School board hopes for slice of stimulus packageLast week’s icy roads delayed the Cloquet School Board’s regular meeting to Tuesday this week, and it also allowed time for some rays of good news to enter the bleak financial spreadsheets of the district.
By: June Kallestad, Pine Journal
Last week’s icy roads delayed the Cloquet School Board’s regular meeting to Tuesday this week, and it also allowed time for some rays of good news to enter the bleak financial spreadsheets of the district.
Tuesday’s passage of the federal economic stimulus package brought hope of funding for the next two years for specific areas such as construction projects ($297,200 projected), Title One ($202,000 projected) and Special Education programs ($578,700 projected). But Superintendent Ken Scarborough wasn’t ready to start counting chickens until those golden eggs hatch. How much the district will actually receive and what limitations there will be on the funds are not clear yet.
Instead, he laid out what he does know about the district’s projected difference between revenues and expenditures for the current school year. A shortfall is likely and could be upwards of $891,000 which, without a significant increase in state funding, could remain the same for next year.
“These are ballpark figures,” said Scarborough. “There will be a lot of changes based on economic factors and legislative action. However, we need to start planning for budget reductions because of statutory deadlines we have to meet.”
He will present the board with a range of budget reduction scenarios to consider in the meetings ahead.
“We don’t know how much,” he said. “We’ll find a range that the board is fiscally comfortable with… and will plan on reducing our carry-over funds to buffer some of the financial impact we’re facing.”
Scarborough praised the conservative accounting of district Business Manager Kim Josephson for a fund balance of slightly more than $3 million that could help offset the potential deficit.
Talk of budget cuts had board member Sandy Crowley questioning two additional staffing recommendations before the board. The board approved making a half-time Specific Learning Disability teacher position at Churchill into a full-time position and adding a Consistent Support Paraprofessional part-time position at the middle school. Crowley opposed the motion.
Scarborough explained that the paraprofessional at the middle school is required and the district has no choice. The caseload of the learning disability teachers at Churchill is “astronomical,” he said. “We could not meet the needs identified in the IEPs [Individual Education Plans].” He added that he hopes the Stimulus Package funds will help them maintain the positions.
During the board’s working session prior to the regular meeting, discussion focused once again on whether to levy funds to meet the school district’s obligation to retired district employees who are entitled to Other Post-Employment Benefits (OPEB), a liability of some $11 million, according to Josephson. A recent drop of more than one percent in the interest rate for bonds caused Josephson to present the new information to board members. The lower the interest rate on the bonds the lower the interest rate will be for taxpayers to pay back the bonds.
Josephson presented the board with two options: selling bonds at $4 million with a 12-year levy term, and selling bonds of $6.4 million with a 20-year levy term. The $4 million bond would generate about $430,000 over 13 years and cost a homeowner with a $100,000 home $5 a year. The $6.4 million bond would generate $430,000 over 25 years and would cost a homeowner with a $100,000 home $10 a year. Josephson used an average interest rate over a 20-year spread of 4.78 percent to figure his calculations, knowing that fluctuations are not precisely predictable.
“This bond sale would be to handle our current liabilities,” said Scarborough during the working session, “then we work our way out of those liabilities into the future. Future employees will not have the OPEB option.”
No action was taken on this agenda item by the board.
Also Tuesday, the board accepted the resignation of District Buildings and Grounds Director Gene Salmi. Salmi has worked for the Cloquet School District since September 2006 and was the first to hold the position. The board thanked him for his dedication in heading up many projects. A request was made to the board to post the position, but that effort failed in a 2-2 vote. Board members Sandy Crowley and Jim Crowley voted against the measure while Ron Gittings and Treasurer Duane Buytaert voted in favor of it. Chair Gary Huard and Clerk Stephanie Hammitt were absent.