Property insurance, deductibles spike for Cedar Rapids school district

CEDAR RAPIDS — In its new budget, the Cedar Rapids school district is setting aside more money to cover future storm damage to its buildings, given that its insurance carrier is increasing its premiums and setting a much higher deductible for wind and hail damage.

Property insurance premiums have been increasing in Iowa since the Aug. 10, 2020, derecho caused billions of dollars in damage in the state and damaged every building in the Cedar Rapids school district.

The district’s property insurance premium has increased from $2.1 million this year to an estimated $2.5 million in the new fiscal year, according to David Nicholson, the district’s chief financial officer.

Also, the district’s property insurer — EMC Insurance — has increased the deductible to a $75,000 per building for wind or hail damage, he told the school board last month.

“If we would have had that and the derecho happened, impacting all of our buildings, it would have been approximately $2.6 million,” Nicholson said. “This is a big shift.”

After the derecho, he said, the district paid only a $10,000 deductible to cover the damage to all its buildings.

In response to those changes, the district is setting aside an additional $888,000 in the proposed fiscal 2023 budget — enough to cover the higher insurance premium and to cover the higher deductible for wind or hail damage to eight school buildings. There are 31 school buildings in the district.

“Hopefully, we don’t have another derecho come through that impacts every one of our buildings,” Nicholson said. “We’ll levy a little extra each year to build that balance in case something significant happens.”

The budget

The school board is considering a $317 million budget for fiscal 2023, which begins July 1 and ends June 30, 2023. That’s a 1 percent increase over this fiscal year’s budget.

A public hearing on the proposed budget is set for 5 p.m. Thursday, April 14, at the Educational Leadership and Support Center, 2500 Edgewood Rd. NW.

The budget proposes a school property tax rate of $14.71 per $1,000 of taxable property value — a decrease from this year’s $15.36 per $1,000 and one of the lowest property school tax levies in Eastern Iowa, Nicholson said.

For the owner of a $200,000 home, that amounts to a decrease of about $132 a year in Cedar Rapids school property taxes.

Enrollment

Declining student enrollment continues to impact the district, which counted 16,086 students in October, a decrease of 750 students from 2020.

Some students formerly in the district open-enrolled in the College Community School District or the Marion Homeschool Assistance Program, district officials say.

The Iowa Legislature earlier this year approved a 2.5 percent increase in state supplemental aid — the amount of per-pupil funding a school district receives. District officials said that increase does not keep up with inflation and costs, especially in districts losing enrollment.

New school

The district also is budgeting $2.6 million to begin designing and building an annex to Arthur Elementary, 2630 B Ave. NE. An additional $10 million will be set aside to complete that project.

Once the new school is finished, the Arthur and Garfield Elementary School attendance areas will be combined, the Cedar Rapids school board voted last month. Garfield is at 1201 Maplewood Dr. NE.

The money for construction and paying off revenue bonds comes from the 1 percent statewide sales tax — called SAVE, or Secure an Advanced Vision for Education — that funds school infrastructure projects.

Pandemic funds

District officials plan to spend $14 million in federal funds to continue addressing learning loss that happened when schools closed and students went to remote learning during the pandemic.

The funds were awarded last year from the Elementary and Secondary School Emergency Relief Fund approved by Congress at the height of the pandemic.

The district has received $50 million in those federal pandemic funds, to be spent over four years.

The district spent $17.1 million of the award this year on learning loss, technology and instructional materials; heating, ventilation and air-conditioning improvements in schools; mental health support; and school bus attendants.

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