Signs of balanced budget for Perham-Dent: New levy makes a difference after two years of deficit
Money matters in the Perham-Dent School District have been tight over the last several years, as demonstrated by failed referendums and cuts to staff, classes and activities.
Some relief came in April 2012, when voters approved a capital projects levy. This allowed the district to keep up with buildings and grounds maintenance and update its technology.
Over the summer of 2013, the Minnesota legislature also approved a $300 per student referendum option that only required the school board’s approval. This move was intended to restore revenue lost in 2001, when the state changed its model for education funding.
The board-approved levy will bring some relief (about $451,000) to the stretched budgeting. However, these funds will not be available until the 2014-2015 year.
With all of the time school finances spend in the spotlight, the actual workings and number balancing done behind the scenes remain somewhat mysterious.
“I think some people think we pick those numbers,” said Superintendent Mitch Anderson about the dollars collected for the district through taxes. “But the state has their formulas. They generate those reports for us that say what we can and cannot levy. We submit the information that gives them that number, but that’s all calculated at the state.”
The preliminary budget for 2013-2014 was set in June, before the beginning of the district’s fiscal year.
Expenses for the school year were projected to be $13.6 million, but revenues only added up to $13.1 million. A shortfall of approximately $500,000 was anticipated by the school board.
Kristi Werner, the district’s business manager, explained that the budget is updated later in the fiscal year to better reflect costs and the number of students at the school.
According to January’s enrollment report, as the year has gone on, enrollment numbers have stayed relatively similar to when classes began. Not as many students have moved out of the district.
Since state aid is paid on a per-student basis two times each month, this means the deficit could actually be smaller than predicted.
Final budget numbers were expected to be presented at the next school board meeting, which was held after press time on Tuesday.
Rather than cutting positions or programs further, and suspecting that the increased state aid would be approved, the board opted to make up the deficit with the district’s unassigned reserve fund.
Five or six years ago, the reserve’s balance was down to about $47,000, said Anderson. It is now closer to $1.8 million.
While this is a step in a positive direction, it is still less than the reserve amount which is recommended by auditors.
Now, the focus is beginning to shift to the future and forming a preliminary budget for 2014-2015.
The board-approved levy is essentially an operating levy similar to what the district tried to pass in previous years, said Anderson.
Because these funds are intended to cover the district’s operating expenses, there is not a requirement to bookmark dollars for specific projects.
Anderson said the revenue is “slim” compared to voter-approved levies passed in some districts, but it is still an improvement.
“The programs that have been cut, the positions and things like that that we haven’t brought back … we’d love to allow that,” said Anderson. “But, we’re just not to that point where we’re financially secure enough to bring those back.”
The district’s capital projects levy, which was approved by voters in April 2012, will also contribute $440,000 to the district’s upcoming budget.
So far, the capital improvement funds have been used to fund the iPad initiative, replace old heat pumps in the elementary school and repair some portions of the high school’s roof. Over the coming summer, these funds will also be used to resurface one of the aging parking lots.
Thanks to these funds, early estimates suggest the district may find itself breaking even next year.
Without the board-approved levy’s budget contribution, Anderson and Werner said the district likely would have faced a shortfall of $360,000.
“I think we would have been making cuts,” said Werner. “Without that board approved levy, I have no doubt that we would be making $200,000 or $300,000 worth of cuts.”