Derby taxpayers will get a little more information in the mail this year from the Sedgwick County Treasurer on how their school tax dollars were spent due to a law passed in the 2021 legislature. Entities in the county like Derby USD 260 who received more state tax money than planned must report it.
The passing of the Revenue Neutral Rate legislation requires school districts and other municipalities to report tax income received above and beyond what was planned or scheduled. And with that, the Sedgwick County Treasurer is required to notify all taxpayers of the increase.
USD 260 Director of Finance John Regier says the new law helps the public know more about what is happening with their tax dollars.
“I think it is good truth in taxation for the people,” he said.
Regier says this is the second year the law has been in place but this is the first year that the public will have to be notified of an increase. In the first year there was an assessed value decrease. He says things like tax abatements with the new hospital or Spirit can impact the numbers.
But even with that, Regier says the significant increase in property values this past year made a difference and was the biggest reason for the surplus.
He says they start the district budgeting process each year knowing they do not want to increase the mill levy. When working up a $100 million budget, Regier remains conservative when it comes to receipts and revenues coming in.
“If we have a little bit of a decrease, I always want to come in under that. I always estimate low when it comes to revenue and high when it comes to expenditures,” he explained.
Nearly $2 million left over
Another regular occurrence with school financing is the annual year-end transfers that school districts, by law, are required to do if excess cash is still in accounts.
Regier said that school districts get a legal maximum amount of state funding each year in the general fund and local option budget (LOB), of which they have to spend the legal maximum or cash balance.
“In the general fund, it is always going to come down to zero. The LOB can only carry a little excess tax collection money,” he said.
If the district does not spend down the cash, Regier says they can be penalized by that amount in future years from the state.
The process of year-end transfers is what allows the school district to disperse excess funds. This year, the district transferred a total of $1.87 million, or a little less than two percent of the total budget, into three different accounts.
Regier says that the special education fund doesn’t receive its state money until October, so the transfer there is to help with payroll, supplies and other areas to get the school year started off. He pointed to the increased expense of updating course curriculums that the district is going through as the reason for the textbook reserve fund transfer.
The contingency reserve fund is basically a district savings account for those unexpected things that seem to happen every year. Regier used the example of the polar vortex, when gas bills shot up to astronomical rates because of sustained sub-zero temperatures. The district gas bill was $202,430.89 and settled for $112,957.64. That was paid out of the contingency reserve fund.
Over the last five years the district has transferred amounts between $1.975 million and $1.314 million as part of the year-end transfer process.
Regier takes spending taxpayer money very seriously.
“Every time we cut a check for supplies or whatever, it has my name on the check and on the purchase order. I look at every single purchase order and every single item,” Regier said.
