Officials: South Callaway district OK despite drop in revenue

‘Life has changed a little bit’

MOKANE, Mo. -- The South Callaway School District took a major hit this year when it lost roughly $1.28 million in revenue, but despite the shortfall, officials say their outlook is positive.

Superintendent Kevin Hillman held a public meeting on Thursday to discuss the district’s financial health and what’s expected for the next school year.

He explained the loss came from decreased revenue from the Ameren Union Electric nuclear power plant.

The district receives the majority of its funding from the power plant. The power plant’s assessed valuation took a nosedive last year and, thus, so did the school district’s, Hillman said.

The amount of money a district receives from local taxpayers is calculated based on the district’s assessed valuation, which is made up of personal property, commercial and agriculture — commercial property being the most valuable.

Hillman said the district’s assessed valuation went from about $333 million to roughly $289 million, which is a dramatic loss.

“We’re the only school in the state that’s lost ($44) million in assessed valuation in one year,” he said.

Last year, the district's revenue came in at $11.7 million, and by the end of this year, South Callaway’s revenue will be around $10.2 million.

Because the district's local assessment is so high, South Callaway gets fewer funds from the state and federal government. In the future, the district could get more state and federal dollars, but not enough to fill the void.

“For us, life has changed a little bit because we took a very sizable hit that came from the power company for the first time in 35 years,” Hillman said. “There have been very few years it’s ever gone down.”

The dip would have been more problematic if the district didn’t have its reserve fund to fall back on, he said. South Callaway keeps more money tucked away in reserves for its operating expenses because most of its revenue comes from one source. The district reserved about 68 percent of its funds for operating expenses and had an excess of $6.48 million at the beginning of this school year.

Hillman said there weren’t any cuts in the school budget, but next year there are three teacher positions districtwide they aren’t rehiring for.

The high school will go down to two full-time mathematics and science teachers, but it’s likely the district will ask other teachers certified in those areas to teach a math or science class, he said.

It is possible the district will rehire for those positions in the future, he said.

Class sizes might be slightly higher because of it. The district would like the student-teacher ratios to reflect what the district had 10 years ago, which was 20-to-1 ratio. Currently, classroom ratios are much lower than that.

The district does anticipate about 40 fewer students next year. But that also means the schools will receive less money from the state for their average daily attendance — schools are compensated for the number of students they have.

Teachers will receive their annual raises, though. Every year, teachers receive a step in their salary based on years of teaching experience and post-secondary education.

This year, South Callaway gave its teachers a $700 increase in their salary. The starting salary for those with a bachelor’s degree is $31,700 and for teachers with a master’s degree is $34,500.

Next year, Hillman said, teachers will receive their $700 step, and the district is adding $100 to the base salary, bumping the starting bachelor’s degree salary to $31,800.

The district pays 100 percent of employees' health care, and Hillman said they plan to keep that the same for next year. In other words, money isn’t pulled from employees' paychecks each month for their benefits package.

Unless they see a big percentage increase in the cost, Hillman said they’ll always try to keep the district-paid benefits.

“We’re in really good shape; it’s just forcing us to look at what we’re going to look like in the next five years.”

One positive is the district could adjust its tax levy back to $2.40 — it’s currently at $2.75 — and the $0.35 capital, which should generate an additional $283,421 in revenue from railroads.

The district is looking at how often it rotates its equipment and infrastructure to save money and big expense projects are also off the table for the time being, he said.

If the revenue from the power plant plateaus, then Hillman said the school district will be in good shape. His concern grows if they experience another drastic drop in assessed valuation.