Board rejects Callaway School offer of $175,000
The Detroit Lakes School District needs to look at a "moving target" of approximately $200,000 in cost containments to balance the 2006-07 budget.
That's according to a finance committee report to the School Board from District Business Manager Richard Lundeen.
Superintendent Lowell Niklaus presented the first seven in a series of "considerations" for possible cuts. More potential cost containments will be presented at the March meeting.
But the biggest item on the list was saved for last. Mike Gunderson of Gunderson Real Estate informed the board that a formal offer had been made for the purchase of the former Callaway Elementary School building.
Callaway school offer rejected
Gunderson noted that the White Earth Land Recovery Project had made a formal offer of $175,000 for the building.
Though it was a legitimate offer, Gunderson noted, it was also less than half of the district's official asking price of $395,000.
"We did receive a bona fide offer... the big difficulty is that it's so far short," Lundeen said.
Board member Deanna Sinclair noted that the low offer concerned her.
"It's only been on the market for a short time," she said. "This offer is for less than 50 percent of the asking price... I feel it's not in our best interests to accept."
Sinclair also questioned whether any stipulation in the contract that the property not be used for K-12 instructional purposes could be enforced, given the fact that White Earth is considered a sovereign nation under federal law.
"How enforceable would that (restricted covenant) be if we don't have a waiver of sovereign rights?" she asked.
In response to a question from board member David Langworthy, Lundeen noted that it would cost the district approximately $15,000-$22,000 in annual maintenance costs to hang on to the property.
Gunderson also stated that the district could make a counter-offer.
"It (the final price) is always negotiable," he said.
Because the offer was so far below the asking price, however, the board opted to pass a resolution rejecting it -- while noting that they would leave the door open should the Land Recovery Project decide to increase its offer.
All-day kindergarten on list of possible cuts -- again
Earlier in the meeting, Lundeen presented a financial report that showed the district would most likely be facing between $150,000-$200,000 in cost containments to balance the 2006-07 budget.
Though this figure was far less than it's been for the past several years, when the district has faced cost containments of $1 million or more, the amount could change depending on the actions of the State Legislature, Lundeen noted.
Before presenting the first of two lists of cost containment considerations to the board, Niklaus cautioned, just as he did last year, that the items on the list were not recommendations, just options for discussion.
Most notable on Niklaus' list was the possible elimination of the district's "all-day, every-day" kindergarten program in favor of a half-day program -- or the possibility of charging parents a fee for the remaining half day.
The state currently provides funding for a half-day, every-day program, or a full-day, every-other-day program. According to Niklaus, the financial savings from going to a half-time program would be between $76,000-$132,000 -- but would also result in the reduction of four full-time teaching positions.
Niklaus also made it clear, however, that this item was only on the list for discussion.
"I still believe it's a very valuable program," he said. "The question still is, can we continue to afford it?"
Niklaus also noted that he would like to avoid eliminating the full-day program for one more year, because he's convinced "something will happen with the Legislature next year," with regard to full funding for the all-day kindergarten program statewide.
Other items on the list of potential cost-cutting options include:
n Reduction of general fund transfer to transportation fund by $50,000. The district normally transfers funds from the general to the transportation fund each year in order to balance the transportation budget. The transfer reduction would result in deficit spending in the transportation fund, though Niklaus feels the fund balance would still be adequate.
n Change in occupational therapist services from contracting with St. Mary's Regional Health Center to hiring an OT and selling part of the contract to another district (Frazee-Vergas). Potential savings: $11,000.
n Reduction in plant operational budget for supplies and utilities by $42,000. This could create problems if there was an unusually cold winter, or an unforeseen disaster that once again drove up fuel costs, as Hurricane Katrina did this past year.
n Reduction in plant repair budget for turf maintenance and painting of facilities by $16,000. Turf maintenance would be confined to major-use fields only.
n Reduction in textbook budget of $50,000. After reviewing the curriculum cycle, Niklaus determined that there is no scheduled purchase of textbooks in a core curriculum area for 2006-07, and therefore, the textbook budget can be frozen at the 2005-06 level for next year.
n Reduction in instructional supply budgets (amount yet to be determined). Because of cuts implemented in 2005-06, the schools' overall instructional supply budget for 2006-07 was initially increased by $60,000, but Niklaus said staff has indicated this amount could be significantly reduced if necessary.