|1.I recently received
the latest Education Minnesota Negotiations Bulletin. This installment deals with analysis
of school district financial conditions. As we are presently working with the research
people at Education Minnesota to develop an overall assessment of our school district, I
was tempted to put the material aside. I decided to take a quick glance at the
information presented. Im glad that I did.
found to be most interesting was a series of pages comparing the net operating fund
balances of the school districts across the state. The net operating fund balance is
defined by statute as follows. "Net unappropriated operating fund balance means the
sum of fund balances in the general, food services, and community service funds minus the
balances reserved for statutory operating debt reduction, bus purchase, severance pay,
taconite, re-employment insurance, maintain levy reduction, operating capital, disabled
access, health and safety, and encumbrances, computed as of June 30 each year." For
those of you without time to read further, lets go straight to the point. On the
basis of this state-wide comparison Duluth looks good
Let me qualify what will follow by saying that the comparison is
many pages long with hundreds of districts listed. I may have missed something. If so, I
apologize in advance.
The school districts are in alphabetical order and have the
following information given for the years
95,96,97,98---Net Operating Fund Balance (Net Op. FB),
Fund Balance per Pupil Unit (FB per PU), and Rank per Pupil Unit (Rank per PU) for each of
these years. There is little point in going through the entire listing. I picked out some
of the more interesting districts and information.
As of June 30, 98
District NetUnapOp.FB FB/PU
Lk Sup. 4,320,730 1
S Wash. Co. 10,166,041
Although this is not a complete listing of all 400
plus districts, I think that we can see some interesting comparisons. Unless I missed
something, 2.Duluth has the fifth largest fund balance in the state. Among the large
districts Duluth has the highest fund balance per pupil unit, and is ranked 69th.
The highest ranked school district listed is Pine Point which is ranked three with a
Net Operating Fund Balance per UP of $8010 and a total Net Operating Fund Balance of
$512,265. Pine Point has 124 students. Last year they were number one per pupil unit. The
number one and two districts for this year were not listed.
Ive been told that one of them actually has its students
educated in North Dakota. The districts which rank above Duluth in per pupil unit balances
are all much smaller. The districts to which we are compared are the large school
districts. I did not find any ranking better in the comparison of balances per pupil unit
among the big districts.
As I stated earlier, Duluth has the 5th largest total
fund balance. Combining this with the highest ranking per UP one could easily make the
argument that this school district is top among the large school districts in the state. 3.The
positive financial condition of I.S.D. No. 709 has been improving over the past several
years. As recently as 1995, Duluth had a Net Unapp. Op. FB of -$46,922, with -$3 per
UP, and a per UP rank of 327. By June 30 of 1996 the figures had improved to
and 219 respectively. June of 1997 found the district with
and83rd in per UP rank. Today the Net unappropriated Operating
Fund balance is nearly $17.5 million and building.
We have all read the newspaper accounts of how the recent
contract settlement would require program cuts. The school board is presently pleading
poverty. How does one explain the financial problems in light of the state report? I
really dont know. In the Net (unappropriated Operating Fund Balance) scheme of
things Duluth seems to be in very good shape indeed.
Frank Wanner, President
1.Frank is treating this information as though it were a great revelation
to him. Its not. Almost a year ago Frank sent an accusatory letter about this very
subject to our finance director. The information Frank is referring to is just an annual
update that shows that Duluth has a better budget reserve than many other school
districts. This is not news to anyone who read the newspaper throughout the recently
concluded contract negotiations. However, by listing all this "authoritative
information" with its intimidating acronyms Frank leaves the confused reader with the
impression that somehow the Duluth School Board is holding out on the teachers. This is
what our teachers have been told for years and it is wrong.
Last year, after reading Franks letter on this subject, I
spent days on the phone with the finance people of the State CFL (Education) Dept. to make
sense of the budget info and all those annoying acronyms.
2.So what? Frank doesn't deny that we anticipate having 1.9
million more in expenses this year than revenue. That's a deficit. At 17 million dollars
our reserve accounts for less than two months spending. It could be gone in a wink if not
3.Not any more. When Frank says it is growing he is grossly
wrong. We will soon cut 1.9 million out of our budget reserves to pay for the new
Here's our budget history. A few years ago we had a substantial
debt at 5.5 million dollars and we were paying lenders to borrow money to meet our
expenses. How did it become a reserve? The voters approved an excess levy
referendum in 1993 which the School Board pledged to use to pay off the debt and build a
ten percent reserve. The School Board kept its promise. Frank wants this money but he
wants to avoid blame for putting the school district in debt. He would prefer to blame a
new debt on School Board mismanagement. Our teachers suffer with lower salaries and
reduced staff when we don't have a reserve.