Bloomfield school board to advertise budget; take other financial actions

On Thursday night, the Bloomfield Board of School Trustees agreed to advertise its 2011 budget, Capital Projects Plan and Bus Replacement plan in the Aug. 6 and Aug. 13 editions of the Greene County Daily World. The district will conduct a public hearing on the proposals Aug. 26 as part of the regular board meeting.

Final budget adoptions are slated for Sept. 16.

"This is a normal July board meeting agenda item," superintendent Dan Sichting said.

The proposed 2011 budget levy is $3,219,844 for all of the funds -- a $126,210 increase over the current year's advertised levy.

This includes: $753,451 in Debt Service, $1,370,794 in Capital Projects, $539,896 in Transportation, $340,043 in School Bus Replacement and $206,660 in Retirement/Pension Bond Debt Service.

By comparison, the advertised 2010 levy amounts were: Debt service, $981,855; Capital Projects $1,076,108; Transportation, $700,174; School Bus Replacement $136,008; Retirement/Pension Bond Debt Service $199,449.

Superintendent Dan Sichting explained that the levy amount is generally advertised at a higher dollar figure to protect the maximum levy.

"Bloomfield School District should have some idea of the amount of our rates after the Department of Local Government Finance reviews our budget in the fall," he told the board.

Sichting pointed to the impact that HEA 1001 -- which capped the amount of property taxes that homeowners will pay at 1 percent of the assessed valuation of the home or property -- has had on Indiana public school finances.

Additionally, homeowners were given a new credit in 2010 that "drastically reduced the taxable value of their home," according to Sichting.

He projected the district will lose $37,000 as a direct result of HB 1001.

The superintendent also noted that the budget had taken a big hit from the reductions in state assistance called for by Gov. Mitch Daniels, which has caused a reduction of $512,209 from the Bloomfield school budget.

The board took some actions at Thursday's meeting to help with the budget.

The board adopted a Debt Service Fund resolution that moves $205,178.78 remaining in the 1986 Trust Indenture when the high school was constructed.

The district made its last payment on the high school construction project in January. After the last payment was made a balance remained.

"The statute requires the proceeds to be deposited in the Debt Service Fund or Capital Projects Fund," Sichting stated.

The board then passed another resolution that moved the $205,178.78 from the Debt Service Fund to the school's Rainy Day Fund.

The board approved a resolution to shift a portion of the cost of contracted bus services to the Bus Replacement Fund for the 2011 budget.

"School districts in Indiana were given the flexibility to begin raising a portion of contracted transportation costs from the Bus Replacement fund with the 2007 budget," Sichting said. "The Transportation Fund was a levy driven fund with increases in full costs outpacing the normal annual adjustment in the transportation levy. Prior to the availability of this flexibility, Bloomfield School District was transferring money from other funds to make up this shortfall in the Transportation Fund ... fuel costs tend to be very unstable and can change rapidly due to world events or weather events."

Sichting pointed out without passage of the resolution the deficit would be about $95,000 in the fund.

He added, "It's the right thing to do. Fuel prices will go up."

The superintendent also informed the board that the district had received a check for $10,0516.85 from the Greene County Auditor's office as a distribution from the HEA1001-2007 Reconciliation of 2008 Property Tax Replacement Credit and Homestead Credit Distribution.

These funds will be applied to reduce the property tax obligations for district taxpayers for the Transportation Fund levy -- slightly reducing the fund for the 2011 budget cycle.

"It is important for taxpayers to understand the levy decrease will be for one year and will result in a substantial increase in 2012," Sichting told the board.

A CLOSER LOOK AT SCHOOL BUDGETS

There are seven budgeted school funds

GENERAL FUND: The General Fund is used to budget and account for all receipts and expenditures for current operational purposes, except pupil transportation. Expenditures from this fund may be made for items normally associated with the daily operation of school, such as salaries, benefits, utilities, supplies, etc.

DEBT SERVICE FUND: The Debt Service Fund is used to budget and account for receipts and expenditures necessary to meet annual, long-term obligations of a school corporation. Expenditures from this fund may be used to make bond and/or lease rental payments, repay loans made for the purchase of school buses, and state construction loan repayments. Interest on loans taken for the purpose of any other fund can be paid from this fund. For taxation purposes, this fund is only used when long-term debt actually exists.

CAPITAL PROJECTS FUND: The Capital Projects Fund was established by the 1987 General Assembly. The Capital Projects Fund may be used for the following: Land acquisition and development; fees for professional services; educational specification development; building acquisition; construction and improvements; rental of buildings and equipment; purchase of mobile or fixed equipment; maintenance of equipment; salaries of computer repair personnel; and salaries and benefits of skilled trades employees (if total cost exceeds $600,000 per year).

TRANSPORTATION FUNDS: The Transportation Fund was established by the 1979 General Assembly. This fund is used for all operating costs related to pupil transportation, plus the purchase of school buses. In 2001 the fund was split into two funds, a Transportation Operating Fund and a Bus Replacement Fund.

RETIREMENT/SEVERANCE BOND FUND: This is a tax that authorizes a school corporation to issue bonds for the purpose of paying the cost of implementing solutions to contractual retirement and severance liability. Bonds for this purpose may be issued one time only. The bonds must be reasonably expected to reduce the un-funded contractual liability for retirement or severance payments. The amount of the bonds, when combined with any other outstanding general obligation bonds, may not exceed 2% of the total assessed valuation of property in the school corporation. Each year that a debt service levy is required to pay principal of and interest on the bonds, the Capital Projects Fund or the Transportation Fund, or both, must be reduced in an amount equal to the levy needed for debt service on the bonds.

Sources of Revenue

Practically all public school revenues are derived directly or indirectly from some taxing vehicle. Dollars for state support to local public schools are appropriated by the General Assembly from the General Fund of the state. Revenues to the state's General Fund include monies generated by sales and use taxes, the individual income tax, and corporate income taxes. These three taxes account for more than 85% of the total revenue to the state's General Fund.

Locally, various forms of taxation are utilized to generate monies for schools and for civic units of government. The local taxes are charged, collected, and provided to the governmental units in a more direct way than state revenues. Examples of local taxes charged include the property tax, license excise tax, and financial institution tax. Other sources of income are non-taxed items including receipts from transfer tuition, property sales, gifts, contributions, and earnings from investments.

PROPERTY TAX: The property tax represents the largest local revenue generator for governmental units. The tax is charged against real and personal property. Locally elected assessors determine property valuations utilizing appraisal guides prescribed by the Department of Local Government Finance.

LICENSE EXCISE TAX: Vehicles are taxed locally at the time of annual license plate registration. Revenues from this tax are divided in each taxing district, in the proportion of a particular fund tax rate, to the total of all taxing unit tax rates in the taxing district.

FINANCIAL INSTITUTION TAX: This is a tax on the personal property of banks.

Property Tax Limitations

A property tax levy limit exists for the Transportation Operating Fund. A rate limit exists for the Capital Projects Fund. The Debt Service Fund levy and rate must provide enough revenue to meet the annual debt payments of the school corporation. The Transportation Operating Fund is limited to the average increase in assessed value during the prior three years.