Unfunded mandates and state aid that lags behind inflation have meant that Westonka Schools has reached ever deeper into its reserve purse to meet costs and stay competitive in an area where open enrollment to Orono and Minnetonka is an easy switch to make.
The district now is looking to raise its operating levy for the first time in 12 years, and the School Board approved language for the referendum question late last month.
“With constantly reviewing our budget and making reductions to expenses, looking for ways that we can generate more revenue for the school district, we didn’t have confidence that we could do that,” said Westonka Superintendent Kevin Borg of remaining competitive with nearby districts Orono and Minnetonka.
The district has not raised its operating levy since 2007, but voters have passed a number of bond measures since then, notably the almost $23 million bond measure in 2016 that funded the Performing Arts and Activities centers.
The proposed levy change is a “revoke and replace” of the three existing levies with one two-tiered levy and is expected to cover budget shortfalls over the next 10 years and provide an additional $2 million.
The district is tapping its reserve fund for the third consecutive year despite growing enrollment, a trend that Borg said had previously been discussed as an indicator the district may need to look into increasing the levy.
Westonka Schools received $20.45 million in state aid, or almost two-thirds of its $32 million budget, during the 2018-’19 school year. State funding, though, hasn’t kept pace with inflation over the years, nor has it been enough to cover largescale mandates like the district’s $4.5 million Special Education program, said Kathy Miller, finance director for Westonka.
District officials estimate that without the levy increase, Westonka is looking at $750,000 in cuts for the 2020-’21 school year. Borg said cuts throughout the district would be too large an impact on student learning and that more revenue was needed.
Westonka currently has the lowest total school property taxes, which include levies and bonds, of all 22 public school districts in Hennepin County. At $1,446 per student, Westonka’s proposed 2020 levy would still be only roughly 70 percent that of neighboring districts Orono, Minnetonka and Wayzata, each of which enjoys local revenues over $2,000 per student.
“When you look at the competitiveness of this area and having the lowest taxes, it just doesn’t happen,” said Borg. “I think the reality is, and why the board took this action, is if we needed to make those reductions, we would see a change in class sizes, we’d see a change in programming, we’d see a change in supports that are available, and that’s where the concern lies.”
The proposed levy would provide an additional $1 million for the district starting with the 2020-’21 school year and another $1 million for the 2024-’25 school year after phase two goes into effect. Slight inflationary increases would take effect in between.
Phase one would bring funding to $1,446 per student, an increase of $350 over the current authority of $1,096; the full levy, when it comes to completion in phase two, would bring that to $1,926, or an additional $830 per student.
“Our thought process around this was really to complement – one, to stay competitive and get a long-term plan, but also to continue to focus on the tax impact,” said Borg. “Rather than asking for all these dollars up front, we decided to split it into two tiers.”
The tiered approach is one that met with voter approval in Mahtomedi last fall and is one which Heidi Marty, a Westonka school board member, said provides the district with flexibility when enrollment fluctuates year by year.
Westonka had been able to rely on enrollment growth and its reserves the past few years, but enrollment is expected to taper off – and then decline – starting with the 2022-’23 school year, projections show, and those reserves are now hovering around $2.97 million, or 9 percent of the district’s operating budget. For healthy fiscal management, the district targets having a reserve fund between 8 and 18 percent of its total budget, said Miller.
If the referendum is not approved in November, Borg said every area will be looked at for cuts, including teachers, paraprofessionals, transportation and administration.
Already, the district has capped enrollment to its kindergarten at Hilltop Primary for the first time with the present school year and ended its lease at Stonegate Plaza, site of its early childhood program, despite year-over-year growth in enrollment. Five paraprofessionals were also laid off at the end of last school year, and schoolboard members like David Botts and Ralph Harrison have hinted at a possible reconfiguration of the school grades as they’re spread between the schools to maintain a good student-to-teacher ratio.
“We need to continue to be frugal in how we move forward, but we also need to be creative,” Botts said.