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School Board votes to reduce opt-out amount

Posted: Thursday, Sep 12th, 2013

HURON — The Huron School board sent taxpayers good news at their board meeting Monday evening as they voted to reduce the $600,000 opt-out to $375,000.

The topic was first discussed Monday as part of Kelly Christopherson’s business managers report.

The opt-out was originally made in January 2012, as the School Board asked for $750,000 for one year for the 2012 taxes payable in 2013, according to a memo sent Sept. 3 from Christopherson to Superintendent Terry Nebelsick. An election was not scheduled and the full $750,000 tax was levied.

On June 24, the board opted out for $600,000 for one year for the 2013 taxes payable in 2014. Again an election was not scheduled and the resolution was not referred to a vote.

It was noted in an Aug. 12 business managers report to the board that the general fund had ended up better than expected. That, combined with a more certain projection for this fall’s enrollment that is relatively the same as last year, means less money will be needed from the taxpayers.

In the memo Christopherson states, “I have analyzed all of the factors and have re-worked the General Fund projection for this year and the following two years. And keeping the finance Committee’s recommendations in mind that we should look two years into the future, opt-out for one year at a time, continue to use reserves, and keep our elected officials informed; I recommend reducing the opt-out request to $375,000 — a 50 percent reduction from last year.”

Christopherson hopes that further reductions in future opt-outs will also be possible.

“Currently it looks like an opt-out of this size for the future year, combined with our General Fund reserves, will allow us to operate until June 30,2016,” the memo went on to state.

When asked about the reduction in the opt-out and its effect on the General Fund reserves Christopherson stated that with the reduction of the opt-out the district will use $400,000 of its General Fund reserves by June of 2014, another $600,000 by the end of 2015 and finally $800,000 in June of 2016.

This would reduce the General Fund to $1.2 million which is the number at which Christopherson says the district will be able to still “cash flow” meaning pay their bills on time regardless of the timing of revenue collection.

Board member David Wheeler then asked “Do we really have any reserves at that point?”

“When I say we are at $1.2 million and that is where we need to cash flow, there will be two times a year when cash will get short,” said Christopherson. “When we are waiting for the first and second half of the real estate taxes from the county auditors, our bank account will be at its lowest point.”

He went on to say that Wheeler did make a valid point saying that $1.2 million there really isn’t any extra money, it would all be needed to keep the district able to pay its bills.

Wheeler then said the board might want to discuss at some point what kind of actual reserves the district should have on hand.

Board member John Halbkat then reminded the board of the finance committee’s involvement in setting up this financial plan with a goal of just $1.2 million of General Fund reserves to cash flow.

“The one thing I want to remind us as board members is we asked for community input and participation in a finance committee to give us some advice, and one thing that they have done is they have cut our look into the future to two years from what we previously use to look at five,” said Halbkat. “And that $1.2 million is a number that the finance committee has looked at, so that wouldn’t be a bad thing to take back to them.”

He said that it is a good thing that the district is taking less.

“The finance committee supported $600,000, the community and school district supported $600,000, so I think it’s good news that we are only going to levy $375,000,” said Halbkat. “I think it is probably uncommon for the school district to say, ‘We are going to tax you for this amount,’ then when it really comes to levy them, ‘We are going to take less than that.’”

But Halbkat said that is the successful collaboration between the finance committee and the board. “And that is the trust that we have built with the community,” said Halbkat. “The finance committee has helped us bridge that trust.”

The board later unanimously approved the reduction for the opt-out which paved the way for Christopherson to certify the tax levies for the counties of Beadle, Sanborn and Jerauld counties.

That was also unanimously approved.

Those two items in addition to the unsealing of the Ross Opsal agreement were the three items of old business on the agenda, and the board then turned its attention to seven items of new business.

The first two items concerned change orders for Madison and Buchanan elementary schools.

The Madison change order was for $6,090 and concerned some delays and additional work that was needed due to the soggy spring that hampered construction.

The overall amount for the project was $1.475 M which was for eight classrooms and a set of bathrooms.

Nine different items did change during constructions, some in the district’s favor, others that added costs, but considering the $6,000 is less than 5 percent of the total budget, Christopherson described the project as relatively uneventful.

The biggest part of the order as far as costs was additional gravel that was needed for driveways to the food service portion of the building.

The order passed unanimously.

The Buchanan site project change had a pair of things happen. One is that they changed the style of benches near the playground which was at no difference in cost, while the second had to do with storm drains of the parking lot as an additional one was added making two in the lot. The cost was just more than $4,000.

Christopherson said that the project is almost completed. The only thing holding up the completion is for the architect to inspect the rubber surface that goes under the playground equipment.

The change order passed unanimously.

The board will hopefully accept bids on the $7 million Buchanan building project.

The bids are due back by Sept. 19 and could have action taken at the Sept. 23 meeting.

The board then passed three waivers concerning mathematics classes that can be taught at both the middle and high school level.

“This is not a change in the way that we currently operate,” said Nebelsick. “These things were done five years ago, and are done again in order to give us the maximum latitude for the principals to work with individual students and yet be in compliance with the state of South Dakota as they do their educational needs.”

The passage of the waivers gives the district the ability to take algebra or geometry as eighth graders and the equivalency waiver allows students that transfer into the district to test out of classes when entering Huron’s school district.

The board then passed the purchases of a used motorcoach bus for $104,923 and a new route bus that will become a true backup in the district for $78,709.

The board also approved the signing of a loan agreement with Dakota Energy Cooperative for a $300,000 interest free loan which is facilitated by the USDA Rural Development program.

In its final action of the night the board tabled an agreement with the city of Huron concerning the shared parking lot at the Tiger Activity Center and Splash Central Waterpark.

The sticking point for the district was that there was no finite term of length for the agreement.

Christopherson said he would discuss the legal ramifications with the district’s legal counsel and work out an arrangement with the city.

For the complete article see the 09-11-2013 issue.

Click here to purchase an electronic version of the 09-11-2013 paper.

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