NEW ULM - In a report to the District 88 School Board Wednesday explaining key issues of the new local levy funding approved by voters last fall, Superintendent Harold Remme sounded mixed notes of optimism, frustration and caution.
"The good news is that we won't have to make cuts in 2013-14," said Remme. "The not-so-good news is that the money won't reach far enough to do everything we want to do.
"The part that I'd like caution you about is that the decisions we make in April (when approving next year's school budget) need to be sustainable, they need to last more than a year."
The total locally-approved levy funding currently in place in District 88 is approximately $1,356 per student per year, said Remme.
(Technically, the levy is not per student but per "resident marginal cost pupil unit." This means that for funding purposes, a kindergartner is counted as a 0.612 of a pupil unit; a student in grades one-three is 1 unit; a student in grades four-six is 1.03 units; and a student in grades 7-12 is 1.3 units.)
Of the total local levy, about $781 per student per year was previously approved, and $575 per student per year was approved last fall. Based on about 2,321 "pupil units," last fall's new levy raises about $1.33 million per year for 10 years.
Key planned uses of the new funds include: erasing the deficit spending pattern of the past few years and preparing a balanced budget; reducing elementary and secondary class sizes; increasing secondary class offerings; and implementing enhanced use of technology in the classroom, continued Remme.
More desired uses include: dedicating funds to staff development; strengthening the activity supplies budget; expanding technology use and applications; maintaining the operating fund unreserved balance at 8-10 percent of the fund for cash flow improvement; and reconsidering the higher fees instituted this year for schools cooperating with New Ulm Public in athletics.
(The unreserved fund balance fell to 7.8 percent of the operating fund according to the last audit of the district: "a little bit below the recommended, but in a comfortable range, at least," Remme reminded the board.)
Several known factors will come into play when budgeting for next year, said Remme. This year's budget has been revised, so the amount of the deficit spending is clear. The board has signed agreements with all employee groups. Also, administrators also projecting a fairly significant increase in kindergarten enrollment.
If the board looks at what Remme, for projection purposes, described as a simplified model of allocating the new referendum dollars, then recovering the deficit (more precisely, the intentional spending down of the fund balance to partially avoid program cuts) would take up $740,000 of the available $1.33 million. Of the remainder, the increased cost of employee contracts would take up another $331,266. That would leave about $263,268, which, if spent on class size reduction alone, would "buy" the equivalent of 5.26 teachers.
This model does not take into account any potential increase in school funding that might be approved by the state Legislature, added Remme. That factor will not be known until the end of Legislature's session on May 18. In contrast, the local school budget needs to be approved in April.
If state funding increases by $50 per student (or "pupil unit"), however, District 88 would get an additional $113,950 from the state. A $75 increase would then bring in $170,925 more, and a $100 increase $227,900 more.
Based on the birth rate alone, it is estimated that kindergarten enrollment could increase by 13 to 18 students above the current enrollment of 149, further specified Remme. At current funding rates, 13 more kindergartners would bring in an extra $41,562 in state funding, and 18 students would bring in an additional $57,547. These funds would basically "buy" one kindergarten teacher. Legislators are also mulling a proposal to change the "weighting" of a kindergartner from 0.612 to 0.7, which would bring in some more money.
The school district would like to see class sizes of: 17 to 20 students in kindergarten (down from an average of 24.8 now); 20-23 in grades one-three (now sections average 23.6 in grade one; 21.8 in grade two; and 29.4 in grade three); 24-26 in grades four-six (now they are 22.3 in grade four; 28.8 in grade five; and 30.2 in grade six).
To reach these section size goals, the district would have to add six teachers at the elementary level alone.
The district would also like to see 26-32 students in core secondary classes, and 15-26 in secondary elective classes. (Elective class sizes are sometimes limited by the number of work stations and regulations.) The district would like to minimize secondary classes with 30-plus students, of which now there are more than 60 sections.
Miscellaneous other factors will also affect budgetary thinking, added Remme. These factors include: special education enrollment; special education funding support from state and federal sources; foreign exchange student numbers (these students bring in funding but also impact class sizes); the Affordable Care Act and its associated cost; and the new administrative staff pattern (a new superintendent replacing the retiring Remme, at a potentially different pay level and with possible different ideas).
"I don't want to make you feel bad, or defeated," noted Remme, addressing the board.
"But we need to correct the deficit spending process; we cannot indefinitely continue deficit spending... "There will be money for some class size reduction, and we'd like to see it balanced between the elementary and secondary level.
"But we need to be cautious, so that what we put together is sustainable over time."