Eddyville.Org

We are all familiar with some of the fictional tales of individuals who are granted three magic wishes by a genie, and each wish brings unintended consequences to their lives.   

What is the largest cost to the school with no benefit to the school whatsoever?  This year, the school is paying out $305,030 and next year it will probably be around ($317,140)).  This large expenditure is what the E-B School District pays for 55 public school students who live in this district and open enroll in other districts.  Presently, we are fortunate that this loss is slightly offset by students who live in other school districts and open enroll at E-B.  This could easily change.

If the E-B School System is no longer attractive to other families outside the school district, then we can expect open enrollment into the district to drop.  If other schools outside of this district look more attractive to families within this district, then we can expect open enrollment out of the district to increase. 

If the E-B School System is not as attractive as other schools in this area, then young families with school age kids who are moving to this general area for employment will choose to live in another school district.

Could the present plan of moving the middle school classes from Blakesburg to the north wing of the high school have a detrimental effect on open enrollment?  The older Eddyville alumni who attended junior high when it was at the high school say that it was not a problem for them  While that may be true, others do not believe that 7th and 8th grade kids who are just beginning to enter adolescence should be mixed with high school students.  Just the perception that this mixing of students is harmful will be enough for some parents to enroll their kids in other schools.  Also, if school facilities appear to be crowded, this may be enough for parents to enroll their kids in other schools.  As the saying goes, “perception is everything.”  Also, Blakesburg parents would be more likely to consider enrolling their middle school students in another nearby school district.

This was one of the reasons why the 15-member Cost Savings Committee felt that if the middle school was going to be located at the high school campus, then it should be well planned.  The committee recommended a new and separate building.  This would not be a large building, but it could be expanded, if necessary, in the future.  The building would be large enough to house the basic classrooms for the middle school students with adequate restrooms, locker space, etc.  Other facilities at the high school could be shared – such as the lunch room, gyms, and band room.  The Committee believed that if the middle school was going to be moved, then it should be to a better facility than what presently exists.  The new building could be paid for out of the cash reserve, PPEL and the one-cent state sales tax (these are funds which cannot be used to offset direct education expenses, but can be used for new facilities, renovation or remodeling.  In fact, the Albia school district is improving its school facilities this year to the tune of seven million dollars using PPEL and sales tax money to pay for it over a period of time).

The committee members believe in careful and thoughtful planning.    They believe that a plan made in haste (such as the present plan) with the stated purpose of saving money could have unintended and very costly consequences.   

There is much truth in some old sayings.  Be CAREFUL what you wish for; or “haste makes waste.”

A financial audit report for the City of Eddyville for July 1, 2008- June 30, 2009 was released earlier this year.  Below, I have copied some selected sections from the written Schedule of Findings at the end of the report which I found to be of interest.  If you are interested in figures and familiar with accounting you may want to read the complete report which is 30 pages long. You can go to city hall and ask for a copy or you can find the report on the Iowa State Auditor’s Website:  http://auditor.iowa.gov/reports/0921-0865-C00F.pdf

Part 1:  Findings Related to the Financial Statements:

                SIGNIGICANT DEFICIENCIES:

                I-A-09     Segregation of Duties – One important aspect of internal control is the segregation of duties among

                              employees to prevent an individual employee from handling duties which are incompatible.  The

                              issuance of receipt slips, bank deposits and the posting of the cash receipts to the accounting

                              records are sometimes all done by the same person.

                              Recommendation – We realize with a limited number of office employees, segregation of duties is

                              difficult.  However, the City should review its control procedures to obtain the maximum internal

                              control possible under the circumstances.

                              Response – We will consider this.

                              Conclusion – Response acknowledged.  The City should segregate duties to the extent possible

                              with existing personnel and utilize administrative personnel to provide additional control through

                              review of financial transactions and reports.

