| State may delay funds for school district |
By: Corey Butler Jr.
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Posted: Wednesday, February 3, 2010 1:23 am
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The Kenyon-Wanamingo School District has worked feverishly the last six years to climb out of statutory operating debt.
Now it may have to pay for all its work — literally. About $500,000 is expected to be delayed in payments to the district in March.
Last week, state officials announced the likely delay in payments to school districts.
State government is bracing itself for a billion-dollar deficit in its next biennium and is looking for ways to help pay the bills through the fiscal year, which ends June 30.
Potential withholdings are based on the percentage districts have in reserves, meaning those with healthier savings accounts get hit the hardest.
The state plans to hold back payments twice in March and once in April. The Commissioner of Minnesota Management and Budget determined the move would reduce the need for state short-term borrowing. By law, the state has to do this before it considers borrowing money.
Districts receive payments the 15th and 30th each month.
The K-W district is slated to receive about $785,000 over the course of those three payments. The state, based on its aid-reduction formula, estimates the district could make it without about $503,000 of that money, or 64 percent.
Under the proposal, K-W would have 100 percent of its first payment in March withheld, totaling about $260,000. About 77 percent of its March 30 payment would be withheld, about $243,000. It’s April 15 payment — $208,000 — would go untouched. These are the maximum amounts that could be delayed.
“Somehow we have to make it,” said Superintendent Jeff Evert.
For now, Evert said he doesn’t expect the district will need to borrow money to make it through the school year. It did, however, borrow about $1 million in the fall, he said.
The downside of not receiving the payments on time is it eliminates the potential of the district investing the money and making some money in return.
Evert said the district has positioned itself well in recent years with tough decisions to make cuts to get itself back in a financially stable position.
Its fund balance at the end of the last school year was more than $800,000, while the district has about $2.5 million in cash and investments, according to a report released by the state.
The Northfield School District is slated to have about $4 million delayed and the Faribault School District is facing about a $2.9 million delay in payments.
The Owatonna School District could have $3.1 million delayed.
The Goodhue School District is excepted to have all of its $239,000 delayed during that time.
The Cannon Falls School District, Triton School District and Zumbrota-Mazeppa School District are not being targeted for delay. All three districts are expected to receive approximately $1 million total for those three payments.
For those districts expecting a delay in payments, they have been told they would receive their funding in full by May 30.
K-W, like the other 230 districts targeted, are scheduled to have the money delayed because they have sufficient fund balances to get them through the delay. There are 106 school districts not subject for delay, nor are intermediate school districts and charter schools.
— Reporter Corey Butler Jr. may be reached at 789-6161 or 333-3148. |
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