The Lanesboro School Board receivaed favorable news from auditor Jason Boyton, Smith, Shafer & Associates, at the Thursday, December 19 meeting. The district has continued several positive financial strides forward, despite its small size and an in-progress building project. Only one area of concern was noted in the audit.
The district has also seen a positive increase in the number of Average Daily Membership. Revenue for the district continues to be funded primarily by state aid, currently at 70% of total revenues. Just 8% of revenues are funded by local levy.
The district has no current operating levy, which is unusual. According to Superintendent Matt Schultz, of all the districts in the state [reported as 336 in 2016], just four districts don’t take the minimum operating levy offered by the State of Minnesota. “We have the lowest tax impact of any district in the state, from an operating perspective,” noted Schultz. The current amount offered by the state is $724 per student. In addition, districts can seek out secondary operating levies. “Almost every district is taking advantage of that and we are not,” added Schultz. “We haven’t felt like we needed to take it.”
The district also is seeing its property tax levy lower than average, but it hopes to maintain that trend. For 2020, the district entertained a final property tax levy of $874,905, an increase of just .71% over 2019.
Expenditures continue to consist largely of regular instruction, but Community Education, including daycare, preschool, summer recreation, are the second highest expenditure. Expenses through the General Fund have remained flat the last three years and an annual transfer has occured to the Community Service Fund. “It’s a challenge to bring fund level deficit down. It’s trending upward,” noted Boynton.
The General Fund balance, while being drawn down is still healthy. It was acknowledged as “overly healthy” in 2012, but has reduced to $1.37 million in 2019, the equivalent of 33% of the year’s total unassigned expenses and 40% overall. “The concern isn’t the level, it’s that it’s trending up. We need to stabilize and make progress on debts we’re generating,” he added.
Community Service is growing the number of kids in the program, which in turn costs the district more and rates have been adjusted to help, while maintaining student numbers. “We want to narrow down to the point that it’s feasible and still cover our objective,” said Boynton. “The most concerning part is the Community Service Fund deficit. We’ve been able to maintain numbers and provide good programming.”
In other news, the board unanimously approved a final property tax levy $874,905, representing a .71% increase. “I guarantee you we’re going to be more efficient in 2020-2021,” said Superintendent Matt Schultz. “With added changes in the building, we’ll see additional efficiencies. Growing to offset the deficit in Community Service, we know we’ll see a 2% increase per pupil add from the state [about $70,000]. Those numbers help, but our goal is to maximize revenues, decrease expenditures, and have them match out.”
Schultz was equally excited about a new Power Purchase Agreement between the district and Novel Energy Solutions for a 160 kilowatt (kW) solar panel system placed on gymnasium and commons roof. The flat-mount system with generates 199,626 kW hours and should provide enough energy for the district to recoup and then generate savings after the fifth year. The units will be owned and operated for the first 10 years by Novel Energy Solutions with the district fronting the $150,000 cost, to be paid out of the Building Fund. After the fifth year, the district is expecting $30,000 a year in savings to be generated. The firm will also cover insurance, operation, and maintenance for the 10 years of the agreement.
“Our payback rate for this is short,” enthused Schultz. “After year 10, we have the option to take over for $1.” At that point, the district would assume insurance and maintenance costs of $3,100 per year. After the tenth year, savings would increase to $35,000 annually.
“For the foreseeable future, there’s significant savings. Energy costs have been roughly a 3.5% increase per year,” continued Schultz. “It’s a long term investment that I think will have significant impact on our expenses.
Once the unit has reached its 30-year lifespan, cost of recycling the materials is $5,000. Novel Energy Solutions will decommission the unit and bring the roof back into good condition, while the district’s only cost will be the recycling fee.
“We’re generating clean electricity. For our community, that’s the best,” concluded Schultz.
The next regularly scheduled board meeting is Thursday, January 23 at 6:45 p.m., in the elementary library/media center. The public is encouraged to attend.
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