Monticello School Board approves levy for 2013-14

The Monticello School District’s annual Truth in Taxation meeting Monday evening yielded a 1.89 percent levy increase for the 2013-2014 school year and included a total certified levy of $10,773,434.
This number is down from projections a month ago, which had called for a 3.16 percent bump.
The projected number was released before all final numbers were in, to be in accordance with state deadlines, but business manager Tina Burkholder said actual numbers caused the figure to drop. She said the biggest reason for the decline was the smaller than estimated financial contribution needed for the OPEB (Other Post Employment Benefits) fund. When each individual contract was scrutinized for sunset language, it was found that obligations were reduced by $131,631 due to the sunsetting of specific benefits.
While other funds in the school district budget also saw decreases, such as the debt service fund’s $91,000 reduction from bond refinancing, the general fund saw an increase of $121,302; Burkholder said this occurred because final figures were based off actual numbers versus previous estimates.
The reduction for excess fund balance increased $388,015 over last year, but Burkholder reminded the board that this was due to a much larger than normal reduction for excess fund balance last year due to a previous facilities project that came in under budget.
Burkholder explained that the district collects 105 percent of their bond and principle payments for their debt service fund, in accordance with state law, to compensate for potential delinquent tax payments. When the fund balance grows large enough this excess gets returned to the debt service fund. Last year the excess fund balance return was a larger-than-normal $810,000, compared with this year’s $372,000 reduction.
Burkholder said many people would see a reduction on the school district portion of their taxes as a result of the small increase paired with decreasing property values. The net levy on referendum market value went down from $4,011,484 in 2012 to $3,974,863 in market value for 2013. Total referendum market value went up in the past year about $900,000, in large part because of improvements taking place at Xcel Energy’s nuclear power plant, which Burkholder said is increasing the district’s land value.
Of the $53,654,081 in the budget to spend next school year, 80 percent will be spent on staff – either salaries and wages or employee benefits. Purchased services such as transportation (11 percent), supplies and materials (4 percent), capital (3 percent) or other (2 percent) round out the budget.
The school budget is made up of 74 percent state aid, 6 percent federal aid, 13 percent property taxes ($5,776,563) and 7 percent categorized as “other sources.” Of the local property tax portion, 31 percent of those funds come from local discretion and the other 69 percent from voter approved referendums.
During the public comment portion of the meeting, attendee Timothy Myers asked if this was the maximum amount that could be asked for. Burkholder responded that $10,962,693 was the maximum amount that could be requested based on the previous estimates, but that the actual levy will be $10,773,434 with all final numbers in place. Myers said though he wasn’t specifically asking for them to raise his taxes, he wondered why the board doesn’t ask for the maximum amount allowed to prevent the district from needing to borrow funds to make up for the portion of their budget the state delays each year.
“Instead of having my taxes go down $25, keep them the same and then the school district can keep that in an attempt to build the fund balance so maybe we won’t have to borrow so much money,” Meyer said, “because it costs thousands of dollars now, tens of thousands, to borrow that money every year, if I’m not mistaken.”
While the board concurred with that logic, board chair Scott Hill said the board tries to keep the levy number relatively consistent from year to year rather than having big swings.
“Our philosophy is asking for what they need and what we think we’re going to use, not just taking everything we can get,” board chair Scott Hill said.
“Best practice and ethically, we should only take money that is entitled to us,” Burkholder added. “And in reality, the district is levying to the max, it’s just the numbers were not as high as the initial estimates came in as.”
Joe Holthaus from Monticello Township asked where the hockey arena fits into the budget.
Hill said it is a separate line item under the community education fund.
Board member Robbie Smith added that if the year ends in a negative for the hockey arena, the hockey association must cover the loss so that the numbers come out to zero by the end of each year.
If there is a profit, this will be split evenly between the school district and the hockey association.
“We couldn’t be taking money out of the classroom or somewhere in the general fund to pay for something the voters didn’t have a choice on [the hockey arena],” Hill said. “So that is how we negotiated it – to protect the voters.”
Final levy adoption will take place at 5 p.m. Monday, Dec. 10 in the middle school boardroom. There will be an opportunity for the public to speak and ask questions.