                I-B-09     Disaster Funds – The City received a significant amount of disaster funds as a result of flooding in

                              the community which occurred in 2008.  Our review noted that the City is unable to reconcile the

           costs recorded on their general ledger and the equipment usage records, with the costs as recorded

           on the claim forms filed with the Federal Emergency Management Agency (FEMA).  As an

           example, we identified one instance in which it appears that the City received more money from

           FEMA than allowed.  In addition, it appears that we also identified other instances in which the

           City may have received more money from FEMA than allowed.

           Recommendation – The City review the above and take action as necessary.

           Response – FEMA took our records and completed the claim forms.  We assumed that what

             FEMA completed actually reconciled to our records.  However, upon subsequent review by the

           auditor, we realize that what FEMA based their payments on do not exactly reconcile to our

           records.  We are unsure why these records do not reconcile with each other, and we were never

           given an explanation by FEMA as to why these differences exist.  However, we do not think this

           project is closed out yet.  FEMA personnel have told us that the State Emergency Management

           Division will review these records and make adjustments as necessary, and adjust FEMA’s

           payment accordingly at some point in the future.

           Conclusion – Response accepted.

Part II:  Other Findings Related to Required Statutory Reporting:

                II-A-09   Certified Budget – Disbursements during the year ended June 30, 2009 exceeded the amounts

                             budgeted in the culture and recreation and general government functions.  Chapter 384.20 of the

                             Code of Iowa states in part that public monies may not be expended or encumbered except under

                             an annual or continuing appropriation.

          Recommendation – The budget should have been amended in sufficient amounts in accordance

                             with Chapter 384.18 of the Code of Iowa before disbursements were allowed to exceed the

                             budget.   

                             Response – The budget will be amended in the future, if applicable.

                             Conclusion – Response accepted.

                II-D-09    Business Transactions – Business transactions between the City and City officials or employees

                              are detailed as follows:

          The transactions with the Council member may represent a conflict of interest pursuant to

                              Chapter 362.5(10) of the Code of Iowa since total transactions, which were not competitively

                              bid, were more than $2,500 during the fiscal year.

                              Recommendation – To determine the proper disposition of this matter, the City should consult

                              with their Attorney regarding the above potential conflict of interest issue.

                              Response – We will discuss this issue with the City Attorney.

                              Conclusion – Response accepted.

                II-F-09    Council Minutes – Transactions were found that we believe should have been approved in the

           minutes but were not.  Several invoices were not approved by the City Council.  Some City

           Council minutes and related claims were not published in the newspaper.  All of this is required

           by Chapter 372.13(6) of the Code of Iowa.

          Recommendation - The City should implement procedures to ensure that all invoices are

          approved by the City Council.  The City should also implement procedures to ensure all

          invoices and all City Council minutes are published in the newspaper as required by the Code of

          Iowa.

         Response – We Will implement these recommendations.

         Conclusion – Response accepted.

                11-K-09  Miscellaneous – A contract could not be located with the company that hauls the residential

                             garbage in town.  Weight tickets were not always obtained for the purchase of gravel.

                             Recommendation – The City should enter into a contract with the garbage hauler.  In addition,

          weight tickets should be obtained for all gravel purchases.

          Response – We will implement these recommendations.

          Conclusion – Response accepted.

                II-L-09   Cash Management – The City’s system of cash management is in need of improvement.  For the

         past several years, the City has averaged a balance of well over $500,000 in bank accounts

         which pay interest at a rate of .25% or less.  As a result, the City could have earned a significant

         amount of additional bank interest per year if the City would have invested its funds in IPAIT or

         some other investment.

        The City entered into a capital lease which had an interest rate of 13%.  The City had more than

        enough funds to purchase this piece of equipment outright, thereby avoiding the payment of

        interest at 13%.

        Recommendation – The City be more proactive in the management of its cash, including a

        periodic analysis of its investing and financing activities, and determining what is financially in

        the best interest of the City.

        Response – We will review this.

        Conclusion – Response accepted.

