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Panel focuses on budgets past, present and future BRAINERD SCHOOL BOARD Staff Writer The Brainerd School Board's Finance Committee Thursday spent four hours looking at its past, present and future budgets.
The committee first heard the 2007-08 audit report and the regular and school activity fund audit report from Tom Koop of Larson Allen and recommended the school board approve both audit reports at its next meeting.
Koop said the audit was clean, except for the error that the school district found in early September that it had $1.65 million more in its unreserved fund balance because expenditures came in lower than budgeted by more than $500,000 and revenues came in higher than projected by about $1.1 million.
Koop wrote in his report that the district's unreserved fund balance has approached its lowest amount in more than 20 years and expenditures restrictions and reductions will have to continue to be the tool used to maintain and build up the back-up reserve. The district's unreserved fund as of June 30, was at an estimated $1.9 million.
Koop said the district's unreserved fund was low, but it wasn't in statutory operating debt yet.
"We really were at the edge of the cliff, but we're getting away from that edge," board member Bob Nystrom said. "We're running this year with a healthier fund balance."
A bulk of the finance discussion took place looking at a Financial Planning Model presented by Jim Sheehan and Ann Thomas of School Finances Inc. of Lakeville.
Steve Dickinson, director of business services, said the district is contracting with School Finances Inc. for $1,500 a year to help the district develop a budget plan. School Finances Inc. provided the committee with its Financial Planning Model, which is a multi-year planning system that allows school districts to simulate many financial scenarios to help it make its budget decisions.
The committee did not make any decisions, but looked at several scenarios relating to enrollment, referendum and staffing options, state funding and reviewed what its reserve fund goal would be. The committee will meet again in November to look at the financial model.
Sheehan said in financial planning, people learn to make assumptions and they become more aware of what's going on. Sheehan said in his financial model, districts can choose either a conservative approach or a more liberal approach when planning its budget, such as predicting enrollment numbers for the coming years.
Sheehan said districts should look at their enrollment history and current enrollment to predict coming years.
Superintendent Steve Razidlo said the district saw a decline this school year because of its budget cuts so it'll have to take a closer look at its enrollment. Razidlo said another factor coming into play with enrollment is the outcome of the Crosby-Ironton School District's referendum.
The committee also looked at the special education budget. Dickinson said the district budgeted about $7.1 million in special education funding, but when the committee looked at the financial model, members said it may have been too liberal and lowered the funding down to $6.9 million.
In other business, the committee recommend the district submit a grant to the Minnesota High School League that would assist students with participation fees.
The committee recommended the school board approve an amendment to the ice arena lease with the city of Brainerd that would allow the district to retain the gate revenues starting at the beginning of the 2008-09 hockey season. In exchange, the district lease payment for the season would increase by $6,000. The Brainerd City Council already approved the amendment.
JENNIFER STOCKINGER may be reached at jennifer.stockinger@brainerddispatch.com or 855-5851.
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