The Iowa Appeals Board voted June 3 to reduce the management levy by more than $185,000 of the newly reorganized Van Buren County CSD school board from $500,000 to $314,316, which is the amount the district projects to spend in the next fiscal year.
The appeals board, made up of the director of the department of management, David Roederer, state auditor, Rob Sand and state treasurer, Michael L. Fitzgerald, said that the Van Buren County CSD was wrong in using the management levy to stabilize tax rates in the future as one of its goals for the levy. The appeals board reduced the levy to $314,319, which is the district’s projected need.
A group of petitioners had asked the board to reduce the levy to $196,000, which would give the same ending balance, based on the figures presented at the budget hearing.
A hearing was held May 15 at the Roberts Memorial Center before a panel consisting of Luke Donahe, investment officer, office of the state treasurer, John Parker, school finance, department of management and Kathy Ruppe, manager, office of the state auditor.
Petitioners and representatives of the Van Buren County CSD presented their case at the May 15 hearing. Dennis Gratz represented the petitioners and Superintendent Dr. Pam Ewell, school business officer, Pam Morrissey, and school board member, Dan Smith, were the primary spokespersons for the school district.
The hearing’s purpose was to gather information to present to the appeals board on June 3.
The objections from the petitioners focused on the published need of expenditures in the management fund and the projected ending fund balance in the fund.
The district had claimed that there were unknown costs as the district started reorganization July 1, 2019.
The district had proposed a management levy in the amount of $1 million and the school board reduced it to $500,000 because of concerns raised by district patrons. The district administration said that the increase of the management levy to $1.17310 per thousand dollars of taxable valuation would not only meet the current needs of the district, but would also serve as a tool to stabilize tax rates once reorganization incentives are phased off.
However, the appeals board pointed to Iowa Code, which gives only six allowable purposes for the management levy, and decided to reduce the management levy to the stated estimated expenses for the next fiscal year.
“In 2017, Iowa school districts were granted statutory Home Rule, meaning they are now allowed to take actions not expressly disallowed by the state legislature. Previously, school districts could only take those actions expressly allowed by the state legislature,” the board stated in its ruling.
“Iowa Code 298.4 creates and describes a school district’s management levy. It states that such a levy shall be expended only for the following purposes and then lists six allowable purposes. Those six purposes are specific. No matter how construed, they cannot reasonably be read to include as an allowable use of a management levy efforts to stabilize tax rates over a period of years. The management fund is use regulated and not rate regulated. Those uses, even under Home Rule, do not include stabilization of tax rates.”
“The district projects a need of $314,319 in the management levy for FY2020. Based on the information provided by the parties involved and the Iowa Code, the State Appeal Board orders a decrease of $185,684 from the Management Levy for a total levy o $314,316 for FY2020.
The Van Buren County Farm Bureau said it “applauded” the decision.
Their statement read: “The Van Buren County Farm Bureau recently appealed the Van Buren County Community School District’s budget over concerns with their Management Levy Rate. This levy is specific in its uses and does not affect teacher salaries or educational opportunities for students.
“The State Appeal Board unanimously passed a reduction of $185,864 which will make the tax asking equal to the school’s budgeted expenditures for FY20. “We are pleased with the decision of the State Appeals Board,” said Cale Plowman. “We feel it’s the responsibility of the Van Buren County Farm Bureau to be an advocate for the property tax payers of Van Buren County, our goal is that this experience helps us create a positive relationship with the new school board.”
The school district was asked for comment on the decision. Superintendent Dr. Pam Ewell had not responded by June 10.