District 194 will only ask for levy renewal this fall

Possible 2018 levy election discussed

Lakeville Area School District 194 voters will be asked to renew an $8.2 million operating levy this November, not add to it, despite a recent survey showing voters would likely approve a property tax increase for the schools.

Photo by Laura Adelmann
District 194 School Board members look to Superintendent Michael Baumann at an Aug. 1 meeting as he offers his opinion regarding the district’s gloomy financial outlook.

The district is instead planning to make changes in spending patterns before possibly asking the voters for more money in 2018 to maintain operations, not add or revamp programs as the district has done with levy increase requests in recent years.

Waiting before asking voters to approve a tax increase will allow teachers’ contracts to settle and give new Superintendent Michael Baumann and new key administration members time to financially strategize and implement changes before asking voters to support another increase.

Baumann has presented a five-year projection showing district spending $3.8 million over revenue this year and spending about $5 million over income by next summer.

By 2022, district expenditures are expected to exceed revenues by $12.2 million, and the fund balance as a percentage of expenditures would be -16.8 percent, according to the district.

Baumann said at an Aug. 1 School Board meeting the district must change how it spends money, and recommended only seeking the renewal this year, calling that funding important and citing concerns adding a question would risk its non-renewal.

He was critical of state funding that does not keep up with inflation, but said it is a reality for every school district and they have to implement cost-saving measures, including curtailing spending on items including staff travel.

“We have to change our habits,” Baumann said, calling necessity not only the mother of invention, but the mother of change.

“And I’m not talking about innovation change in the sense of trying to figure out something new,” Baumann said. “I’m talking about a change in just behavioral pattern, whether it’s spending or anything else that we use. So, that’s a big concern of mine trying to transition into this position and commit ourselves to different habits around spending.”

Board Member Bob Erickson said he supports using the next six to nine months to define the situation, and the amount they would seek instead of just asking voters to support a levy increase because survey results showed voter support for a maximum annual increase of $85 on the average home valued at $275,000.

“I think the community deserves more pragmatic explanation of the need, defining it and making it very clear,” Erickson said. “And I think we’d have much more support for maybe even more than $85 if we took that approach.”

Board Chair Michelle Volk agreed, and said asking for an increase on an off-election year is perceived as being “sneaky” by the public.

“I think it’s tough to have our new superintendent going out for something that’s not well-defined at this point for a second question,” Volk said.

Board Member Kathy Lewis advocated for two questions because she said she is worried about having to make budget cuts.

“I learned a very, very long time ago it’s very difficult to make cuts, and you should not make cuts until you’ve asked the community and they’ve said no,” Lewis said. “Because if you do, you are setting yourself up for a lot of jeopardy to the district.”

She said people in the community have expressed needs for items like middle school redesign, and she would rather have people in the district say they are not voting for the increase rather than the people asking why the board didn’t ask the question.

Board Member Terry Lind said the “handwriting is on the wall” that they will have to ask for additional funding, but they have time to plan and cuts are not necessary now.

Board Member Judy Keliher also favored a second question because the district is going out for a renewal question anyway.

“If you know there will be a need for another question down the road, we maybe do it now and save some costs of having to do another election for a question if it does pass,” Keliher said.

Board Member Jim Skelly also supported asking for the funding, stating that the district will be going through a reduction process and asking for a levy renewal at the same time without asking for additional revenue.

Baumann said the district is in a tough situation because the renewal does not keep pace with inflation.

According to Baumann, it would take another $3 million or so in 2019 to keep the fund balance within 5 percent of expenditures per district policy, which would mean a property tax increase of $147 annually to the average-valued $275,000 home just for the school portion of a tax bill.

“There’s no way you’re going to sell that,” Erickson said. “That’s almost double the amount that’s been identified in our survey.”

Keliher said they can craft a message to meet what people would vote for.

“In the recent past, we’ve had votes for dollar amounts that were recommended by the survey company but fell short of what we really needed as a district,” Keliher said.

Lind said Baumann’s opinion is one of the most important at the table because he would be charged with carrying it out.

“He’s saying give me the chance to see where I can get some operating efficiencies, Let’s define this more so we can honestly say to the public this is what we’ve done and this is what we need,” Lind said.

Baumann agreed.

“I would like an opportunity to change how our business is being conducted in order to set a condition that allows us to be successful in the future,” Baumann said. “It’s going to be a tough pill to swallow, initially, yes.”

He said he needs the opportunity to present the information to anybody in the community who will listen.

“If I face the hard questions about how and why, and I can persuade them that there’s a reason behind it and what the future holds, then we can set a condition and a business practices and process that will not put us back in this situation in the future,” Baumann said.

Contact Laura Adelmann at [email protected]