Superintendent explains budget, gives Frazee finances an 'A'
Barring no major changes, the Frazee-Vergas School District will be debt free in 10 years.
Paying on four debt service items -- 1993, 1995, 1997 and 2008 bonds for facilities -- Superintendent Deron Stender told audience members Monday evening at the district's truth in taxation presentation that the district will be debt free by 2019.
"As long as there are no other projects," Business Manager Diane Menz added.
"I don't anticipate any building projects," Stender said. "The district is in good shape in terms of facilities."
Stender presented the figures for the 2010-11 school year, for which the district is increasing taxes 3.13 percent.
Facing repeated budget problems, the state has been putting more responsibility on the district taxpayers.
"More and more districts were having to go out to their taxpayers because the state wasn't coming through (on past funding promises)," he said.
The state gives out more money per student depending on what grade they are in. For example, kindergarten students are worth less than a fourth grader, who is worth less than a sixth grader. Seventh through 12th grade students are worth 100 percent of the funding because the state says it costs more to educate the older students.
Some classes, like agriculture programs, home economics and wood shop class, are more expensive than the average class, but are options the district wants to provide its students.
One break to the state funding came in the form of federal stimulus money, but that may hurt the school district when the stimulus money is gone -- depending on if the state reinstates full funding or not.
For example, if the state funds $100 for the school district, the state is actually funding $70 of that and the remaining $30 comes from the federal stimulus money. But, after the one-time stimulus money is done, what happens then?
Stender said the state will likely only give the $70, and not the full $100. That would translate into a $500,000 shortfall after the 2011 year for the district.
During Stender's presentation, he showed numbers for the upcoming budget.
The general fund is expected to have $8.5 million in revenue and $8.1 million in expenditures. Some of the revenues includes food service ($421,000), community education ($177,000) and debt service ($2 million), which is a special case this year of its own.
When borrowing for the bonding project to install sprinklers and the HVAC system in the school, the district borrowed about $1 million more than needed. Costs of the projects have actually come in much lower than expected because of the economy.
Expenditures for the 2009-2010 budget are $464,000 for food service, $197,000 for community education, $1 million for debt service and $2 million for building construction.
"We are way under budget, which is a good thing," Stender said.
He further broke down the figures into those that come from the general fund.
Some of the funds payable with the 2010 levy include $28,549 for safe school, $24,222 for career and technology, $38,632 for health and safety, $924,050 for referendum, $166,611 for operating capital and $51,071 for deferred maintenance, to name a few. Those numbers are just from taxes and don't include money from the state.
The safe school fund is as it sounds, for anything to keep the school safe -- security cameras, locks on doors, drug dog, etc.
The money put aside for health and safety is for hiring someone to come in and perform mock OSHA inspections, make sure the chemical and science labs are regulated as needed, etc.
The money that goes into the transition fund ($26,093) is used to balance the difference in market value on houses. In the Twin Cities area, schools get more because there is a wider range of market value.
Special education is one of the most under-funded portions of school, but it is also one of the most highly regulated. Regardless of the funding the state gives, it still mandates what the school system must provide for special education students.
That state funding always falls short. While the state may promise to give 100 percent of funds, the district usually budgets for 70 to 75 percent, Stender said, which is still usually too high.
"We still get excited to think we'll get that 51 percent," he said.
Besides the changes in the debt service fund, which will cancel itself out, "financially, our picture hasn't changed much," Stender said.
When asked to grade the financial status of the district, "you're significantly better than five years ago. You're in the 'A' area."
That's with no major changes. Unfortunately, no one can predict the state's funding.
Education will take a hit someday, Stender predicts.
"It's the only spoke on the wheel that hasn't been broken yet. It's going to happen."