Posted: 12/24/07
Independent Auditors Report finds
Caledonia Schools in not too bad of shape
By Daniel McGonigle
Argus Managing Editor
"The single best measurement of the district's overall financial health in the general fund is the unreserved/undesignated fund balance," this according to a report presented to the Caledonia School Board on Monday. The audit report was put together by Darwin Viker of Larson Allen, LLP in Austin.
Financial Highlights
Key financial highlights for the 2006-2007 fiscal year include the following:
ïThe general fund balance as a whole decreased due to decisions to add an additional kindergarten teacher during a time when student enrollment declined by 41 students in the middle school/high school. State per-pupil aid did increase four percent during the fiscal year. The district cut approximately $135,000 from the 2005-2006 budget to account for the projected decline in enrollment. The loss of more students than anticipated and the additional section of kindergarten contributed to a reduction in the general fund balance of $124,033. This represents a drop in general fund reserves from 12 percent to 10 percent.
ïThe unreserved/undesignated fund balance in the general fund decreased $134,904 bringing the fund balance to $549,177 which is 7.2 percent of expenditures. The district's policy is to maintain an eight percent reserve in the general fund.
ïIn 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 November 2007, the operating levy was successfully renewed for an additional five years. The operating levy will help the district meet the educational needs of students and maintain a favorable general fund balance.
ïThe district refunded building bonds issued in 2000 in a cross over refunding to obtain a more favorable interest rate. The refunding will produce gross D/S savings of $708,705 over the remaining 13 year life of the bonds.
Factors bearing
on the District's future
During its 2005 summer session, the Minnesota State Legislature increased the per pupil aid levels. Now in its second year of the two year funding period, the per-pupil aid increased four percent. "District students have benefited from the four percent increase in per-pupil aid this year," said Viker. "The increase in funding allows the district to maintain curriculum offerings, and stabilize classroom numbers at reasonable levels."
However, declining enrollments negated most of the increase in net funds to the district.
Therefore, the district may have to continue to reduce staffing to adjust for the continuing decline in student enrollment.
"The 2007 Legislature decided to put more money into funding special education, which resulted in only a two percent increase in the per-pupil formula for 2008 and one percent in 2009," said Viker. "These lower increases will result in the need to continue reducing staff and other costs over the next few years if the district hopes to maintain a positive fund balance."
The renewed referendum will provide approximately $700,000 per year for general education operations over its five year duration.
"The proceeds from the referendum continue to provide the necessary funds to maintain desired education programs and reasonable class sizes," said Viker. "The tax impact of the renewed operating referendum will be less due to the increased number of new housing starts in the district over the past five years."
Final levy adopted
By state statute the district must adopt and certify its final levy certification by Dec. 28. The district has done so and has also submitted the necessary paperwork.
It is in the amount of $2,354,099.19.
Caledonia Argus
314 West Lincoln St.
P.O. Box 227
Caledonia, MN 55921-0227
507/724-3475
E-Mail: editor.argus@ecm-inc.com