Budget, audit and Truth in Taxation key points for Falls School Board
“It appears that the (district’s) fund balance is healthy, but I wouldn’t say the school district environment is in a healthy condition.”
That was the summation heard by the Falls School Board Monday, which concluded a report from accountant Don Zierke on behalf of the Miller McDonald firm, which completed the 2009 annual fiscal report for District 361.
While it doesn’t affect the district’s bottom line, Zierke cited a cash-flow problem for the district, noting two to three months of spent reserves (a 27-percent deficit on the general fund) for the fiscal year 2009. Up to about a 19-percent expenditure in reserves is considered less risky, Zierke said. And although 361’s reserve expenditures are the result of property-tax shifts and have “no real bearing on the bottom line,” Zierke cautioned the board that the draw will cause the district to go into debt to cover the negative, which will result in interest costs.
With added state cuts and hold-backs of state revenues, the district will be “headed for more cash-flow problems,” the accountant said, noting that the largest part (80 percent) of the general fund comes from the state. “Because of the government economy generally affecting all districts, who knows where you’ll be next year (actually the current school year) if the state takes more away,” Zierke said.
The Truth in Taxation hearing was also held during Monday’s meeting with no input from taxpayers on the district’s financial plan.
The board adopted the 2010 fiscal year revised revenue and expenditure budget. It also approved the proposed 2010 total levy in the amount of $2.15 million, an increase of 11.69 percent over the 2009 amount of $1.9 million.
Superintendent Don Langan stated that two levy components produced the vast majority of the $225,290 increase: $118,818 for retirement liabilities; and a $76,058 operating referendum increase approved by voters in November.
Without those components, the increase from last year to this year would have been $30,463.93 — or 1.6 percent, Langan reported.
Detailed levy information was available at the meeting, and included comparisons of proposed 2010 levy totals in other similar school districts. Lake City proposes a $3.16 million levy; Roseau, a $2.28 million levy; Dilworth-Glyndon, $2.03 million levy; and Crookston, a $2.07 million levy. The comparison shows District 361’s $2.15 million levy in the same range as these districts with similar student counts.
Some 2010-11 budget components are assumed in the levy total, such as the effects of three labor contracts for which negotiations are still continuing. Withholding of previously established funding by the state is the biggest budgeting risk, and could affect the district’s financial plan with devastating debits.
Other business
In attendance at the meeting was expelled Falls High School student Tanner D. Hanson, who offered a public apology during his request to be reconsidered for provisional reinstatement to FHS. Hanson was previously rejected for a March 26 reinstatement, in a 3-2 board vote.
Hanson, 18, was arrested Oct. 8 and charged with felony sale of a controlled substance. He was expelled from FHS for the period of Oct. 29, 2009 to Oct. 29, 2010 for his involvement in a controlled substance incident on school grounds. Hanson told the board Monday that he had lost the only real structure in his life after being expelled from the school. The board agreed to reconsider Hanson’s reinstatement.
Assistant Superintendent Kevin Grover reported to the board his recommendation to develop a transportation plan for students outside of the district. The board agreed to consider some formulas which are to be presented by Grover.
During Langan’s reports, he suggested that now is a good time for the board to reconsider a FHS facility project. Langan cited a great bond market and lowered construction costs as a good equation for considering a new facility.
Langan also advised the board of new rules, procedures and hurdles of the Q Comp program, which has altered the district’s status in the program, he said.
The soon-to-be former Falls superintendent also told the board that he had recently visited with a representative from the Orr community regarding the enrollment of Orr district students, following a passed referendum in District 2142 that will lead to the closing of the Orr School and the building of a new combined school north of Cook.
“They are very aware that anything they would like to do is going to require legislative action,” Langan said. Langan said his response to the representative is that District 361 is interested in the kids. “To go into it by balance sheets or ADM; I don’t think that would be good business,” Langan told the board, adding that it would be getting a call from that area when it finds out what options it has.
The board also heard a request from a representative of the Class of 1985 regarding the placement of a memorial bench on school property. She said there has been 14 deaths in the Class of 1985. Langan offered appreciation for the memorial and said he would respond to the request with pertinent details and requirements.
Board member Roger Jerome was absent from the meeting.
Labor contract negotiations for teachers, American Federation of State, County and Municipal Employees Local 510 and principals, as well as salary and benefit considerations for at-will employees, and a salary benefit package for a new superintendent are in ongoing negotiations, with the most recent meeting held Monday afternoon.
The January and February regular meetings of the Falls School Board will be held on the third Tuesday of those months due to federal holidays on Mondays.
