State aid increase small; expenses big

State aid increase small; expenses big By: Randy Dockendorf
Yankton Press and Dakotan
and
David Lias
Plain Talk Faced with falling state aid, the Vermillion school board may opt-out by another $300,000 in local property taxes and still use $194,000 from reserves for 2008-09. Superintendent Mark Froke gave an overview of the districtâ�?�?s preliminary budget last month. The board plans to hold its formal budget hearing in July. â�?�?A few months ago, we ran into apparent problems with development of this budget, so we got the butcher block paper out,â�?he said. â�?�?We have got to the point where the feel the budget is viable.â�? The preliminary budget calls for $7.6 million in the general fund, with $3.1 million from local sources, $4.1 million from the state, $230,000 from federal and intermediate sources and $194,000 from reserves. That comes to about 40 percent from local property taxes, 54 percent from the state and 6 percent from other sources. The Legislature has raised state aid â�?�? which is based on enrollment â�?�? by a statewide average of 2.88 percent for the 2008-09 school year, Froke said. State aid averages about $4,800 per student, he said. However, Vermillion will see only a 1.7 percent raise because its enrollment dropped last fall by 34 students to 1,288, Froke said. Under the state-aid formula, Vermillion was credited with half the shortfall, or 17 students. Froke called the 1.7 percent increase in state aid â�?�?quite confining.â�? He was particularly concerned about maintaining staff. â�?�?We have to keep salaries so we are competitive in hiring teachers,â�? he said. In response to the anticipated funding shortfall, the school board has cut an administrative position through attrition, Froke said. In addition, the board will not replace the director of buildings and grounds, who has taken a position outside the school district, Froke said in separate comments. The principals will supervise maintenance in each of their buildings, the superintendent said. Even with the cuts, the Vermillion school administrators did not see the district as able to function without raising taxes and using reserves, Froke said. The Vermillion school district is in the third year of a five-year opt-out, allowing the school board to exceed the state property-tax limit by a maximum of $800,000 annually, Froke said. The district has asked for only $500,000 of the allowed amount during the past two years, he said. â�?�?But with the loss of enrollment and revenue, we need to consider taking it up to $800,000 again,â�? he said. Even with the $800,000 opt-out, the district would still use $194,000 of its fund balance, or reserves, said district business manager Sheila Beermann. The districtâ�?�?s fund balance is the equivalent of about 17 percent of its general fund, she said. All of the districtâ�?�?s Capital Outlay fund of $1.3 million would come from local sources. The $1.3 million for special education would include $620,000 from local sources, $36,000 from fund balance, and $637,000 from state and federal sources. The district would use about $36,400 in reserves to supplement the special-education fund. The other proposed parts of the budget are pension fund, $129,000; bond redemption fund, $280,000; food service fund, $592,000; and after-school program, $71,000. In addition, the district is By Randy Dockendorf Yankton Press & Dakotan and David Lias Plain Talk Faced with falling state aid, the Vermillion school board may opt-out by another $300,000 in local property taxes and still use $194,000 from reserves for 2008-09. Superintendent Mark Froke gave an overview of the districtâ�?�?s preliminary budget last month. The board plans to hold its formal budget hearing in July. â�?�?A few months ago, we ran into apparent problems with development of this budget, so we got the butcher block paper out,â�?he said. â�?�?We have got to the point where the feel the budget is viable.â�? The preliminary budget calls for $7.6 million in the general fund, with $3.1 million from local sources, $4.1 million from the state, $230,000 from federal and intermediate sources and $194,000 from reserves. That comes to about 40 percent from local property taxes, 54 percent from the state and 6 percent from other sources. The Legislature has raised state aid â�?�? which is based on enrollment â�?�? by a statewide average of 2.88 percent for the 2008-09 school year, Froke said. State aid averages about $4,800 per student, he said. However, Vermillion will see only a 1.7 percent raise because its enrollment dropped last fall by 34 students to 1,288, Froke said. Under the state-aid formula, Vermillion was credited with half the shortfall, or 17 students. Froke called the 1.7 percent increase in state aid â�?�?quite confining.â�? He was particularly concerned about maintaining staff. â�?�?We have to keep salaries so we are competitive in hiring teachers,â�? he said. In response to the anticipated funding shortfall, the school board has cut an administrative position through attrition, Froke said. In addition, the board will not replace the director of buildings and grounds, who has taken a position outside the school district, Froke said in separate comments. The principals will supervise maintenance in each of their buildings, the superintendent said. Even with the cuts, the Vermillion school administrators did not see the district as able to function without raising taxes and using reserves, Froke said. The Vermillion school district is in the third year of a five-year opt-out, allowing the school board to exceed the state property-tax limit by a maximum of $800,000 annually, Froke said. The district has asked for only $500,000 of the allowed amount during the past two years, he said. â�?�?But with the loss of enrollment and revenue, we need to consider taking it up to $800,000 again,â�? he said. Even with the $800,000 opt-out, the district would still use $194,000 of its fund balance, or reserves, said district business manager Sheila Beermann. The districtâ�?�?s fund balance is the equivalent of about 17 percent of its general fund, she said. All of the districtâ�?�?s Capital Outlay fund of $1.3 million would come from local sources. The $1.3 million for special education would include $620,000 from local sources, $36,000 from fund balance, and $637,000 from state and federal sources. The district would use about $36,400 in reserves to supplement the special-education fund. The other proposed parts of the budget are pension fund, $129,000; bond redemption fund, $280,000; food service fund, $592,000; and after-school program, $71,000. In addition, the district is looking at a loss of federal dollars for the classroom-size reduction grant, Froke said. â�?�?We have been using that money for three teachers and staff development,â�? he said. â�?�?Right now, we are talking about how we would cover the loss of that money.â�? Board member Dave Stammer warned against the district using too much of its reserves and leaving too little for emergencies. In the meantime, the finance committee will continue its work on the budget, Stammer said. â�?�?We are meeting again to get these dollars down a little bit more,â�? he said. The general fund assumes a 3 percent growth in the districtâ�?�?s assessed valuations for 2009. In addition, all textbooks and transportation are budgeted in the general fund. Health insurance was adjusted using a 8.86 percent increase effective July 1, 2007, and a 10 percent increase effective July 1, 2008. Dental insurance was increased by 6 percent effective Jan. 1, 2009. Froke went over the districtâ�?�?s capital-outlay requests, and district technology coordinator Jim McGuire presented plans and funding for the coming school year. At its May meeting, the board also made the following personnel decisions: â�?¢ Accepting the resignation of Casey Oâ�?�?Connor as wrestling coach and the hiring of Joe Delvaux as the new coach. â�?¢ Approving the new contracts of Kelly Bischoff as first grade teacher, Rebecca Solberg as third grade teacher, Kellsey Koch as Title I teacher, Suzanne Johnson as middle school language arts teacher, Tanna Miller as high school physical science teacher and Dustin Larson as speech therapist. Froke said he felt fortunate to sign those teachers and staff members. â�?�?The competition for quality teachers is keen, to say the least,â�? he said. â�?�?We have not had that many applications, but we feel fortunate that the quality level is quite high for the ones we recommend.â�?

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