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School building projects lead to 26% tax hike in Wrenshall

The Wrenshall School District’s audit and levy presentation showed a 26% increase in the total tax levy to cover costs for the district’s construction plan.

Wrenshall School File.jpg
Wrenshall School Clint Austin / 2021 File / Duluth News Tribune
Clint Austin / 2021 File / Duluth News Tribune

While there were no issues from the Wrenshall School Board on the district's audit or tax levy during the truth in taxation meeting Wednesday, Dec. 8, residents will see a 26.31% increase in their total tax levy for the district.

The total levy funds will increase from $1.18 million to $1.49 million, an increase of $311,000. Superintendent Kimberly Belcastro said the increase in the tax levy is due to funding for building projects currently in the works in the district.

Jen Smith, a financial specialist from Arrowhead Regional Computing Consortium, explained to the board that 62.36% of the levy payments would be used for debt service, which would equal $931,000.

The funding for the district's projects include a $3.7 million general abatement bonds for the planned career and technical education program, which the board approved in September.

The increase in levy would also make up 26% of all revenues for the next year.

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Smith said the proposed budget for the next year would have a projected deficit of $3.77 million. However, that deficit is made up of capital expenditures.
“That kind of skews things because we have the building construction fund in there,” she said.

Overall, the district is in a good position to cover its general fund costs with revenues.

“If it wasn’t for the building construction fund, most of your activity happens within the general fund,” Smith said.

The district audit was also presented to the board during the meeting and Belcastro said it was a good representation of where the district stands and where it is going in the future.

According to the audit, the district brought in $137,000 more in revenues than officials anticipated. The jump in revenues also increased the district’s general fund balance from $365,000 to $540,000.

One reason for the increase in revenues is due to COVID-19 funds. However, the pandemic also increased expenditures in the district.

The unassigned portion of the general fund, or the district’s rainy day fund, was $347,000 at the end of the fiscal year.

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The debt service fund came in lower than projected, but its expenditures did as well, meaning the district still ended up with a restricted fund balance of just under $100,000.

The building fund for the district saw a large increase in expenditures, from a projected $5.08 million to $5.92 million. However, after issuing bonds the district came in lower than they had budgeted at $4.92 million.

After the expenses and bonding were calculated, the district still had $2.93 million left in the building fund.

Belcastro said after the meeting that the district is getting things lined up for the future.

“I think we had a good night overall … with our audit and even with our truth in taxation,” she said. “It looks like it was so much, but we are under construction.”

The audit and levy presentations were a depiction of where the school district is headed and how they plan to fund its future, she said.

“I think we should feel real good about what we’ve accomplished and where we are headed,” she said. “We are positioning ourselves well.”

Both the audit and tax levy are scheduled to be on the agenda of the school board's next meeting Monday, Dec. 13.

Dylan covers the local governments of Cloquet and Carlton County, as well as the Esko and Wrenshall school boards for the Cloquet Pine Journal.
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