Falls City Public Schools is working through a financial challenge that developed over several years. I believe it is important for our community to understand how we got here, what we are doing now, and where we are headed.
Our current financial situation was not caused by one decision or one budget year. Over several years, ongoing expenses were higher than ongoing revenue. The projected financial impact from 2023-2024 through 2026-2027 is about $3.62 million.
Several factors contributed to this. Personnel costs make up about 86% of our General Fund budget. Costs for health insurance, transportation, utilities, maintenance, and other operations have also increased.
At the same time, Local Effort Rate funding declined from about $8.6 million in 2022-2023 to an estimated $5 million in 2025-2026. The District also used cash reserves over time to maintain staffing, programs, and services for students.
We are now working to correct this imbalance.
Immediate Stabilization
The first step is to restore enough cash to meet payroll and daily operating expenses.
During the recovery period, the District plans to use the maximum allowable 6% annual property tax request authority. Asking taxpayers for additional support is significant, and we do not take it lightly. However, our recovery plan must address both sides of the budget. We need to control spending while also improving revenue.
The Board is also expected to consider approximately $3.5 million in Tax Anticipation Notes (TANs) in September, with issuance expected in October.
A TAN is a short-term loan against future revenue. It will provide cash for payroll and daily operations while the District waits for property taxes and other revenue to arrive. It will also allow the District to repay approximately $700,000 owed to the Special Building Fund from a temporary interfund loan.
The TAN is not a permanent solution. It gives us time to stabilize our finances while the rest of the recovery plan takes effect.
Repay and Rebuild
Borrowing and additional revenue alone will not solve the problem. We must continue to control spending.
The District has already made spending reductions that have improved our financial outlook. We will continue to look for savings, delay major purchases when possible, seek grants, and carefully manage available funds.
Because of the progress already made, I am not recommending cuts to certified or classified staff at this time. We also intend to protect educational programs, athletics, fine arts, activities, and opportunities for students.
We expect to need at least one additional TAN, but we expect that amount to be smaller. Our goal is to repay most, if not all, of the TAN borrowing by 2030 and then rebuild our cash reserves.
A financial challenge that developed over several years will take time to correct. Our plan is straightforward:
Stabilize. Repay. Rebuild.
We will continue to share updates with our community as we work toward a stronger financial future for Falls City Public Schools.
Thank you for your continued support of our schools and students.
Dr. Andrew Offner
Superintendent
Falls City Public Schools