Argus News Editor

Caledonia school finances received a good grade from auditor Darwin Viker at the October 17 board meeting.

Viker, who works for Larson, Allen, Weishair & Co. LLP, said the districtís unreserved fund balance of $380,721 was five percent of one year expenditures. He would like to see it at eight percent, but said it was better than five years ago when the district was in statutory operating debt.

He praised the board for making budget cuts last year to deal with declining revenues. ìYou have to be proactive in matching those expenditure cuts,î Viker said.

The district is doing the right thing but needs to keep doing it, he said several times.

Viker also called the business office professional and well-organized.

Board member Chuck Schulte said he was nervous about the districtís severance benefits obligations, which are at $395,584.

Viker agreed. A new law called GASBY Regulation #45 will go into effect in 2010. It will require public entities to show post-retirement benefits on its financial report, as well as calculate the liability every two years. But the district may need to hire an actuary before then to deal with this. He encouraged the board to try working with employees to see that the district doesnít keep adding to the obligations, which he called ìunfunded liabilities.î The groups should try to find a win-win or break-even solution, Viker said.

Schulte reiterated his concern later in the meeting during reports from board members. ìItís something thatís going to have to be addressed,î he said.

Viker also noted that the districtís net assets are at a negative $2,046,245, which is more than the previous year total of negative $1,522,426. But he is not concerned about this, because the debt from building the new school will be paid off and the school will still have a sound building.

Discussion on coaching

In other action at the three-hour-long meeting, the board approved winter sports coaching contracts. Board member Mike Novak abstained from the vote. He would not provide an explanation to The Argus.

Here are the coaches:

ï Wrestling: Jay Tolleson, head coach, $3,154; Ken Stemper, junior high, $1,633; Al Schmitz, junior high, $1,783. The Houston School District pays for the assistant coach.

ï Boys basketball: Josh Diersen, head coach, $3,004; Nathan Wurm, assistant, $2,053; Charlie Reed, ninth grade (1/2 time), $1,483; Jeremy Lies, ninth grade (1/2 time), $1,483; Dan Reinhart, junior high, $1,783; Joel Hesse, junior high, $1,483.

ï Girls basketball: Scott Sorenson, head coach, $3,305; Carl Fruechte, assistant, $2,353; Sara Fruechte, ninth grade, $1,483; Kevin Klug and Mitch Mullins, junior high, $1,633 each.

ï Gymnastics: Kim Klopfer, head coach, $3,004; Paul Stevens, assistant, $2,353.

Board member Barb Hurley noted that only one boys basketball coach worked in the school system. ìIím concerned communicating with the school is going to be lacking, Iím concerned communicating with the parents is going to be lacking,î she said.

Hurley emphasized several times that she wasnít questioning the character of any coaches. ìItís the lack of them not being in the school system themselves,î she said.

Superintendent Mike Moriarty said that no one is applying for coaching positions. ìBut that doesnít mean they wonít be worked with very closely,î he said. ìThereís nobody there thatís new to the district.î

Board member Jean Meyer said she has had children in all sports and has not seen a break down in communication.

Mike Novak said the board may need to do assignments for coaching. The school canít have it pell-mell like it is now, he said. ìWe need the staff members in the building to be the coaches,î he said. This was given away in contracts and it needs to be reasserted, Novak said. If there is a coaching vacancy and no one applies, the district has the right to assign it, he said.

Moriarty added that is now necessary to have a cause and hearing before a coach can be fired. That had not been necessary prior to July 1 when a new law went into effect.

Other personnel items

The board approved the hiring of Stephanie Huff as part-time middle/high school special education assistant for three hours per day at $9.21 per hour. Patricia Goetzinger was hired as part-time elementary special educational assistant at $9.21 per hour. She will job-share this position with Tammy Stadtler, who will be paid $9.38 per hour.

Resignations were accepted from Bob Hosch as part-time middle/high school food service janitor effective October 31, and for Valerie Vaaler as part-time elementary janitor effective October 21.

Other business

ï Concession stand: The board approved having the operation of the new concession stand work the same as the other concession stands. The board had considered at an earlier meeting having the groups that run the new concession stand pay a portion of their proceeds for maintaining the new building, which is currently under construction. Board member Mary Frank said she and Hurley met with concession stand groups and looked at all the options, and the consensus was to leave things ìas-is.î Schulte said he hopes the building is used in a respectful manner.

ï Fifth grade classroom: Elementary principal Connie Hesse reported that 10 desks had been removed from each of two fifth grade classrooms, which lessens the congestion in the rooms. This was possible by using media center teacher Sherri White as a teacher. A parent had complained at the September board meeting about the crowded conditions in the two classrooms.

ï Retreat set: The board will hold a retreat on January 19 from 6:30-9:30 p.m.

ï Revised levy: The board approved a revised levy of $1,875,386, a five percent increase over last yearís levy. A levy that was approved in September was wrong due to an accounting error by the Minnesota Department of Education, Moriarty said. Itís a bigger tax increase than the 1-1/2 percent increase that was reported a month ago, Moriarty said, but it is still pretty small compared to other school districts in the area.

ï VEBA approved: The board approved the establishment of a Voluntary Employees Beneficiary Association (VEBA) through the Minnesota Service Cooperatives for its administrators. Under the VEBA, the district takes out a high deductible health insurance plan, then puts money into a health savings account that is tax deductible. The contribution is $900 for single coverage of a $1,800 deductible plan. The contribution is $1,800 for family coverage of a $3,600 deductible plan. It saves the district money, Moriarty said. For example, a VEBA family plan costs the district about $19,000, compared to $26,000 for a family plan with a $500 deductible.

ï New signs: The board approved spending $550 for two signs along Highway 44 that show the location of the middle/high school. The Minnesota Department of Transportation will provide and install the signs.

ï Insurance changes: The board voted, with Novak abstaining, to switch from MSBA to Continental Western for its property insurance. The low bid was $54,820, compared to $63,758 for MSBA, a savings of $8,938. The board renewed its workers compensation insurance with MSBA at $35,426, which was $10,974 less than Continental Westernís bid. Novak would not provide an explanation to The Argus for his abstention.

Highlights of ISD #299 audit

Here are the financial highlights that auditing firm Larson, Allen, Weishair & Co. LLP identified for ISD #299 for the year ending June 30, 2005.

ï The General Fund Balance as a whole improved slightly during a time when student enrollment declined by 44 students and we saw no additional revenue from the State. The District cut approximately $400,000 from the 2004-2005 budget to account for a decline in revenue of approximately $400,000.

ï The unreserved/undesignated fund balance in the general fund increased $10,468 bringing the fund balance to $361,294 which is 4.8% of expenditures. The Districtís policy is to maintain an 8% reserve in the unreserved/undesignated fund balance.

ï In the fall of 2002 the District successfully passed an operating levy referendum. This referendum has allowed the District to maintain a higher level of staffing than would be possible without the referendum. The referendum has also allowed the District to invest in technology and textbooks. In addition, the referendum has enabled the District to continue increasing its fund balance towards the goal of 8%.

ï The District is holding $65,191 in an agency fund. This money was raised by the Caledonia Rotary and will be used to construct a Concession Stand in the fall of 2005.