The Frazee-Vergas School District hosted the first of several referendum meetings Monday evening with only about half a dozen community members at the Vergas meeting.
Superintendent Chuck Cheney presented the audience with numbers regarding the proposed referendum, addressed past administrative struggles and explained the drop in the levy request.
District taxpayers are paying on a $1,000 per pupil referendum, which will expire at the end of June 2013. The district is now proposing a $700 per pupil referendum to begin immediately after the expiring one and run for five more years.
The state provides an average of $5,224 per student -- though the amount per student varies because the district gets less money for younger students -- and if a district wants or needs to spend more than that, it goes to the taxpayers, Cheney said.
Throughout Minnesota, 309 of 336 school districts have operating levies, or referendums, with an average of $900 per pupil. Of the 27 districts that don't have levies, several do not need them because of the federal Impact Aid program. Some of those include Waubun and Mahnomen.
Frazee's current levy generates about $1.2 million for the district. The proposed $700 per pupil levy would generate about $840,000 a year.
The decrease in the proposed levy would lower property taxes 33 percent, Cheney said.
What it will do to taxes
"Districts have become the state's banker," Cheney said.
The state withholds 27 percent of districts' money and pays it the following year.
The district is proposing the $700 referendum to help with textbooks and materials, to maintain programs, and 10 percent goes into the general operational budget and to help prevent significant increases in class size.
On a $100,000 house, taxpayers pay about $224 for the referendum. For the proposed $700 per pupil referendum, that same house would decrease to about $149.
On a $150,000 house, those numbers would go from $336 to $224, and on a $200,000 house, they would decrease from $447 to $299.
Agriculture and seasonal properties would be taxed the same as they have been in the past. Agriculture land will be taxed on the value of the house, the garage and one acre of land. Cabins and seasonal recreational property will not be taxed.
"We are stuck with the language that this is a tax increase," Cheney said.
Even though the district is asking for a smaller referendum than is already in place, the wording on the November ballot must say that voting for the proposed referendum will be a tax increase.
When legislature passed a law allowing districts to ask for referendums, it required the ballot to state that it would be a tax increase if passed. If the district were to ask for a $1,000 referendum renewal, it would not have to state on the ballot that it would be a tax increase.
"No one anticipated, apparently, that a district would lower their levy," Cheney said.
But, since the referendum will run out at the end of the school year, there will technically be no referendum in place, and therefore the $700 per pupil would be a tax increase after this one runs out.
Cheney said that if the referendum passes though, there won't be a period of time missed with no referendum because the new one will start as the old one sunsets.
Changes over last couple years
Cheney also addressed the changes made a couple years ago to administration. Rather than skirt around the elephant in the room, so to speak, he said he wanted to "address it head on."
Enrollment had declined by 270 students from 2005 to 2010, and projections showed even more of a decline in the future.
Deficit spending was projected to be $880,000 for the 2011-12 school year, and there were strained relations throughout the district.
The school board decided to buy out the contract of superintendent Deron Stender, and in the past year, enrollment has increased by 46 students, there will be no deficit spending for the 2012-13 school year, and three contracted services have ended and saved the district money by returning the employees to the district payroll.
"Revenues will exceed expenditures this year," he said.
Cheney and Business Manager Pam Pontius have also been working to find other ways to save the district money, including refinancing several bonds and possibly paying off a lease, which will be determined in the next few months.
Upcoming referendum meetings
Frazee-Vergas School District will be hosting multiple meetings throughout the district in October in preparation for the proposed referendum on the November ballot.
Dates and locations of those meetings include
Oct. 11 at 7 p.m. in the Shell Lake Town Hall
Oct. 15 at 7 p.m. in the Frazee High School
Oct. 16 at 7 p.m. in the Vergas Community Center
Oct. 23 at 7 p.m. in the Frazee High School
Oct. 25 at 7 p.m. in the Wolf Lake Lions Hall
Oct. 27 at 9 a.m. in the Frazee High School
Oct. 29 at 7 p.m. in the Toad Lake Town Hall
Follow Pippi Mayfield on Twitter at @PippiMayfield.