The Lake Superior School Board is considering pursuing a voter-approved operating levy or building bond to be included on a future ballot, likely in 2021. The board has not determined an amount, yet, as they are in the beginning stages of the process.
District leaders are considering a referendum because the district is seeing a continual downward trend in its fund balance reserves, said Superintendent Bill Crandall. Fund balances reserves are required to meet and manage operating expenses and to provide adequate cash flow throughout the school year.
The fund balance reserves were at $4.02 million during the 2015-16 school year, which is roughly 30% of the district's operating costs, according to a report from business manager Sara Girard. Deficit spending for the past 4-5 years has brought the fund balance reserve to $3.1 million or 20% of the district's operating costs.
The Minnesota School Board Association recommends that districts have a reserve balance of 17%, which would be enough to operate for a few months if there was a cash flow issue, Crandall said.
"So we could keep the lights on and pay our staff for two months if it came to that," he said.
But if the district continues to pull $70,000 to $100,000 from its cash reserves annually, the reserve level would dip below that 17% threshold.
The board asked Crandall to explore referendum and bond options last spring. The board decided to table the discussion following a presentation from Steve Pumper from PMA Financial, a Twin Cities-based agency that provides school finance guidance.
The board could either focus on specific issues, such as updating technology across the district, improving school safety and working on infrastructure and foundations. With an operating referendum, the fund would be used to develop curriculum and maintain the district at the same financial level.
Crandall also said the board could chose to hire a firm to do research as to what the community would support.
"They would advise the board that if you were to go out and ask for X, you'd have 60% support for it. That's what they do through community meetings, phone calls and more to find out where the community support sits," Crandall said.
This route would also cost money, and at the board's request, Crandall said he would reach out to gather proposals from a few firms before the next school board meeting.
The board also requested more information as to the price tags attached to the wish list items.
"It's hard to know what we should go for if we don't have a good idea what the costs are and the biggest priorities," said board member Cindy Ryder. "And we need to know the tax impacts before we make any big decisions."
The next board meeting will be held at William Kelley Schools on March 10. In addition to the referendum information, the board will discuss the current budget and get an update on next school year's budget.