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Orono School Board Sets Operating Levy Election

Voters will decide on proposed increase of $400 per student.

In a unanimous vote, the Orono School Board approved conducting an operating levy election in November. The vote, taken at the board’s Aug. 19 meeting, finalized months of study of how the district can protect its national reputation for excellence in light of less-than-adequate state funding increases.

Residents will be asked to revoke referenda they approved in 2004 and 2006, and to renew them both for an additional 10 years.  State law limits the length of a voter-approved operating referendum to 10 years.

Included with the request for continued funding will be an increase of $400 per student. The additional revenue help the district to protect its many recent program enhancements in World Language, STEM (Science, Technology Engineering, Mathematics) and guidance services, as well as to maintain reasonable class sizes.

The additional investment by the owner of a $450,000 home would be approximately $15 per month with the renewals and additional authority.  “This is an excellent school district delivering excellent results for the students who attend here,” said Board Clerk Mike Bash.  “This is about protecting the excellence.”

While the 2013 Legislature supported public schools, much of the funding provided was devoted to all-day kindergarten and to repay school districts for the money the Legislature withheld in aid payments the prior year.

In fact, during the past 10-year period (2003-2013), inflation has outpaced state aid increases by nearly 30 percent, according to Implicit Price Deflator.  In addition, school districts continue to feel the impact of the special education cross-subsidy.  The cross-subsidy refers to the fact that school districts are forced to redirect funding meant for general educational purposes to cover unfunded federal and state special education mandates.  In Orono, the cross-subsidy amounts to $1.4 million each year.  Statewide, the figure totals more than $600 million.

“This problem isn’t going away,” explained Board Treasurer Dick Lewis.  “It’s structured into the way schools are funded [by the state].”

In recognition of districts’ needs, the Legislature did provide authority to seek additional funding through voter approval.  As a result, many metro area school districts have committed to, or are considering, asking voters to approve additional operating funds.  Neighboring districts include Eden Prairie, Hopkins and St. Louis Park.

“We have an obligation to do something,” said Board Vice Chair Martha Van de Ven.  “Our administration has worked so hard to save every single dime and to do the best for our children.”

This spring, the School Board received a careful analysis of its operating budget for the next five years.  With no increase in funding or painful cost-cutting measures that affect the classroom, the operating deficit could approach $2.5 million by the end of that period.

The Board Subcommittee on Finance and Facilities studied the results of that analysis, the 2013 legislative session and a communitywide survey to develop a recommendation.  Members of the subcommittee are Bash, Lewis and Director Bob Tunheim, all of whom hold Masters of Business Administration degrees and have solid financial backgrounds.

Legislative action would have allowed the Orono School Board to seek up to an additional $809 per student.  The subcommittee recommended $400 as a fiscally-responsible solution.  It is expected to enable the district to protect its recent initiatives and to avoid major cuts during the next five years even if state funding falls shorts of inflation.  “I think we struck a nice balance,” Lewis noted.

Ongoing operating efficiencies enacted by the district in recent years will remain in place to enhance the district’s bottom line.  The district has been able to avoid budget cuts that affect the classroom by trimming more than a quarter of a million dollars in operating costs.  Major contributors to this impressive total are consolidating bus routes, renegotiating all service contracts, receiving wage concessions and eliminating one position in the District Office.

The district has also slashed energy costs by using new equipment and new conservation measures.  By partnering with SEE (Schools for Energy Efficiency), Orono achieved a cost-avoidance of $58,263 and saw an overall reduction of 11 percent in energy use during the 2012-13 school year alone.  “Cost-avoidance” is a calculation of dollars that would have been spent on energy had not conservation measures been implemented.

Board members felt it was prudent to conduct a referendum vote in connections with the School Board election (Tuesday, Nov. 5).  This will save the cost of holding an election next November when the 2004 renewal is due and again in November 2016 when the 2006 renewal is due.

For many years, property owners in the Orono School District have paid the second lowest school taxes in Hennepin County.  Orono would remain the second lowest with the renewal of the two existing levies and the new authority.

“We all know that the state has indicated its primary objective is to get to the point where it can feel like adequate funding is being provided to the state’s public schools,” concluded Board Chair John Malone.  “What we’ve heard from our voters, both on the streets and in the data, is that adequate funding is not the objective of this district.  [Our objective is] excellence.  This measure allows us to protect the excellence.”

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