Owatonna school board gets 2012-13 budget

/ 26 June 2012 / jennifer

Derek Sullivan, Owatonna People’s Press, June 26, 2012 –

OWATONNA – On Monday night, the Owatonna school board members got a look at the future finances of the Owatonna school district — and the future includes an ever-shrinking general fund.

Although the school board in March approved $1.8 million in across-the-district cuts for the 2012-2013 school year, the district still expects to deficit spent by an additional $1.8 million in the upcoming school year.

To pay its bills, the district expects to take $1.8 million out of the general fund, reducing it to about $3.3 million. In 2009-2010, the general fund stood at $7.7 million, or 16.48 percent of the total budget. With state funding becoming more and more uncertain, Tom Sager, the district’s director of finance and operations, said most auditors recommended a school have a healthy fund balance of 15 percent to 18 percent. Currently, Owatonna is at 6.86 percent, although within a year that number could drop down to 2.67 percent.

“It’s very important that a school district have a strong general fund, much like it’s important for an individual household to have some type of savings account,” said Sager. “If something unforeseen arises, a school district can dip into the fund to pay for its services and pay its bills.”

Barring a new levy, the fund balance could disappear by the 2014-2015 school year.

Currently, Owatonna’s operating levy of $691 per pupil generates roughly $4 million. The school board hopes to conduct a community survey this summer, and if local residents seem interested in supporting a new operating levy, it could go on the Nov. 6 ballot. If Owatonna voters support a new levy that matches the state average of $860 per student, the district would receive an additional $1 million.

The Owatonna school district expects a total annual budget of $56,030,803 for the 2012-2013 school year. The final budget will be distributed to board members in December. If approved, it will go on the district’s website.

School lunch prices will increase by 10 cents this fall. The increase is to put the district in line with newly established federal minimums.

Activity fees for students will go up $15 to $130. The increase will raise $22,500. Owatonna sits behind Rochester schools, Mankato schools, Faribault and Albert Lea in activity fees. The additional money should help the activity department increase revenues to more than $200,000, which is still well below its expenses of $875,000 per year.

Even with the fee hikes, Sager said Owatonna is below Big Nine averages in both categories as well as in several others.

“It shows that we are spending money in the areas where we should be,” board member Vilnis Giga said Monday night. “In category after category, we see that we are on the right side of how that money should be spent. It’s reassuring to know that.”

The Owatonna school district does receive more than $1.4 million annually in state funding for capital purchases and projects. These funds are used for the acquisition and maintenance of technology, school books, building furniture, ongoing facility repair and upkeep.

As the board looked at preliminary budget numbers for 2013, board member Vicki Jensen was looking even further ahead. Sager originally said he would provide some budget numbers for the 2013-2014 school year in December. Jensen asked if it was possible to see them earlier, so the board members would have plenty of time to discuss the expected $1.2 million in budget cuts. That vote could happen as soon as March 2013.

Sager said he would try to get the numbers to the school board by late October or early November.

Derek Sullivan can be reached at 444-2372. Follow him on Twitter @OPPSullivan.