$180,000 in cuts face Perham-Dent
A timeline for more painful budget cuts has been prepared for the Perham-Dent schools, as administrators chart a course after the defeat of the increased tax levy vote.
Money matters dominated a nearly four-hour meeting of the school board November 19.
With so much ground to cover--and so little money to work with--the board set a special meeting for Dec. 3, which will deal with only one topic: Budgets and budget-cutting.
There are no official cuts yet, but because of the procedural requirements, the board voted for a resolution that instructs school administrators to begin finding programs and staff to slash.
School Superintendent Tamara Uselman is suggesting about $180,000 in cuts this year. Those cuts would be scheduled to be implemented starting Jan. 1.
"If we don't, I don't feel comfortable because our fund balance (reserves) will be too low," said Uselman.
Based on the school's audit report, which was presented at the Nov. 19 meeting, the school's $228,828 in the reserves would provide the school about one week of operating revenue. The state recommends maintaining reserves equivalent to about two to three months of operating costs, said auditor Don Zierke from the Miller McDonald accounting firm. With expenditures of about $13.6 million a year, that would mean the school should have $2 to $3 million.
By some estimates, the school will need to cut another $500,000 to $750,000 in 2009-2010.
Complicating matters further, current enrollment at school is about 25 students lower than projections. Under the state aid formula, this represents a loss of about $150,000--which is the key factor in making budget cuts for the present school year.
Closing Family Resource Center building among cutting options
Closing the Family Resource Center building, which houses early childhood, family and Head Start programs, was one idea discussed. The programs would move to the elementary school, but the building would be closed to save on heat, electricity and maintenance.
It's a start, but since the facility will need to be heated at a minimal level to preserve the building, savings could be minimal, noted Board member Dave Schornack.
Another idea was to close up the Alternative Learning Center building, the brick administrative building just west of the high school. The programs would be moved to the PHS building.
"We don't have many choices," said Superintendent Uselman. "Without harsh reductions, we will be in statutory operating debt quickly."
Schools in statutory operating debt face strict state scrutiny, controls and restrictions.
Board member urges stricter review of monthly expenses
Stricter internal controls and board oversight of month-to-month unbudgeted school expenses was proposed by board member Schornack. Among the policies discussed was reducing the unapproved expense limit down to $5,000, or even $2,500.
Currently, administration has the authority, in effect, to make purchases without board approval if the expense is $10,000 or less.
"In this economic environment, we need to review expenses closely," said Schornack.
Schornack also asked for more description and explanation of each monthly expense, so the board can be better informed when reviewing the monthly disbursements.
One example, said Schornack, was a $5,700 bill from Mulligan's, with no explanation. The expense was perfectly legitimate, as the school acts as a "Fiscal Host" for non-profit events hosted by organizations such as Kinship and Someplace Safe.
Acting as a host for non-profit groups is a good service to the community, said Schornack, but without explanation, the bills can raise questions from the public.