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School Board reduces levy even further

The Lake Superior School District board voted to reduce the district’s levy by more than 8 percent during its meeting Monday in Two Harbors.

The proposed 2016 levy was already more than 3.5 percent less than the 2015 levy, but board member Dwight Moe proposed to lower it by a further $250,000 during the meeting bringing the total levy reduction to more than 8.7 percent.

Moe said the extra levy last year was taken when the district thought it was returning to a five-day week and would lose the estimated $250,000 savings the four-day week generates. The state changed its position later in the school year after the levy had been set and the district couldn’t change it. He said after recent events, the only fair thing would be to return those savings to taxpayers.

“In view of what’s happened in our local economy, particularly in Silver Bay, it’s going to be difficult for people,” Moe said. “I think it’s unconscionable to levy the max again when in fact we aren’t doing what the levy is designed for.”

The only board member to oppose the measure was Tom Burns, who said he felt a responsibility to make students the priority. He cited the presentations of teachers in October describing the benefits of new curriculums purchased over the summer. The purchases included new social studies and math curriculums featuring online components to help students get real time feedback or access their books from home using the Internet. Burns felt those purchases could not have been made without the levy last year and more curriculum purchases are also scheduled for this year.

“One of the concerns would be if in the future we have less students or something changes at the state level as far as funding we would have to dip into our fund balance,” said Superintendent Bill Crandall. “We’ve been fortunate, the state’s been very supportive of education over the last number of years and so that’s helped our district out with the budgeting purposes.”

Crandall said as long as the student population remains consistent or goes up, they will be able to continue planned curriculum and other purchases despite the lowered levy. The district had a $1.1 million surplus last year because they were on the “winning side of students leaving,” according to Crandall, meaning more students came into the district than left it last year.

“Moving forward with the curriculum, we certainly hope that would not be affected,” Crandall said. “When it gets down to it, time will tell.”

The surplus means the district will also be able to add money to the fund balance, whereas over the past few years, they have needed to dip into it. Some of the money in the surplus is already designated for certain expenses, like a new bus lease that will cost an estimated $250,000. Most of it, though will be added to the fund balance. Auditors recommend schools keep two months operating costs in the fund balance or in reserve and that’s what the district currently has, Crandall said.

Board approves bond refinancing

The board also approved the refinancing of the school building bond used to build Two Harbors High School in 2006. Michael Hart, a representative of Northland Securities, reported to the board in October the district could save $1.5 million over the remaining seven and a half years left on the bond. Hart returned to the district Monday and presented even better news. As a result of the district’s credit score, he was able to obtain a lower interest rate on the bond than what was presented in October and the savings went up to $1.6 million over the remainder of the bond. Instead of a 1.82 percent interest rate, the district received a rate of 1.71 percent which produced the savings.

The bond is scheduled to be paid off in April 2023.

Jamey Malcomb

Jamey Malcomb started as a reporter for the Lake County News-Chronicle in August 2015. Malcomb is a native of North Carolina and holds a bachelor's degree in English and history from the George Washington University and a master's degree in education from George Mason University in Fairfax, Va. Malcomb moved to Minnesota in July 2012 and previously worked as a sports clerk and news assistant at the Duluth News Tribune. He is the beat writer for the Lake County Board of Commissioners, Silver Bay City Council and high school sports in Lake County. 

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