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DL Schools looks to cut $1.1 million

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Detroit Lakes Detroit Lakes, 56501
Detroit Lakes Minnesota 511 Washington Avenue 56501

Detroit Lakes Public Schools administrators, faced with an uncertain state funding, recommended $1.1 million in additional cuts to next year's budget during Monday's School Board meeting.

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The recommendations come on top of $960,000 in cuts that was presented to the School Board in April.

The new cuts would see 10 full-time teaching positions being eliminated, as well as several other part-time certified positions and full-time non-certified jobs.

"We could only do this for so long," said Superintendent Doug Froke about cutting positions here and there. "The next time, we really get into structural changes."

Citing inflation and decreasing enrollment from this year, Froke said that the budget crunch is real despite Detroit Lakes' finances being relatively sound compared to other districts.

Other possible cost-saving measures are shifting more staff development funding to the general fund to the tune of $150,000. But that requires approval of the teachers.

A complete list of proposed cuts is available on DL-Online.

School administrators are watching the legislature and the governor closely for signs as to what's coming down the pipe.

The House of Representatives and Gov. Tim Pawlenty support a plan that would keep per pupil funding at current levels.

The Senate, though, preliminary approved a bill that would see a 3.3 percent cut for schools. That translates to a loss of $273 per student.

The first round of proposed cuts to the district's budget came as a reaction to the House and the governor's plans. The additional $1.1 million is from the potential of the Senate bill becoming law.

"We still don't know if we have to go there," said Board chairman Tom Klyve. "The Legislature has not yet decided on how far we have to go or if we have to take another step."

While the district plans to use some of its reserves as part of the first $960,000 in cost containments, Froke said that it's not sustainable. The district has about $4 million in reserves currently.

"Within a short time, we will not make three years with our reserves," Froke said if the School Board did not approve cuts.

Compounding the problem are plans to withhold more state funding to districts than what is currently being done.

State legislators are looking to withhold 27 percent of annual funding that would be paid back down the line. At the present time, 10 percent of state funding is withheld until future years.

Districts would have to use their reserves to make payroll and for other cash flow issues, or if districts are in bad financial shape, they would issue notes to finance the cash flow shortfall.

"A potential payment shift turns on reserve balance in working capital," Froke said.

Froke said that no district in the state has 27 percent reserve.

"The legislature is in charge on both ends of your spectrum," Froke said to the Board. "They control your expenses and control your revenue, and you're left holding the bag."

Community ed plans look to be finalized

School board members and administrators seem to have a reached a consensus on what to do with the district's community education program.

After three ad hoc meeting to discuss the various options on the table, the district looked to reach an agreement with the Detroit Lakes Community and Cultural Center to provided community ed programs.

But the sides couldn't reach an agreement over the weekend, Froke said.

"While we did come together on the scope of work, we did not come together on the terms of a financial arrangement

Now the district is looking to name Lowell Niklaus, former superintendent and the district's current education director, as the community education director.

Doing so would keep the community ed program in house.

A proposal to finalize Niklaus' appointment will likely be brought before the School Board at June's meeting.

Some board members expressed hope that the district could find ways to collaborate with the DLCCC in other ventures.

"It was a great deliberation process," said Board member Barbara Boyle. "I hope there are other ways we could partner with the DLCCC."

Froke said: "They very much have an interest in our programming. And I think that partnering with them, no matter what type of leadership infrastructure is in place, is a key component for the betterment of our community."

He added that both sides felt an urgency to resolve the community education situation quickly with the retirement of current director Mark Greenig.

Other actions that the Board took included:

- Heard the status about health insurance plans for the district's employees for next year.

The district will see the smallest increase in 15 years in regards to the insurance premium costs for healthcare through the Lakes Country Service Cooperative.

Those rates aren't finalized yet because some districts may drop their coverage through the cooperative, which would allow for rates to be renegotiated.

- Approved the retirement of long-time high school teach John Flatt. Flatt is the coordinator of the School to Work program.

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