833 could face shortfall by 2011School District 833 Superintendent Tom Nelson told school board members last week that the district is in “very good shape” financially.
By: Judy Spooner, Woodbury Bulletin
School District 833 Superintendent Tom Nelson told school board members last week that the district is in “very good shape” financially.
He talked to the board during a retreat held at Throwbacks in Woodbury on July 10 that included the long-term outlook for district funding.
Assuming there will be a two-percent increase in education funding from the Legislature each year, the district has unallocated funds to cover revenue shortfalls for the next two to three years, according to a model set up by Aaron Bushberger, district finance director.
The projection, however, shows the district using more unallocated money each year because state funding is not keeping up with district expenses, Nelson said.
Although the state gave more money to districts to pay for special education, the district still has to make up the difference, he said.
Under the funding model, the budget pinch will probably hit the district in the 2010-2011 budget.
If nothing else changes, a deficit is projected for 2011-2012 when the district would have to consider asking voters for more money with a referendum.
Salary settlements affect the budget because personnel is the largest cost. A one-percent increase for every existing employee in the district would cost $1.3 million, Nelson said.
Teacher salary negotiations begin next spring for the contract that is up in June of 2009.
One of the things that could affect the budget is a board decision regarding the district’s Internal Service Account that covers retiring teacher severance pay and health benefits.
The account is nearly 100 percent funded at $2.5 million, Nelson said, adding that District 833 and the Osseo School District are the only districts in the state that have fully funded internal service.
The district can put the money in an irrevocable trust, Nelson said, but it would prevent using any of it on a short-term basis.
Other options include bonding for the internal service fund and budget cuts.
Board member Jim Gelbmann suggested the district band together with other metropolitan school districts when asking taxpayers for more money, a move Nelson doesn’t favor.
“We’re still a low-spending district,” Nelson said. “The question is how do we maintain what we have.”
“If we know there will be a problem, we shouldn’t start new programs,” said board member Ellen Ayers. “We also need to increase the student achievement piece.”