| District finances gloomy in economy |
By: Corey Butler Jr.
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Posted: Monday, November 2, 2009 10:31 pm
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FARIBAULT — Even the best-case scenario isn’t looking great.
At Monday night’s school board work session, Colleen Mertesdorf, district director of finance and operations, painted a picture board members weren’t happy — but not too surprised, either — to see.
Even if financial figures work in the district’s favor over the next few years, the district will likely find itself in or close to statutory operating debt by the 2012-13 school year.
It could be a year sooner if things are gloomier.
“It’s not a good picture,” Mertesdorf said.
Under Minnesota law, a school district enters statutory operating debt when it spends in excess of 2 1/2 percent of its unreserved general fund balance, the largest fund the district has and one that consists of federal, state and local dollars.
The district was just shy of 8 percent last fiscal year, which is a common goal for districts.
To be fair, Mertesdorf said, it’s difficult to predict finances in the current year, let alone three years out.
That’s because every two years state lawmakers set the funding formula for school districts, which was frozen for the current biennium.
“Once you get beyond current law, you have to make some pretty strong assumptions about what’s going to happen,” Mertesdorf said.
The best that can be done, she said, is to look at trends.
Mertesdorf predicts that in the best-case scenario, revenues will remain stable over the next three years for the unreserved general fund — about $30.9 million.
In that same projection, the expenditures start at the same $30.9 million mark for this school year, but increases about $600,000 each of the next three years.
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| Assumptions followed for that scenario include state-aid funding to remain frozen, enrollment to remain stable and the local levy being renewed for the same amount — about $1.9 million.
Board member Jason Engbrecht said there’s a chance the levy may not be renewed during a difficult economic time. The levy expires after next school year.
“There’s a real possibility of not having that,” he said.
Board member John Lorenz disagreed. He said voters value education and will continue to support the district.
An original draft by Mertesdorf had the local operating levy continuing in the worst-case scenario, as well, but with discussion of the possibility of it not being renewed, it was agreed that future drafts of projected scenarios would have that levy removed in the worst-case scenario.
Jerry Robicheau, another school board member, said Tuesday’s statewide polls should be telling.
“You’ll find ... how much taxpayers are interested in helping school districts with financial issues,” he said.
Nearly 60 school districts will ask their respective taxpayers to go to the polls Tuesday to consider operating levy referenda.
Also included in the best-case scenario is a freeze in salaries and benefits for the unresolved teachers contract in 2009-2010, with a 2 percent increase each year thereafter.
It also includes no cuts of programs or jobs.
In the worst-case scenario, salaries and benefits for teachers increase by 3 percent each year and state aid is reduced by 3 percent in the next biennium.
Superintendent Bob Stepaniak said 27 states lowered funding for public schools for the current biennium.
He said anything could happen in the next legislative session, which, he reiterated, makes projecting years out difficult.
Still, Stepaniak said, it’s not likely going to be good news regardless of what comes out of St. Paul.
“We are not optimistic ... that the problem is going to go away soon,” he said.
— Staff writer Corey Butler Jr. may be reached at 333-3135. |
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Member Opinions:
By: geemar on 11/3/09
maybe those staff people who make more than 90,000 dollares need to take a great reduction in pay like liz keenen and lora arnot, just to name a few. why pay them all that money when the district is hurting. time to get those wages under control.
By: secretsquirrel on 11/3/09
The board can watch the statewide results on various district referendums all they want. What Faribault voters are waiting to see is how this contract is handled and how responsible and fair the two sides are. If the contract is delayed to the point of another $100,000 fine by the state (and I do not care WHO is responsible because BOTH sides are) there is no way I am going to support pumping additional money into the program. If that strikes some as cutting off my nose to spite my face, so be it. I will pull my kids out of public schools and place them in private schools or send them elsewhere because I will have had enough at that point. If that means taking on an extra job to cover any additional expense, so be it. Been there, done that. That contract will play a huge part in determining my vote on any levy proposed. The drama has been kept to a minimum in these negotiations. Let's keep it that way. Always bear in mind where people are at economically in this community and remember that we all have options.
