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Park Rapids School District faces tight budget future

Park Rapids Area School District's 2009-10 General Fund revenue is mostly comprised of state funding. The state's budget woes leave school districts questioning how much funding they will receive in the future.

The Park Rapids Area School District is looking at a tough few years with state funding questionable and the need to renew the referendum that passed in 2006.

School board members heard an overview of the 2009 payable 2010 budget, along with the 2010-11 proposed levy at a Truth In Taxation hearing Monday night.

Business manager Carol Hutchinson said the total proposed 2011 levy is $4,857,843, a 5.63 percent increase from the 2010 levy at $4,598,979.

The school district is required by law to present information on:

-The budget for the current school year (2009-10) including sources of revenue and expenditures by program area.

-The proposed property tax levy for the next school year (2010-11) including the percent increase over the prior year.

Park Rapids resident Karl Dyre attended the meeting and asked about the operating levy that was approved in 2006. He asked how many years the referendum was for.

It was for five years, with the district in the middle of the fourth year, meaning a year and a half left. The levy will need to go to voters again in 2010.

"If the voters decide not to vote it in, what type of effect ... how hard is the district going to get hit if that's not passed?" Dyre asked.

"It's just gonna devastate us," Hutchinson said.

It's an additional million dollars in cuts, on top of other cuts, board chairwoman Sherry Safratowich said.

"What I'm looking at is, in two years, the federal government, who knows where they will be, the state is not in the best of shape, and here come to the taxpayers and say, we need some more money again," Dyre said. "... We're looking at a crisis coming up here to try and get that passed again."

If the referendum doesn't pass in 2010, it can go to vote again in 2011.

"We're going to make cuts with or without the levy," board member Gary Gauldin said. "You can just double the cuts, double the million.

"This is not a speed bump the state's going through, it's a wash out."

The best case scenario is that the school district stays even, Gauldin said. The worst case is if there is an unallocation of state funding.

Hutchinson said this past year has been difficult because of many accounting changes. Also, grants have been bogged down at the state level, causing delays for school districts, she said.

The school's cash flow has been hurting because of these delays, requiring the district to borrow money and pay interest, Hutchinson said.

Gauldin asked what the fund balance was right now.

Hutchinson said $595,000, which won't last very long. The fund balance is lower because the state decided to defer aid payments to the school, with 73 percent now and 27 percent later, as opposed to a 90/10 ratio before.

The levy is broken up into general fund, food service, community services, debt service and agency funds.

The general fund accounts for most of the daily operating expenses of the district. Some of the expenses include textbooks, building utility costs, insurances, extra-curricular expenses and salaries and benefits.

Food service includes all expenses of the breakfast, lunch and catering programs.

Community services includes expenses for educational and recreational programs that are not part of the regular K-12 and special education programs, such as early childhood and learning readiness programs.

Debt service includes all costs for principal and interest payments for the district's voter approved building bonds.

Agency accounts for expenses of activities when the funds belong to others, but the district is the trustee.

The school board approved 2009-10 budget revisions Monday night but won't take action on the final property tax levy until the Dec. 21 meeting.