Austin School Board certifies 2019 levy for 4.1 percent

Published 8:36 am Wednesday, December 12, 2018

After its Truth in Taxation hearing on Monday night, the Austin School Board certified the final 2019 levy at 4.1 percent.

This would be an increase from 2018 of $276,007. The levy limits are different for school districts as opposed to city or county because state law sets the limits, which are voter approved. School districts are also able to levy taxes in more than 40 different categories.

The Minnesota Department of Education also calculates detailed levy limits for each district.

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The levy will be used for the reduction of debt excess or debt services to pay off the bonds sold for the music annex renovation project. Districts are required to levy at 105 percent of debt service payment amounts to cover delinquencies in tax collections, and since delinquencies are generally less than 5 percent, most districts gradually build up fund balances in debt service funds. Formulas in state law determine adjustments to tax levy for debt access balances.

For the 2019 state-required levy reduction, it would be considered less than the 2018 school year, according to Superintendent David Krenz.

Since 2002-03, state General Education Revenue formula has not kept up with inflation, and for fiscal year 2018-19, the state Legislature approved an increase of 2 percent or $124 per year. Per-pupil allowance for fiscal year 2018-19, would need to increase by another $618 (9.8 percent) to have kept up with inflation since 2002-03.

With the district’s 4.1 percent levy increase, it was a $95,524 change from the preliminary approval of 3.29 percent, or $7,004,313, according to a previous story.

However, Krenz explained to attendees that just because there was a change in the levy, doesn’t determine a change in budget, and that an increase in school taxes doesn’t always correlate to an equal increase in budget.

“It’s a shift,” Krenz said. “We are not receiving new money.”

What else happened during the board meeting:

Audit for 2017-2018 school year

The APS district received a “clean audit” from CliftonLarsonAllen (CLA) LLP for the 2017-2018 school year, with no compliance issues, and the financial statements provided by the district were “fairly stated,” according to Craig Popenhagen of CLA.

Financial analysis of the district as a whole showed that the total cost of all programming and services was $93,240,422, which the district’s expenses are predominantly related to educating and caring for students and mostly administrative activities for the district accounted for 4.3 percent of total costs, according to CLA.

“APS’ total revenues were $75,667,635 for the 2017-2018 school year. Property taxes and state formula aid accounted for 55.47 percent of total revenue for the year. Another 1.6 percent came from other general revenues combined with investment earnings and the remainder from program revenues,” the financial statement reads.

The general fund revenue increased by $3,572,956 or 5.7 percent from the previous year

Selling bonds for funding music annex renovation project

Austin School Board approved to sell its General Obligation Capital Facilities Bonds for $4.91 million, which would be used toward the music annex renovation project.

The purpose of selling facilities bonds is to finance capital projects, and related financing expenses to include improvements, maintenance, and repairs to the Austin High School Music Suite. There were five bids made, with the lowest bid won by Northland Securities, Inc. in Minneapolis.