By: fyi on 11/3/09
Don't think they'll be passing any levy. We just found out the company we work for here in town is closing after the first of the year. We'll lose our income and health insurance along with about a hundred others.
By: ikki on 11/3/09
...and to think some people still think its just business.
By: secretsquirrel on 11/3/09
Sheesh fyi! Sorry to hear about that. Things like this elude people with secure jobs and somehow forget that the public sector is completely dependent on the private sector instead of the other way around. If you are uncomfortable answering this question I'll understand but I am wondering what company or what type of work you are in.
By: snakeldy on 11/3/09
Teachers get a 2% increase every year! Must be nice to have that build right into your contract. My company has been in a wage freeze for the past 2 years.
By: iris99 on 11/3/09
i am sorry to hear about job loss, I truely am. Been down that road myself. However, this attitude of "he had I dont, therefore they shouldnt have either" is a pretty self centered idea when it comes down to it. Did you go to school to get that job that pays that? Just because someone still has their job, weather it be public or private, doesnt mean they should just loose their income because you did. Or drop their income because you lost yours. Switch it around...what if that was YOU who still had the job and someone wanted to come after you because they didnt. I could be spit flining broke and you are never going to hear me say that so and so should have to drop their income because I dont have job. Also think about this one... if they lost their job, or dropped their pay, whose taxes are going to be used to pay your foodstamps? The ones that have jobs now need to keep them, they are how is keeping stores open, taxes flowing, etc. Now dont get me all wrong here. There is a point where what is said DOES make a point. Thats when fraud is in the mix. I also believe thats what triggers such attitudes. How angry to we all get to hear about CEOs making billions who did nothing but rob their empolyess, rob others of life time savings. Or how they still get mega checks and perks when their company his bottom and the little men are cut. I see the anger, I see all that. But come on, geting angry over an average person working a job making more then you? SO WHAT! Do something about it then, improve yourself to get there.
By: iris99 on 11/3/09
Also, what I said is pointed at the attitude of it all, I am not taking up for a teacher raise...I agree they dont need one at this point. :)
By: ikki on 11/4/09
> However, this attitude of "he had I dont, therefore they shouldnt have either" is a pretty self centered idea when it comes down to it. Did you go to school to get that job that pays that? Just because someone still has their job, weather it be public or private, doesnt mean they should just loose their income because you did. Or drop their income because you lost yours. Good try, how about this. When so much of the tax base is removed because of job losses and foreclosures does is it seem logical to keep handing money out? At some point, in order to have a balanced budget (Not leave this mess for our children to clean up), we need to cut spending. So lets hear your rational plan.
By: iris99 on 11/4/09
ikki, I think you missed my point of what I posted. I am sick and tired of the attitude behind the reasons. Only reasons that pop up about WHY someone making 90k a year and has a job should cut their wages because someone else doesnt have a job. COme up with some logical, real reasons for that person to get less money a year. Its all over the place, read the next article about the city budget. All you see is "well I lost my job......he should cut their postion......they should cut their wages" WHy? I would love to know why on earth should someone who is lucky to have a job at this point loose their money because you did? I am asking that about general people. You see it all over when anyones pay is listed in this paper. Its getting old. Also someones pay is not a hand out. SO good try on that one. Cutting spending can happen without cutting someones pay. Its called being a smart buisness minded person, and getting creative. To just look at something and say "Oh he makes more then me, better cut his salary to make up for it" is wrong. LIke I said before sometimes, yes, salary needs to be looked at. But insted of taking it away right now, how about axing the raise year after year. How about combining tasks and give to one person versus 2. There are many ways to control spending. No one wants to take the time to do that. Just cut the wages! Thats what we should do. pfffttt
By: ikki on 11/4/09
If there is a better way of reducing spending then I am all for it. Any business owner can tell you that the most expensive costs have to do with people. Money isn't free, and borrowing from off shore foreign banks will only lead to ruins. So I will ask you again, other then wages what else should the school district cut. This issue has nothing to do with some one taking a pay cut because of retribution over another individuals pay cuts or job losses it has to do with basic economics. Less money in the coffers should mean less money on hand to spend.
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