The School District 166 school board tackled complex budget issues and decided to issue tax abatement bonds at the June 19, 2014 board meeting.
The fiscal year 2015 budget was adopted. Although there are many complexities involved in the budget calculations, expenditures from the unreserved general fund and the transportation fund are projected at $6,976,938 versus revenues of $6,538,948.
The balance of the same funds totaled $1,177,620 on June 30, 2013 and is expected to total $793,254 on June 30, 2014. The projected balance of the unreserved general fund and the transportation fund is expected to total $355,265 by June 30, 2015.
In a similar fashion, the capital fund which totaled $148,156 in 2013 is expected to decrease to a negative $179,947 by June 2015.
State statute requires that a school board adopt a budget but it can still be amended throughout the year. Superintendent Beth Schwarz presented the figures and reviewed some of the budget complexities such as $175,000 for the bus garage repair which was damaged by this winter’s heavy snow and $225,000 for the roofing project over the administration and cafeteria areas. The budgeted figures also do not include $575,000 in likely revenues such as possible grants and state aid that cannot be completely counted on.
Schwarz also reported that the actual expenses varied less than 2.4 percent from the budgeted amounts in fiscal years 2012 and 2013. She also pointed out a decrease of over $100,000 in administrative personnel costs, which now includes two principals instead of one, versus 2009 figures.
District to issue tax abatement bond
The board agreed to the sale of a $100,000, five-year general obligation tax abatement bond to finance the renovation of the parking lot. A representative from PMA Securities, of Albertville, Minnesota was there to act as the district’s financial advisor in the sale. It was decided to pursue the abatement bond as opposed to depleting the general fund for the renovation. Parking lots are the only item that abatement bonds are allowed to be used for by a school district in Minnesota.
The bond will be purchased by the Big Lake School District with ISD 166 receiving the funds on July 1, 2014. All three of the banks and the credit union in Grand Marais declined the opportunity to make the purchase. $90,000 from the sale proceeds will go toward the renovation itself, while the balance will cover the $5,000 fee from PMA and additional counsel fees. Repayment of the bond by ISD 166 will be at the rate of $20,000 per year plus a total of $3,387.11 in interest, which amounts to an average rate of 1.288 percent.
The property tax imposed on all properties in the school district by the resolution will be for the tax years payable in 2015 until 2019. The financial advisor stated the tax itself should amount to 96 cents per $100,000 value on a home in Cook County. Superintendent Schwarz stated that this may become a two-phase project and there may be the issuance of an additional abatement bond next year if costs go beyond the current estimate.
In other news
. Jim Schwarzbauer of the Lake Superior Carl Perkin’s Consortium gave a presentation concerning a grant which paid approximately $7,000 for the cost of two three-dimensional printers for the school. The consortium is a group consisting of Lake Superior College and eight North Shore and Duluth area high schools including Cook County High School. Schwarzbauer hopes to be able to increase the grant to $10,000 next year.
. Board member Deb White directed Schwarz to investigate the cost and the pros and cons of the district possibly hiring a grant writer. Schwarz agreed but also stated that she does not believe that it would be necessary or a good use of school funds.
. White also reported on meeting with the Grand Portage summer school program. The program currently provides breakfast and lunch for about 40 students.
. The board approved an expenditure of $200,164 over the next three years for enhancements in the language arts curriculum. Schwarz said this will bring the elementary school to the ratio of one electronic device, such as an I-pad, for every one student. The high school ratio is already at two to one. The district normally allows for an average of $60,000 per year to be budgeted for the curriculum cycle. The language arts commitment will force a review of the cycle so as not to short fund other areas of learning.
Leave a Reply