The Brainerd School District should find out Friday how the education bill expected to be approved by Minnesota lawmakers Wednesday will affect the district's financial outlook over the next two years, board members learned Monday.
Steve Dickinson, the district's director of business services, said the 2005-06 preliminary school district budget included a $1 million increase in projected state revenues, a conservative estimate. Dickinson said he believes the district will receive about $1.3 million in new state funding if the education funding bill passes Wednesday by lawmakers. He'll find out details on the impact on Brainerd schools from the state Department of Education on Friday, he said.
Board members authorized a resolution Monday for the sale of $4 million in general obligation aid anticipation certificates for the district to use next year if it experiences cash flow problems as a result of a dwindling unreserved fund balance. In addition to $1.25 million in staff and program cuts to offset the district's projected $3 million budget deficit for the 2005-06 fiscal year, the district approved a $1.2 million spend down of its unreserved fund balance. The unreserved fund balance, which was at 11 percent, or $6.7 million, on June 30, 2004, is projected to be spent down to about $5 million, or 8 percent of the total budget, by June 30. The district has historically kept its unreserved fund balance around 11 percent to maintain a healthy cash flow so the district wouldn't have to take out short-term loans as it is now.
Dickinson said the decreased unreserved fund balance may create cash flow problems for the district by late next spring if the district is waiting for state and federal revenues while continuing to pay bills and employees. The loan will act as a safety net in case the district is short on cash during the upcoming year.
"To be honest, I don't think we're going to get there but we may come close," said Dickinson.
If the district doesn't use the $4 million 13-month loan, it will draw interest on the funds. Dickinson said the district, if it doesn't tap into the funds, could earn about $10,000 to $20,000 in interest. He said about 65 percent of school districts in the state use the short-term loans to ensure there aren't any cash flow problems.
Dickinson said there have been times during the past school year when the district nearly spent down its unreserved fund balance on a short-term basis because of payroll costs and delays in revenues received.
The board learned Monday that special education costs continue to grow in the district. Assistant Superintendent Gary Phillips said two students, ages 16 and 18, have moved into the district and will require special education services with a cost of about $150,000 a year. Phillips said the students are low-functioning and will not be mainstreamed into the student population. The two students will require their own special education instructor, two or three educational assistants and a specialized room of their own at the high school. Phillips said in the past students with high needs and violent tendencies would be housed at the state hospital. Students with high special education needs may continue to be taught in public schools until they are 21.
Dickinson said the district generally receives about 50-60 percent in special education reimbursement costs but not until about 1-1/2 years later, which in the meantime can affect funding for other school programs. Phillips said the district should be reimbursed about $140,000 out of the estimated $150,000 annual cost to provide services for the two new special education students.
During the 2004-05 school year, the district spent about $12.85 million in special education services, or 20 percent of the district's $63 million budget. The district also received about $10.5 million in special education funding at a net cost of about $2.35 million last year. The district spent $666,470 last year for special education services for students who were moderately to severely mentally disabled.
In other board action, the district approved the following new certified employees: Michele Collins, second-grade teacher; John Jacobson, dean of students; Michael Svir, fourth-grade teacher; Heather Wagner, kindergarten/Title 1 teacher; and Janelle Ortiz, Early Childhood Special Education teacher.
The board accepted the resignation of Debra Balzer-Plagemann, Brainerd High School career center coordinator.
The board passed a resolution establishing a school board election with primary if needed. If the board has more than six candidates for the three four-year school board seats now up for election, a primary election will be noon to 8 p.m. Sept. 13. The general election is planned for Nov. 8.
The board approved a lease agreement with the city of Brainerd for $40,000 a year for use of the ice arena facilities at the Brainerd Area Civic Center. The four-year agreement allows the district to use the arena for its boys' and girls' school programs. The district previously paid $60,000 a year for use of the ice arena facilities but now that Forestview Middle School in Baxter has an outdoor ice rink facility, the need for ice time at the indoor rinks was reduced.
JODIE TWEED can be reached at email@example.com or 855-5858.
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