Farmington School Board approves 4.92 percent increase in preliminary levy

Body: 

The Farmington School Board approved its preliminary levy at a 4.92 percent increase.

Finance Director Jane Houska gave a report Sept. 25. The board voted to unanimously approve the preliminary levy.

The total levy payable in 2017 is $24,373,463. The levy payable in 2018 will be $25,573,650, an increase of roughly $1.2 million.

School boards are required to adopt a proposed property tax levy by Sept. 30. The proposed levy is based on information provided by the Minnesota Department of Education given to the district Sept. 20.

Levy changes

The levy will most likely change based on future updates by the Education Department.

Houska recommended the board certify the levy as "maximum" versus a specific levy amount less than that. She explained how approving the levy in that manner allows for levy changes due to the state education formula adjustments, corrections or data updates.

Houska highlighted a few levy details. Under the student achievement category within the general fund, Houska explained how when the state was struggling with cash flow three or four years ago, it withheld funding from school districts.

"What they thought was a great idea would be that instead of giving the school districts aid, why don't we let the school districts levy their residents for it?" Houska said.

State funding has never been enough to support larger districts like Farmington that receive $95,000, Houska said.

The theory behind it was that this sum of funding would help when the state did not make payments, she added.

The $95,000 is not able to fund a lot in the school district, Houska said.

"They (the state) came to the conclusion that you (school districts) are right and they appealed it, and so that is why that amount is zero," in student achievement category of the general fund, Houska said.

Less operating capital

Within the general fund, the operating capital went down by roughly $47,000.

The operating capital payable for 2017 is $355,163, and the projected payable in 2018 is $308,364, a decline of 13.18 percent.

"What it means is we are taxing our community less and the state is picking it up on the aid side, so this is the second year where this has happened and they have shifted levies and we can only hope that continues into the future," she said.

The long-term facility maintenance program is designed to fund the largest 25 school districts for deferred maintenance projects that has been phased in. The district asked the school board to approve the long-term maintenance projects every August and to plan ahead 10 years with projects.

"This past August, we came to you (school board) and said we are going to try to maintain that $1.25 million going forward," Houska said.

After talking with the state Education Department, Houska said: "With your preliminary levy, you really want to put it at your max in case we make some other calculations on our other formulas, or if we misunderstood what the legislature wanted in a funding source and that way you could be limiting what your total funding could be as a district."

In regard to community education funding, Houska said she and the administration has worked to clean up estimations with school-aged child care.

Reminding the board how school-age care is not funded for all enrolled in the program, Houska said the district can levy money for those in need or who have a disability.

Debt service

The district's debt service will see a projected 1.67 percent increase. The total debt service payable in 2017 is $15,148,238 and the projected payable for 2018 is $15,400,774.

"The great thing about bonds is that we are able to structure them how our community is," Houska said.

Because Farmington is a growing community, the OPEB bonds and building bonds are end moving, Houska said. This means that the bigger payments will occur at the end and will be maxed out in 2023 with the highest in payments and then decline afterward in the amount of debt taxpayers will pay.

As the Farmington population increases, this will drive the tax base and hopefully make the tax burden less on a household than if the district would have front loaded it and made it even over the 20 years, Houska said.

The Truth in Taxation meeting for Farmington Independent School District 192 will be 6:30 p.m. Dec. 11, in the Farmington city hall chambers.