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USC talks operating referendum

By Staff | Jun 24, 2018

“USC is doing a really nice job of managing their finances, please continue to do what you are doing.”

Those were the words of Northland Securities senior vice president Greg Beaufield when he and his colleague Michael Hart visited United South Central at their regular School Board meeting to discuss district finances and the potential renewal of a current operating levy referendum, which will expire in 2020.

United South Central’s School Board found out first-hand about the numbers going into and out of their school with the new legislative decisions on their current operating levy referendum.

An operating referendum is a November election ballot question that allows school districts to raise general education revenues.

For USC, that revenue is a mix of state aid and a local property tax levy dollars based on a referendum market value (RMV). The RMV is based on each parcel’s taxable market value (TMV) which could vary from the assessed value of property if certain limitations apply.

Currently, the key legislative changes to the local operating levy referendums included the changing of pupil units from “RMCPU”s to “APU”s which caused previous referendum amounts to be recalculated.

According to Hart, vice president of public finance at Northland Securities, the sources of revenue the USC School District receives is 60 percent of funding from state sources, 29 percent from property taxes, five percent from federal sources, and another six percent from other sources such as donations, fundraisers and the like.

The last operating referendum for USC was voted on in the 2010 election year, with one question on the ballot regarding revocation of the referendum of $1,000 and replacing it with a $1,200 referendum per pupil unit, or APU.

According to Northland Securities’ data on local voting, that 2010 referendum question yielded a 55 percent voting result of “yes, replace the referendum with $1,200.”

This leaves the board with a few options to consider before the next election, according to Hart: whether to renew the dollar amount of the referendum at $1,200, to add any annual inflationary adjustments, and to set a term for the referendum with a maximum of 10 years. Those actions, should the board choose to do so, must take place by Aug. 24, of this year.

Had the USC?School been struggling with their levy, this would be an issue, however, Beaufield, Northland Securities’ senior vice president, says USC is doing very well. And it is in part due to that referendum change.

“This is kind of your report card,” said Beaufield. “And you are spending what you are bringing in, in order to continue operation of the school, which is what an operating referendum is supposed to do. Before the recession, you were desperate for general funds. Now you are doing very well. Your voters have spoken and your levies show it.”

Northland Securities said the next step for the School Board would be to give direction to the Northland group to work with special councils, including Superintendent Keith Fleming, to come up with a referendum policy by August.

“So, we have to state this would raise taxes?” questioned USC School Board chairperson, Dale Stevermer.

“It is a continuation of the $1,200 APU levy referendum from 2010,” said Hart. “The language is very prescriptive. It is a big voting year for Minnesota this coming November. Your voters don’t want to see a surprise on their ballot this fall, so we have to communicate this clearly.”

With their current referendum running out in 2020, the hope of placing a continued $1,200 APU referendum on the ballot would, in theory, allow the school to continue balancing its levy as well as they have.

With little conversation regarding Northland Security’s suggestion, the School Board approved renewal of the current operating levy referendum.

During their meeting, the USC School Board also:

Approved all contracts and leave requests, including the resignation of their band instructor and kindergarten music teacher, Evan Bierer. Two interviews have already taken place for the open position.

Accepted the suggestion of having an on-call nurse for property and liability insurance purposes. Jeff Schulenburg, the school’s liability insurance agent, stated there were “a lot of trip and falls” regarding the school’s staff, so placing an on-call nurse to deal with those minor incidents would reduce the risk of insurance premium hikes.

With many variables still very present in their budget, the School Board still moved forward in approving the final 2017-18 budget, as well as approving the preliminary 2018-19 budget. Finance manager Stacy Whiteside stated there were many variables that would affect the budget’s bottom line, and there could still be many financial swings to the budget due to the State’s lack of movement.

Reapproved the resolution approving the concept of consolidating the education programs of the Southern Plains Education District at one site in Fairmont, with the absence of Truman’s school participation. The board also approved the joint powers agreement with Southern Plains Educational Cooperative.

Considered and approved the USC?management plan for lead in water, if the school should ever face such an issue. This was merely a proactive consideration, as the school already regularly tests for lead in their water supply.

Approved the director stipend of $4,779 for ECFE, School Readiness, and Pathways II?programs.

Backed the consideration of the Faribault County Adult Basic Education Consortium agreement.