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Frazee District gets good audit marks, decreases levy

The Frazee-Vergas School Board was full of good news Monday evening at its regular meeting.

Not only is the property tax levy for 2014 a decrease for taxpayers, the district’s annual audit came back with high marks. 

Truth in taxation

Not a single member of the public showed up Monday to contest their school district taxes this year, but it could have been because they were lowered about 10 percent.

“The percentage has decreased for us and the taxpayer,” Superintendent Terry Karger said.

The biggest change is due to the fact that 2013 is the last of the $1,000 per pupil referendum, and 2014 starts the voter-approved $700 per pupil referendum.

That referendum goes for five years.

Though the taxpayers will be paying less, the state will kick in more funds, so the district won’t be losing money.

From property taxes alone, $1 million went to the general fund, community service fund was at $85,900 and general debt fund at $848,000, with a total at $2 million. For 2014, the funds will be $934,000 for general fund, $75,000 for community service and $793,000 for debt service, with a total of $1.8 million.

That is a decrease of 10 percent overall.

Positive audit

The Frazee-Vergas District was given a “clean” opinion from Carlson Highland & Co. during its annual audit.

“In the auditing business, it’s the best opinion we can give. It’s the one you want,” Dean Birkeland, CPA with Carlson Highland, told the board Monday night.

He went over the district’s funds, commenting on how each was steady the last few years. In the general fund balance, the district has stayed around $4 million for 2011, 2012 and 2013.

“For the most part, you guys have been really (stable). You haven’t fluctuated much,” he said.

For 2013, the original budget was $4.8 million. The final budget was $3.9 million, and the actual budget was $4 million, which means a $136,000 variance with the final budget.

“You guys were pretty darn close,” Birkeland said.

For revenues for the district, Birkeland showed that the majority comes from state sources (just over $7 million), followed drastically far behind by local levies (about $2 million), federal sources (under $1 million) and other sources (under $500,000).

“By far and away, the biggest chunk of money is state aids,” he said.

The largest expenditures for the district is certified teachers (about $5.5 million), followed by non-certified staff (about $2 million), fiscal and fixed expenditures (which was higher this year because of a large loan the district paid off), property related expenditures, administrative and community education.

Birkeland said that the district’s salary and benefit expenditures category is “where you expect the money to be spent.”

There are two sources that recommend how much a school district should have in its general fund in case something should happen. What it means is the amount of money the district would need to survive with no income.

The Government Finance Officers Association recommends at least two months of regular general fund operating expenditures, which is 17 percent.

The State of Minnesota Office of the State Auditor recommends quite a bit more at 35-50 percent.

The Frazee-Vergas District is sitting at about 31 percent as of June 30, the end of the fiscal year.

“You guys fall right into those recommended levels, which is good,” Birkeland said.

Follow Pippi Mayfield on Twitter at @PippiMayfield.