CC AGENDA 09302003 - Laserfiche WebLink

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D� A • Summary Resort of School District Finance Advisory Committee A. Committee: The ad hoc Finance Committee was composed of members of the School Board, School Administrators,and designated representatives of various Blueprint task forces. The committee was chaired by the undersigned. The ad hoc Committee met during May—June, 2003. This report summarizes the conclusions and recommendations of the ad hoc Finance Advisory Committee. B. Background: Summary points relative to why ISD#282 faces financial challenges: 1. From 1991-1992 school year to the 2002-2003 school year,public school districts have received, on average, a 2.5%annual increase in basic foundation aid. 2. There will be no increase in basic foundation aid for the 2003-2004 and 2004- 2005 school years. 3. Historically, ISD#282's average annual increase in expenditures is 6-7%. 4. The gap between revenue and expenditures is the primary cause of ISD#282's financial difficulty. 5. There has been an increasing number of un-funded or under funded state and federal mandates particularly over the past ten years. In fact the 2003 legislative session ended with additional un-funded mandates thrown at ISD#282. 6. ISD#282 is hugely under-funded relative to the maintenance and retrofit demands • of its facilities and there is no legal way to build up a reserve over time for facilities. Observations concerning Financial Management of ISD#282: 1. The school board has been prudent managers of the budget. 2. There have been ongoing annual budget reductions. 3. Revenue has been increased through accepting open-enrollment students and the revenue received has exceeded any additional expenses the district may have incurred because of additional students. However,the student capacity-limit has nearly been reached so this will not be a part of the solution for future budgets. 4. Some additional revenue has been received through a court ordered desegregation program. However,this is a year-by-year situation and is not revenue that should automatically be counted on. C. Process: The ad hoc committee reviewed materials and data concerning school district demographic trends, developments in educational processes, history and developments in ISD 282 finances,historical budgets and future budget projections,property tax levy history and projections, school district funding limits, and potential funding options including the various operating,capital project,and bond levy possibilities. The resources reviewed included,inter alia, the results of various studies by school administrators and independent consultants, and the participation of a representative of Springsted, a group specializing in techniques of funding local government.