After several years of turmoil and austerity measures, the Appoquinimink School District appears to be on the road to financial health.
A string of accounting errors and a chaotic reassessment process created compounding financial problems for the state’s second-largest school district in recent years, driving the district into significant budget cuts and sparking ongoing accounting and accountability reforms.
At a meeting in June, the district’s superintendent and finance director told board members that things are improving. Particularly noteworthy, said Superintendent Matthew Burrows, is the district’s carryover from the current budget into next year’s. All told, the district has about $10 million dollars unspent from its current budget.
“Last year, our carryover was $3.1 million. This year, we're at just over $10 million of carryover,” he said. “I think that's a cause for celebration.”
However, much of that money is already spoken for. The district will need to hold on to some $4.2 million to cover one month’s payroll, as required by state law. District officials want to put another $4 million into the district’s reserve funds as well, in order to build that fund back up.
While things are looking up, Burrows warned Board of Education members that the district still faces challenges ahead. One thing on the horizon is the opening of new buildings in the coming years.
“There's expenses naturally that come with opening three new schools, and so it's not like we're flush in money and now we can just have at it,” he said. “We still need to be very cautious as we move forward as a district.”
Burrows highlighted rising inflation and costs for everything from food to fuel as concerns affecting the district’s finances. Also looming in the future is the question of salaries for the teachers and staff of the district, he noted.
“We have the lowest paid teachers in New Castle County,” Burrows explained. “We have done work to try to become more competitive than that, but that's a budget concern. We can't just say, ‘oh, we're in austerity mode and we're just going to continue to fall further and further behind in compensation.’”
Continued reassessment fallout complicates future budgeting
As the district continues to extract itself from its fiscal problems, reassessment in New Castle County continues to be a vexing problem for district budget writers. Just like last fiscal year, property tax receipts will be coming in months later than usual. That complicates the district’s spending, explained Chief Financial Officer, Alleesa Stewart.
“Unfortunately, there will be tax delays for fiscal year 27,”” she said. “So the same cash flow situation that we were in fiscal year 26, it is going to roll over in fiscal year 27.”
As part of their presentation to board members, Stewart and Burrows laid out a tentative plan to accommodate the uncertainty around late property tax collections. Part of the plan involves drawing on the carryover.
“That carryover that we do have is going to assist us with our cash flow until we receive our receipts,” she told board members. “It is tentative now that we're going to receive the big tax receipt in January or February of 2027.”
Officials also plan to stop spending on all but payroll and critical expenses on October 1, and take advantage of an interest-free state loan to ease the period before tax receipts start to come in.
“The state loan was put in legislation because of the last two years, the tax collections being so late,” Burrows said. “They know that districts aren't able to float that long without their tax receipts coming in.”
Also still to be determined is the district’s tax rates. While the district cannot raise its operating expense rate without a referendum, other tax rates can fluctuate. While districts normally determine those rates around this time of year, and Kent and Sussex Counties are doing just that, repercussions from assessment will delay that decision in New Castle County districts like Appoquinimink until fall. Burrows, Stewart, and Chuck Longfellow, a consultant working with the district on its financial recovery, suggested that the portion of taxes going to debt service may fall slightly. But, the district’s tuition tax, which funds programs for special needs students, is likely to rise.
While property values in the district are projected to rise, outgoing Board of Education President Richard Forsten noted that the district operates at a disadvantage compared to other districts in the state’s most populous county.
“The vast majority of our assessment base is residential housing,” he said. “We don't have a Christiana Mall, we don't have an experimental station. We've got one Lowe's, the Christina School District has three, and on and on and on.”
That means, he said, that homeowners in the district saw proportionally less relief than other districts from split tax rates between residential and commercial property owners.
The district expects next year’s budget to be around $79.2 million, but a preliminary budget is still under construction.
