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12/31/2009 12:00 AMGrant Boelter, MN Sun Newspapers It's been a tough year, but school districts in Dakota County can take solace in one fact. "We're all kind of in the same boat together," said Mark Klett, business director for the Lakeville School District. Dealing with a large and growing deficit, the state essentially froze funding for both the 2009-10 and 2010-11 school years. On top of that, about 8 percent of what districts receive from the state was deferred to next year, which could again be the case the following year. "It's questionable about how the state is going to handle it," said Lisa Rider, business director for the Burnsville-Eagan-Savage School District. Like many districts, those in Dakota County have been forced to come up with ways to make ends meet as they wait for state money to come to their way. Short-term borrowing Rosemount-Apple Valley-Eagan School District Finance Director Jeff Solomon said he's heard that about one in every three school districts has had to take out short-term loans to cover costs while waiting for state payments. If the state delays payments again next year, which sounds likely at this point, he said he expects virtually every district in the state to have to borrow short-term to stay afloat. Lakeville schools had to borrow for the first time in many years to make it through this year, said Klett. If the state delays payments again, they will have to do more of it next year, he said. Rider and Solomon said their districts have been able to avoid borrowing short-term, but will in all likelihood have to borrow next year if the payments are delayed. For District 196, it will be the first time they've ever had to borrow money to cover day-to-day operations. "It's been a very long time since we've done it," said Rider about her District 191. Klett said the silver lining is that interest rates are at the lowest levels they've been in years, which is lessening the burden of the short-term debt. "Because of the interest rates, it doesn't have a huge impact," said Klett, adding it would likely cost his district a few thousand dollars for this years borrowing. "It's not good," he said. "It's just something you need to deal with." The short-term borrowing is something that districts can bite their lips and deal with, Klett said. But if the Legislature or Gov. Tim Pawlenty decide they can't come through with the level funding they promised for the 2010-11 school year, it could mean big problems for districts. A doomsday scenario If the state is forced to cut funding to local school district's to make up for a deficit for next year projected at $1.2 billion, it could mean big problem for school districts. While the Legislature approved the biennial budget during the 2009 session, additional cuts may have to come this year to address the deficit caused by shrinking income tax revenues. Because most districts are already planning cuts for next year to keep up with inflated costs compared with flat funding, a funding cut could mean many more cuts than planned. "We're obviously hopeful, but all districts are nervous," said Klett about the situation, as his district is already looking at trimming in the neighborhood of $4 million in cuts for the next school year. District 196, one of the state's largest, made $10 million in cuts last year and a task force is looking at what budget adjustments might have to be made over the next two years, said Solomon. The results will be presented to the board in January. Rider said her district will also have to make some cuts next year even with state funding, but is trying to ensure that class sizes remain stable. If the money doesn't come through, that almost certainly wouldn't happen, she said. Temporary relief While the state used a large portion of federal stimulus money to cover funding to school districts, individual districts also received money to be used on special education programming. For most districts, it meant keeping money in the general fund that would have been used to subsidize federally mandated special education programs. Since the funding only last for two years, most districts chose to use it to fund existing or temporary programs. "We wanted to avoid building a program we couldn't sustain," said Solomon. "We felt that would do more harm than good." "We've been very cautious to utilize [those funds]," said Rider. "They're either temporary or current programs." Klett said his district applied for stimulus funds to cover differed maintenance costs. The application was not successful when the first round of awards were given out, but he's hopeful they will be included in the next round. Trouble affording extras Districts are also seeing a decrease in participation in extra activities because families are having a harder time paying for them. "In our community education programs, we see the greatest impact," said Rider. She said the district has seen less participation in before and after school programs, as well as a greater need for scholarships for parents who want to send their children to all-day kindergarten, but can't afford it. However, she said it's not quite as bad as what district officials were expecting during a recession. "We saw a decline in those types of revenues, but we actually budgeted for a worse picture," she said. Klett said Lakeville schools have seen a drop in participation as well, noticing it most in programs for secondary students, as the board increased activity fees as a part of the solution to address a $6 million deficit for this school year. "We really don't like any kids to lose the ability to participate," said Klett, as he lamented the effect of the fee increase. District 196 is currently taking a look at increasing activities fees for middle school students and partnering with local athletic associations to make their programs cost neutral. With the economic forecast only beginning to brighten slowly, local districts are mainly focused on what needs to be done to keep the doors open. "Our motto around here is trying to stretch what we have for as long as we can," said Rider. http://www.mnsun.com/articles/2010/01/04/news/cw31yearendschools.txt | |||||||||||||||||||||
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