Park Rapids School levy will get 25% bump in 2022
The tax hike should hurt less than expected before November's bond vote, business manager Kent Fritze told the school board on Monday.
The Park Rapids School Board on Dec. 20 approved the school district’s revised 2021-22 budget and 2022 property tax levy.
In a truth-in-taxation presentation, business manager Kent Fritze reminded the school board that in September, they certified the preliminary levy at the maximum amount determined by the Minnesota Department of Education (MDE) based on the assessed value of properties in the district.
Normally, Fritze said, the final levy cannot be more than the preliminary levy, but in November the school district passed a referendum for a $51.65 million school building bond issue.
The total levy payable in 2022 is $6,747,485, he reported. That includes a general fund levy of about $2.4 million, a community service levy of $195,000 and a debt service levy of $4.15 million. Debt service accounts for 61.4% of the total levy, Fritze noted.
Compared to the 2021 levy totaling $5.4 million, that’s an increase of about 25% or $1.35 million, with a $1.5 million increase in the debt service levy alone.
To explain the changes, Fritze pointed out a $32,000 decrease in the levy for long-term facility maintenance, due to new construction planned in the next few years. Meanwhile, the increase in debt service is due to payments on new bonds issued to build the new facilities.
Frtize compared other districts to Park Rapids Schools’ 25% levy increase from 2021 to 2022. The Menahga school levy is increasing 14.4%, Nevis 4.8%, Wadena-Deer Creek 1.3% and Sebeka 0.5%, while the Detroit Lakes school levy is decreasing about 3%.
“Quite a few of them have already had referendums in the past couple of years, so they are now set,” said Fritze, speculating that their levies held level this year after a previous debt service increase.
He recalled that before the referendum, it was estimated that the increased debt service levy would translate to an additional $104 per year, or $9 per month, in property taxes for a $200,000 home.
However, Fritze said, a recent increase in the district’s tax capacity – due to the growing number of homes and businesses in the district – means the tax increase on that $200,000 home will actually be only $55 per year, or about $4.58 per month.
“A lot more people are moving up from the Cities, and they’re making this town their permanent home,” he said.
Without the new debt service levy, Fritze said, the district’s tax levy would have decreased about 6%. He explained this was due to a drop in enrollment and the district retiring its existing debt.
He said district staff has been working with Ehlers, Inc. financial advisors to ensure tax levies stay about the same from year to year after this year’s 25% jump.
In the budget for the fiscal year ending June 30, 2022, Fritze projected:
General fund revenues totaling $21,295,428 and expenses totaling $21,321,731, ending with a fund balance of about $11.4 million.
Debt service revenue of about $4.4 million and expenses of $2.7 million, ending with a $2.5 million fund balance that will be used to make payments due in February 2023.
Food service revenues and expenditures in the $1 million range with a net loss of about $5,000, designed to bring the fund balance down per MDE guidelines.
Community service revenues of about $890,000 and expenses of $880,000.
Total revenues, for all funds, of $27,653,857 and expenses of $25,919,652, leaving projected fund balances totaling $14,430,714, a $1,666,000 increase on the year.
Fritze acknowledged that most of the schools’ budget comes from the state funding formula, keyes to enrollment, which peaked in 2019 at 1,670 and decreased the last two years due to the COVID-19 pandemic. However, he estimated that enrollment is starting to go up again.
He noted that the state legislature has increased MDE’s funding formula almost every year since 2010-11, with the percentage change increasing as well and the latest formula, for 2021-22, increasing 2.5%.
General fund revenue sources are split between state revenues at 78.6%; local revenues, including taxes, local grants, ticket sales and gifts at 14.8%; federal revenues at 6.5% and resale or lease proceeds, such as disposing of a surplus bus at 0.1%.
Compared with school districts statewide, Park Rapids Area ranks 226th out of 327 districts in total revenue per student, collecting $10,872 per student compared to the state average of $11,275.
On the expense side, Frtize projected:
$9.6 million for K-12 instruction, 44.9% of general fund expenses.
$4.1 million for special education instruction, 19.2%.
$2.3 million for sites and buildings, 10.6%.
$2 million for pupil support, 9.7%.
$1.2 million for instructional support, 5.6%.
$570,000 for district support, 2.7%.
$330,000 for vocational instruction, 1.5%.
$170,000 for fiscal and other fixed costs, 0.8%.
Sliced a different way, he broke this down as $17 million for salaries and benefits (80.2%), $2.2 million for contractual services (10.5%), $1.2 million for supplies (5.8%), $635,000 for capital expenditures (3%) and $100,000 for fiscal costs (0.5%).
Board member Stephanie Carlson made the motion to approve the levy and Clayton Hoyt made the motion to approve the budget. Both motions passed unanimously.
Business as usual
In consent items and general business, the school board:
Hired Amanda Kritzeck and Robert Borger as elementary paraprofessionals and Kristi Olson as an English Language Learners paraprofessional.
Accepted the resignation of Lexi Stevenson as elementary paraprofessional.
Reduced the position of a high school administrative secretary from 12 to 11 months per year.
Approved a 2021-23 network systems coordinator contract with Todd Kumpula.
Heard Superintendent Lance Bagstad report that eight people stopped by the school job fair on Dec. 13, and that two students and one staff member were currently out with COVID-19.
Heard principals Jeff Johnson, Shawn Andress and Mike LeMier voice concern about behavioral and academic setbacks associated with the Christmas break, starting with an early out this Thursday. LeMier also noted that the flu is starting to make inroads on the elementary student body.
Heard Community Education Director Jill Dickinson discuss upcoming trips to Duluth and Washington, D.C.
Heard Curriculum and Instruction Director Jill Stevenson report that the virtual academy currently has 30 students, including 12 in middle school and 18 in high school. She also noted that the state’s math standards will be up for review next year.
Acknowledged a report that the district’s K-12 enrollment decreased slightly from 1,609 on Nov. 11 to 1,603 on Dec. 16, while total district enrollment including preschool, Alternative Learning Center and virtual academy students held level at 1,757.
Established polling places and hours for any special school district elections in 2022, an annual resolution.
Approved payments presented for November, totaling $1,535,072.
Scheduled performance reviews of Bagstad and itself for a closed session after the school board’s Feb. 7, 2022 meeting.
The school board’s next meeting is scheduled for 6 p.m. Monday, Jan. 3, 2022 at the Frank White Education Center.