After a nearly 44% increase in the levy for 2020, Wrenshall taxpayers will get a break on the school district’s portion of the property tax levy in 2021.

During the truth in taxation meeting Wednesday, Dec. 9, Jennifer Smith, an accountant with the Arrowhead Regional Computing Consortium in Duluth contracted by Wrenshall, presented the district’s budget and levy, which showed a 16.4% decrease anticipated for next year.

The levy is expected to decrease by nearly $233,000 to a total of approximately $1.2 million in 2021. The decrease is related to lower than anticipated health insurance costs as well as reductions in food and fuel expenses in 2020.

The large increase in 2020 was related to a $9.3 million health and safety bond the board approved to replace the heating, ventilation and air conditioning system and to make fire suppression upgrades at the school.

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The budget shows the school with a nearly $5 million deficit this year, but in reality, the district received the money from the 2020 bond and is spending the money to finish the renovation project in 2021.

“Your revenues flowed into the building construction fund in prior years when those funds were issued and now you're spending down the balance in that fund,” Smith said during the meeting. “So really, you almost have to look at building construction separately, and then you see that in the absence of the building construction fund, you're looking at a nearly balanced budget.”

Without the construction expenditure, Wrenshall’s expenses and revenues both total approximately $5.9 million.

No members of the public spoke or asked questions of the board during the meeting.

The Wrenshall School Board will vote to finalize the 2021 levy during its meeting at 6 p.m. Monday, Dec. 14.

District receives clean audit report

Wrenshall received a clean audit report following the truth in taxation meeting.

The audit report from Wipfli LLC found the school was compliant with accounting standards, but found a significant deficiency in internal controls because it contracts with Wipfli to prepare its financial statements. Wrenshall does not have a full-time business manager, and Wipfli is required to note the deficiency in the audit each year.

The increase in revenue and decrease in expenditures allowed the district to increase its fund balance across a number of categories, including an approximately $45,000 increase to Wrenshall’s unrestricted fund balance to $212,507.

The small increase is the first in several years for the district. Wrenshall’s fund balance fell from a high of $576,350 in 2016 to a low of $167,084 in 2019.

While the increase is good news, the unrestricted fund balance is about 4% of the district’s total expenditures for 2020. The Minnesota Department of Education recommends districts keep at least 8-10% of it’s total expenses — or about one month — in the unrestricted fund.