In Dr. Cook’s presentation to the school board on March 22, he made the following statement on future building changes:  “Though it has been suggested to build a new MS building, we need to get a better grip on our incoming numbers before those decisions can be addressed.  We do know our numbers continue to decline.  What we don’t know is how quickly these numbers will force us into additional changes.  We are looking at this time to purchase mobile classrooms.  We will continue to look at consolidation as numbers come in.  We would use the north wing of the HS for the MS.  We are cognizant of the challenges faced by MS students as they enter a HS facility, so therefore we are looking at a bell schedule, lunch schedule and we research best practice for this possible transition.”

The Cost Savings Committee members approach or guiding principle in weighing the pros and cons of making certain budget cuts was that they must make sure that the school district will remain attractive to other communities.  They believed that in the long term the school buildings in the district “should be viewed to best position Eddyville-Blakesburg with possible consolidation in the future.”  And they also stated that the E-B school district needed to “be pro-active to make sure we do not become the district (which) is split.”

The Cost Savings Committee believed that if the middle school was going to be moved from Blakesburg to Eddyville, then there should be a new permanent building on the high school campus which would be for the middle school students; and some of the high school facilities would also be shared with the middle school. Dr. Cook believes that instead of a new building, the present high school building should be utilized plus additional mobile unit classrooms should be added in back of the school.   

Which of the above two approaches do you think would be more attractive to outside communities?  Which would be more attractive to families moving to the area?  Which would be more attractive to students from other school districts to open-enroll in our district?  I believe the answer is obvious.  The opposite question would be:  which approach would promote a decrease in enrollment.  Again, I believe the answer is obvious.  In one approach we are likely to gain additional students; and in the other approach, we are likely to lose students.

When we talk of other communities that may want to merge or consolidate their school district with the E-B district, I believe that there is only one adjoining district where that is possible, and that is Fremont.  While we may gain additional students from Fremont, we may also lose students from Blakesburg if the wrong approach is taken.  If the middle school is moved to Eddyville, it needs to be a facility that will attract students to the area.  If the middle school is not attractive, parents of students at both Blakesburg and Fremont have other choices.

I believe the approach that has been taken with the Blakesburg community has been a negative approach or it might be better described as a take it or leave type of approach. The proposal to move the middle school and to crowd the BAC grade school classes into the middle school was not discussed with the community ahead of time.  The Blakesburg parent teacher organization had some good ideas on how to reduce costs, but they were not consulted.

Almost everyone agrees, and this includes Eddyville students and parents, that we presently have a very good middle school.  So if we are going to move the middle school, then it should be to a better facility.  To borrow a phrase from the movie the Field of Dreams:  “If you build it, they will come.”  

How can the E-B School District afford to build a new building when it is trying to reduce its budget?  The school budget is broken down into various funds.  The budget crunch is in the general fund account which deals with direct educational costs and is more or less funded and controlled by the State.  Even though the school has a large cash reserve it cannot spend that money in the general fund area.  However, the money can be spent on facilities – new facilities, major building improvements or infrastructure.  The Albia school district is also experiencing the same type of budget problems with its general fund account, yet they are going ahead with school building improvements worth seven million dollars in construction costs.  State sales tax money is available to fund such projects, and the E-B middle school building would not come close to that amount of money being spent by Albia.  Hmmm, the Albia school system may look very attractive to the Blakesburg community in the next two years.

I am closing this blog with a review or breakdown by school of the present student enrollment in the E-B school district and then projecting the student population for the middle school and high school for the next seven years.  The projection is based on the assumption that there will be no loss or gain of students in the seven year period.

Number of Students by grade – comparison between EEAC, BAC & Fremont

Eddyville-Blakesburg School District

Projected # of MS & HS Students by Year (Based on FY 2009-2010 Enrollment)

It appears that for the fiscal year of 2011-2012, the middle school will have its lowest number of students and the high school will have its lowest number in 2013-2014.  The above numbers were based on the present enrollment remaining the same, but in reality there will be some loses and gains.  Plus I did not account for new students coming into the system at the preschool, kindergarten and 1st grade levels.  I noticed in today's paper that there is an advertisement for preschool students to enroll in the E-B Schools. 

