adjoining training room. 

Parents, particularly those of high school age asked the district to consider how well we prepare our students for college, career, and life. To address this recommendation we have significantly expanded our course offerings. As a starting point, our district now requires students to take a financial literacy course as a condition for graduation. Yes, the state adopted a law requiring financial literacy to be offered as a component of the curriculum (many districts embed this learning in existing courses). But we went further by adding a stand alone course-and requiring it! That is not the only addition to the course catalog. Since the adoption of this strategic plan, the district now employs full time instructors in four fully sequenced career and technical education areas. Because the district had been in a declining enrollment period for so long, the resources weren't available to employ these instructors full time, leading to constant turnover and an inability to sustain progress in these areas. Indeed, it has been long before my tenure the district has been able to fully fund these programs. Coupled with the CEO (career exploration opportunity) in the business department and the launching of CAPS in the spring of 2025, we have made tremendous strides with this recommendation.

Finally, a recommendation was posed that asked the district to 'eliminate outdated spaces'. Specifically, the debate at the time centered around the utility of stand alone computer labs. As we had been providing 1:1 devices to all our students for a number of years, the question was asked: what purpose to these spaces serve? So, computer labs were eliminated and the rooms transitioned to instructional space. It would prove to be a wise choice. This year, the two rooms in question are now being used as 5th grade classrooms! Our evaluation of, and elimination of outdated spaces didn't stop there. The high school library, long considered a very underutilized space, was also remodeled. Now, the former library has been re-imagined as 3 classrooms; serving our math department and an 'all purpose' room that currently hosts college classes and as a meeting room for our teachers. The high school library? Well, it has been moved to a much smaller space right across from the FCS room. Designed as a satellite library, it offers a comfortable and flexible space for our students to relax, hang out, or study.

I'm proud of the progress we've made as a school district! The fact that we are able to provide clear examples of how recommendations borne from data collected from our last needs assessment survey is a testament to how important your voice is in this process. Our assessment will only be open two weeks. Please take the opportunity to provide us with your input as we begin to formulate the next great chapter of Hudson Schools. Hudson 2025!