School Board reviews five-year plan

Discussed: Money, moving, middle school 

Out of $5.5 million worth of recent staff proposals, middle school redesign ranks highest on the Lakeville Area School Board’s priority list.

Plans for funding the redesign and the multiple additional district proposals and plans were part of the board’s focus at a March 7 work session that stretched over four hours and covered numerous issues, led by Michael Baumann, executive director of business services.

As School Board members praised the 75-page presentation for its detail but complained they did not receive it in time to review, Baumann laid out the district’s five-year finance planning in quarters, showing spending will exceed revenue by $3.3 million by this summer.

Without change, the deficit is projected to continually increase, and by fiscal year 2019 (summer 2018), the district is projecting expenditures to exceed revenues by $4.8 million and its unassigned fund balance to be $3.1 million in deficit.

Using several assumptions that anticipate enrollment, salary and benefit increases, state funding and other items, by fiscal year 2021, Baumann projected the district’s beginning fund balance would be negative $183,112 and its unassigned fund balance negative $11 million.

By fiscal year 2022, Baumann projected the district’s beginning fund balance in a $9.3 million deficit and its unassigned fund balance in deficit more than $22.3 million.

“What this says is we have some challenges that we have to deal with, and they’re coming in fiscal year ’19, so interdiction has to occur,” Baumann said. “The administration has to figure out how to deal with this potential challenge.”

He emphasized there should not be panic because there are many things that can change, noting the district is investigating the potential of about $1 million in savings by employing energy conservation measures, such as using LED lighting. He noted they are also reviewing the potential savings of solar energy.

Several levy renewals are coming up, including one for $8.3 million this fall.

Baumann said a levy referendum will be held in fall 2021 and advocated to begin campaigning for it in 2020.

Baumann reported the district has $2.4 million in lease levy and currently utilizes $577,936 of it, and he said the district has issued $135.2 million in debt and has a debt limit of $993 million.

He proposed internally developing two-year budgets, but submitting to the state a one-year plan as required, while also maintaining the five-year outlook to better prepare and plan to address challenges.

School Board members agreed with long-term planning suggestions and prioritized staff requests.

Easily topping their priority list was middle school redesign. Other requests they ranked high were adding music, band and choir and providing more family and consumer science classes.

Board members also reviewed enrollment projections that showed elementary school crowding and discussed the estimated $32 million cost of building a new elementary school, not including the cost of land.

They reviewed the wish-list of the Long-Term Facilities Task Force that included items like adding artificial turf at Lakeville South High School and replacing the artificial turf at Lakeville North High School ($2 million), building a third swimming pool and a diving well ($6 million-$10 million) and increasing school security ($8 million).

Board members decried the increasing expense of playground replacements, estimated at $250,000 per site, and recalled when playgrounds cost about $60,000 and were helped by PTO fundraising.

They addressed potential options to mitigate capacity problems, possibly by adding portables or building expansions, and considered options for relocating Community Education from its downtown Lakeville location by August when the lease expires. Board Chair Michelle Volk said she would like adult basic education to be located in the Minnesota School of Business building and several board members agreed.

The board also generally agreed to Baumann’s suggestion a permanent advisory group be established that continually reviews long-term planning.

Discussed multiple times was the possibility of issuing a lease levy, which does not require voter approval, and several board members expressed interest in the potential of leasing more space at the practically abandoned Minnesota School of Business building.

The school is struggling financially and no longer offers classes in the building.

In a joint program with the Prior Lake-Savage School District, District 194 already leases some space in the building for its Minnesota Center for Advanced Professional Studies program, which gives juniors and seniors real-world training in either business or health care.

Board members also expressed a desire to have their own meeting space again, and Baumann proposed establishing it at the Minnesota School of Business where the meeting was held.

The School Board has for three years held its regular meetings at Lakeville City Hall, in part to save the expense of purchasing upgraded technology to broadcast its meetings.

The board has held its work sessions at the Crystal Lake Education Center, but Baumann suggested revamping some of that space for classrooms and restrooms to accommodate other programs.

Four options for relocating Community Education and other district areas were discussed but board members wanted more time to review the materials and contemplate options.

Baumann said he will need time to negotiate expanding space it leases with the Minnesota School of Business, and Volk said the board would provide direction regarding a preferred space and moving option at its 6 p.m. March 21 work session. At the board’s request, Baumann will see if they can again meet at the Minnesota School of Business.