Whatever the school board decides on the important issue of moving the middle school will greatly affect the growth or decline of student enrollment in the Eddyville-Blakesburg School District for the future.  There will be a school board meeting tonight at 6:00 p.m. at the cafeteria in the high school with an open forum to allow public input on the issue of moving the middle school to the high school.

Faced with having to make major cuts in expenditures for the upcoming fiscal year budget of 2010-2011, the E-B school board appointed a 15-member Cost Savings Committee to review all the district’s expenditures and to find possible savings which would have a minimal negative effect on the present quality of education.   The committee was a fairly diverse group with respected members from both the communities of Eddyville and Blakesburg as well as a couple of school administrators, teachers, and a union representative.  I was particularly impressed with Susan Bayer, the school board secretary and Scott Williamson, the high school principal, who both explained the school budget, the different funding accounts and the major expenditures.  They were both very knowledgeable and did an outstanding job in their presentations and in educating the members of the committee who were not familiar with the complex school budget process.  Scott Williamson repeated several times throughout his presentation and in latter discussions that he believed in “transparency” and wanted everything to be out in the open and available to the committee. 

Faced with the challenge of having to reduce the budget by hundreds of thousands of dollars, the committee did a remarkable job and came up with many cost-cutting options.  The committee members did not feel it was their responsibility to recommend which options to implement, and left most of those decisions to the school board.  However, when it came to the five options for the realignment of classes and/or the moving of the middle school, the committee did rank the options by what they considered the most favorable to the least favorable.  I think the committee did a very good job and they deserve our thanks for devoting their time and effort to the difficult task they were assigned.  

The school district’s budget for fiscal year 2010-2011 was approved by the school board at its meeting on March 22 at the Blakesburg Middle School.  It could be said that the budget was based on the worst case scenario – that the state’s 10% across the board cut would remain in effect for the coming school year and that there may be further reductions ahead.  (Although, as of today which is supposed to be the last day of the state legislative session, it appears some of the state funding and allowable growth for schools will be renewed).   

After the budget was approved at the last school board meeting, Dr. Dean Cook, the School Superintendent, gave a presentation on the “District Building Alignment.”  He proposed moving the middle school in Blakesburg to the north wing of the high school at the end of this school year.  (In my opinion, Dr. Cook has done a good job, overall, in the fiscal management of the school district – he brought it from being in the red six years ago to the very positive balance of today with a large cash reserve an unspent balance.  As with the budget, he had to consider the worst case scenario and felt that he had to take immediate action by moving the middle school almost right away).

Both Dr. Cook and the Cost Savings Committee have proposed moving the middle school to the high school.  But their proposals were diametrically opposed as to how and when to make the move.  In considering this issue, the Committee felt it would be better to take it slower, consider all the factors and, if necessary, plan the move in a more orderly manner.  Committee member Brian Chambers agreed that significant reductions had to be made in the budget, but they shouldn’t be made all at once.  He felt the State was going to have to help the school districts with some of their funding.  Committee member Ron Shafer emphasized the importance of keeping the district attractive so that people with school children would want to move here and also that the district would attract open enrollments from other districts. Scott Williamson did not feel that having the middle school classrooms in the main high school building would be a good situation because of the difference in age groups.  Others did not feel having the middle school classroom in the mobile buildings behind the school would be appropriate.

Of the five options for realigning classes in the district, the Cost Saving Committee gave its highest favorability rating for moving the middle school to the high school, BUT on the condition that there should be a new facility for the middle school students along with planning for the long term building needs of the district.  If this condition was not included in such a move, then the committee’s rating would fall to its second lowest favorability rating.  The five options listed in the committee’s report are, as follows:

*Rating scale 1 to 5 with 5 being the most favorable and 1 the least favorable.

In the committee’s report to the school board there was this statement:

“(The) committee believes that buildings should be viewed to best position Eddyville-Blakesburg with possible consolidations in the future.  How do we attract communities to see our district as attractive?  Be pro-active to make sure we do not become the district who is split.”

To be continued, tomorrow.