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Decision could be made in July

The Rosemount-Apple Valley-Eagan School Board could vote on a potential operating referendum recommendation in July.

The School Board discussed possible referendum options during a June 10 special meeting. District administrators presented four scenarios for a referendum. During the regular business meeting that followed the same evening, Superintendent Mary Kreger said district officials plan to bring a recommendation back to the board on June 24 and ask for a board vote on the proposal July 22.

The School Board also plans to gather for a special meeting to discuss referendum options again at 5:30 p.m. Tuesday, June 18, at the district office, 3455 153rd St. W. in Rosemount.

The district has said it faces an estimated $25 million shortfall over the next three years. The School Board approved $7 million in budget adjustments for the 2019-20 school year in February in an effort to begin closing the budget shortfall.

“We have yet to live the implementation of the adjustments that we made this year. We still have to live that next year. As administrators are staffing, they’re really struggling,” Kreger said, adding she’s concerned with the scenario of living with the reductions.

In a survey conducted by Morris Leatherman Co. earlier this spring, 26 percent of respondents indicated they would strongly support an operating referendum that would levy $400 per pupil unit more than the district’s operating levy approved in 2013. Thirty-eight percent said they would support it, while 20 percent oppose it, 12 percent strongly oppose it and 4 percent are unsure. That levy amount would be about $17 per month increase in school taxes for the average price home.

On June 10, Kreger said without additional funding, the district would have to make about $18 million in adjustments during the 2020-21 and 2021-22 school years.

During the 2019 fiscal year, the district received $1,207 per pupil unit from the 2013 operating levy. The average for Minnesota’s 10 largest districts in 2019 is $1,495 per pupil unit, which is $288 more than the current District 196 levy. The average for the 48 metro-area districts is $1,232 per pupil unit, according to District 196.

Director of Finance and Operations Mark Stotts noted operating levy per pupil unit amounts will change in fiscal year 2020 because of new legislation that moves $300 of voter-approved levy to board-approved levy. This means the adjusted levy authority will be $939.67 per pupil unit.

During the regular business meeting, two Apple Valley residents spoke during the public comment portion in support of the district seeking a referendum and asked the School Board to go out for one this fall.

“We’re facing $18 million in cuts, just had to do $7 million in cuts. It’s not the right way to be able to take care of education for our kids,” said Charles McCready.

Rebecca Gierok said instead of taking $25 million in cuts over three years, she wants to fund students’ education to be sure the future remains solid.

“I thank you for your strong stewardship of funds in the last several years and look forward to continued successes,” she said.

Referendum options

The first option presented at the June 10 special meeting would be no increase in per pupil units, which would lead to making $18 million in cuts over two years.

The second option proposed a $250 per pupil unit increase, which would bring in $8 million in additional revenue per year. The monthly tax impact would be $10 for the District 196 average value home of $286,000. This levy increase would prevent further budget adjustments but no “program improvements” could be made, according to the presentation.

The third option was for a $460 per pupil unit increase, which would provide $14 million in additional funding annually. The monthly tax impact would be $18.33 on the average value home. This increase would prevent more budget adjustments and allow $6 million to be used for program improvements each year, the district said.

The final option would bring the levy up to the state cap with an $826 per pupil unit increase. This would bring in $26.5 million in additional revenue each year and the monthly tax impact would be $32.92 on the average value home. This option would prevent more budget adjustments and allow $18.5 million to be used for program improvements each year, according to the presentation.

Kreger said administration’s preliminary recommendation would be to call for an operating referendum question on the Nov. 5, 2019, school district election that would revoke the existing levy and replace it with a new, 10-year levy that would raise an additional $14 million per year with annual inflationary increases.

If passed, the increased funding would prevent the $18 million in budget cuts. The district would also spend $4 million to lower class sizes and restore some student staffing cuts; $1.5 million for additional mental health support for students and additional mental health support staffing at all schools; and $500,000 for after-school activity bus transportation at all middle schools and high schools five days a week (which was eliminated in 2010), Kreger said.

Board Member Art Coulson said $4 million doesn’t seem like a lot to devote to lowering class sizes. He asked if there’s some number between the $460 per pupil unit and $826 per pupil unit increases that could be considered so the district could put more toward lowering class sizes.

Coulson also asked if the operating levy could be split into two questions – with asking for the $460 increase in the first question and another levy increase in the second question that would go toward reducing class sizes specifically.

“I’m hearing a lot in the community about class size, unsolicited,” Coulson said.

Board Member Sachin Isaacs said a tax impact of $18.33 a month is a good start but he believes that the district has support to ask for a little more based on the survey results. He agreed with finding a midway point between the third and fourth referendum options.

“Let’s do the best sales pitch we can. The economic environment is great and the need is acute,” he said.

Isaacs suggested that the district look at a per pupil unit increase that would be a $25 per month increase in school taxes. After further discussion, other board members agreed with looking at the $25 figure.

Stotts said he would have to check with the district’s attorney about whether an operating levy referendum could be split into two questions. He’s seen that approach with bond referendums.

Patty Dexter can be reached at patty.dexter@ecm-inc.com.

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