District reports FY25 finances: revenues top $100M; solvency ratio declines to 9.6%
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Summary
Finance staff reported FY25 revenues above $100 million, a 4.7% increase in general-fund expenditures, and a solvency ratio of 9.6%; staff warned of pressure from reduced AEA flow-through funds and recommended conservative staffing and attention to future tax and state-aid changes.
Southeast Polk Community School District finance staff presented the fiscal year 2025 year-end report on Oct. 2, reporting total revenues exceeding $100 million, general-fund expenditures of roughly $106 million and a solvency ratio of 9.6%.
Finance staff said revenues increased 1.9% year over year and that general-fund expenditures rose 4.7%, driven primarily by a 6.6% increase in wages and benefits. Interest income declined as capital and bond-related cash decreased following the large bond issuances in 2024. The district reported receiving about $6.4 million in ESSER/COVID-related funds across the federal program period; those funds concluded in FY24.
Staff highlighted budgetary pressures and drivers:
- AEA flow-through dollars changed, with district retained dollars reduced; the district will retain about 10% in the current fiscal year for services such as special education and media services, while 90% flows to the AEA or is passed through. Staff warned that the cost of purchased services may exceed available retained funding.
- Title funds dropped 28% in the prior year and are projected to rebound in the current year. Medicaid revenues were down 14%.
- Capital projects spending fell after the $92 million bond issuance in 2024; remaining capital fund balances are projected to decline as ongoing projects are completed.
On financial indicators, staff said unspent spending authority fell from 17.3% to 15.7% and that the solvency ratio of 9.6% remains within the Iowa Association of School Boards (IASB) recommended range of 7% to 17%, though staff urged conservatism in future staffing decisions and noted the district will seek additional spending authority from the School Budget Review Committee (SBRC) for one-time middle-school and personnel costs.
During Q&A board members asked whether the solvency ratio is likely to level or decline further; staff said FY26 budget planning assumes a modest draw on fund balance and cautioned external factors (legislative changes to property tax and state aid) could affect future ratios. Staff noted potential mitigation: maximize cash reserve levy receipts while managing expenditures.
Why it matters: The report provides the board and community with the district's near-term fiscal picture ahead of a bond referendum and additional capital spending; the solvency ratio and unspent spending authority are key measures that rating agencies and bond underwriters review.
Speakers and attributions
Kevin Begum — district finance presenter — delivered the year-end financial report and provided the revenue, expenditure and solvency figures quoted above. Board members asked clarifying questions about AEA funding, solvency trends and capital project funding.
