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Budget Info


For FY 2017, Superintendent Gronseth predicts that we will have a $3.3 million deficit.  Ever since I've been on the Board, we have always had deficits, except for 2015.  All the deficits are  a bit surprising, and seems to be the normal way of doing business in introducing every year's budget.  One would normally question such "business are usual" in planning for budgets.  Though declining enrollment, the debt obligation being paid out of the General Fund (the classrooms), and depletion of the District's reserve funds certainly can have its toll.

Here are the last seven year's projected deficits:  These total $24 million

                                                                                                                         Here it is in graph format:

Normally, one would expect that the expeditures would have dropped $24 million in those seven years, but the General Fund has only dropped  about $4 million.  See the following graph.  It is obvious that the "deficits" have been more on paper than in reality.  School have to balance their budgets, so much of the decrease has come from depletion of the reserve funds.










Depletion of the Reserve Fund:  In 2008, ISD 709 had $21 million in its unrestricted General Fund Balance, now it has $2.6 million.


Budget saving suggestions in addressing the projected $3.4 million deficit in the FY17 General Fund:


1.      Reducing Administrative Costs. Potential Savings:  $1,547,477.   According to the Truth in Taxation Hearings charts, Administrative budgets have increased significantly in the last two years: 

We don’t know, yet, what these costs will be in FY17.  And maybe some of these admin costs have justification. We are not saying we should not have administration or support services, but we are saying that these costs should be contained, and that this is an area we would like to see as part of the deficit reduction.  It is not unrealistic to insist that they be no higher than they were in FY15. 

For discussion purposes, here are what some of these costs reduction could be: 

  • Reducing the number of Assistance Principals;
  • Combine jobs of community outreach and climate control;
  • Reduce the number of Directors;
  • Combine Athletic Directors;
  • Hold principal meetings in the school and limit their number;
  • Eliminate DFT meetings during the school day;
  • Fold the data director duties into the Principals’ or Superintendent  job descriptions;
  • Reduce Immersion director to half time;
  • Reduce the CTE director to half time;
  • Reduce the extra layers, like TOSAS, Specialist, etc.;


2.  End the payments for COPs 2009B, 2010D, and 2012B coming from the General Fund.  Let’s refinance our debt payments. Potential General Fund Savings:  $3,337,045.

Background:  Of the eight debt obligations used to fund the Plan, these three certificates of participation (COP) are being paid from the General

Fund with the justification that the Plan generated “General Fund Savings (GFS)”.  The question is whether these “Savings” should be used for debt payments, or whether this $3.3 million should be “used to fund desegregation and educational programs [language from our Plan].” 

This proposal is to use these moneys only for education programming in the General Fund.  This change alone would eliminate the predicted deficit.

This is an ongoing issue as long as the debt payments are due (through 2033), so ending this money shift will amount to an enormous money  influx into the General Fund for many years.

It is important to note that these three COPs were written with the understanding that they may eventually be too big a burden on the General Fund, so their payments can be easily reprogrammed with minimum costs--per discussion with Bill Hanson and Jody LeBlanc. 

A legitimate question will be about where such refinancing payments will come from.  A precedent was set when last year, when the District refinanced 2008B into 2015B.  This resulted in a lower tax burden.  There are a total of eight debt instruments that are currently being use to pay-off the existing Plan debts.  The total principal remaining is not known, but is estimated to be about $270 million.  Refinancing all of these debt obligations will likely result in a significant decrease in the amount of annual debt payments—which will allow us to keep this money in the General Fund,  and also limiting (or stopping) any tax increase.


3.  End all the transfers from the General Fund (01) to the Capital Fund (05).  Potential General Fund Savings:  Predicted as much as $6,733,326 for FY17, but may be less depending on how its entered into the books by the Administration. We are awareness of the confusing nature of how these are entered into the books, but this accounting confusion should be eliminated; and this may significantly decrease this General Fund expenditure—thus decreasing the deficit.  As a minimum this will make this part of the budget more understandable.

Background:  In previous years, the following budgets were transferred out of General Fund to the Capital Fund and Debt Service Fund:  (numbers are from the Adopted Budgets): 

In the past these amounts have been based on the published “General Fund Saving (GFS)” from the 2009 Plan.  The question is whether these GFS should be moved to the Capital or Debt Service Fund, or whether these moneys should “be used to fund desegregation and educational programs.”  My proposal is to keep any such GFS in the General Fund to be used only for desegregation and education programming.




Conclusions: The total of all these potential savings are from $1.5 million to over $5 million.  We know that some of these may have significant reasons why we can’t do them.  But we also know that these are some suggestions that can result in significant savings that could not only eliminate the deficit, but could even bring forth a budget excess that could even allow us to reconsider by adding a 7-period day and increasing Zero hour classes.





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