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January 18, 2019

12/20/2018 1:36:00 PM
North Branch School Board sets 2019 levy, extends superintendent contract

The North Branch school District sold $4 million worth of Aid Anticipation Certificates last week to help with immediate cash flow.  This type of borrowing is done regularly by school districts in Minnesota to fill gaps until revenues arrive.  

District Finance Director Dr. Jon Ellerbusch and the certificates broker representing PMA Financial,  both  remarked that the interest rate on this-- at 1.9 percent,  was very favorable for the district.   Piper Jaffray and Co was the low bid.

Aid Anticipation Certificates get the full backing of the state so investors feel secure, the Board heard. Should a district in Minnesota fail to pay off borrowing, the state does so.  Maturity is September 2019, so this is short term borrowing. North Branch gets the money January 24.

Other North Branch financials were front and center last week, as the Board unanimously adopted the levy for 2018-2019. This affects property tax payments starting May 2019.  The Board won’t set  next year’s budget until mid-summer, after the state legislature has been in session.

The levy collected locally is projected to go up by about $68,000.  Market values of properties are increasing from last year, and this makes it hard to predict exactly how this reflects on your individual tax statement.  

The state contributes 66 percent of North Branch District revenue and local property tax covers 28.7 percent, with the remainder of income through federal programs and various fees, fundraisers and donations.

The audit for the year ending June 30, 2018, which the Board also accepted last week, showed:
~ For 2018 the glaring expenditure overage-- one that grew by 36 percent-- was for transportation.  The district had to purchase unbudgeted contracted services and paid a premium.  The Board has now contracted with  a private busing provider 4.0 School Services.

~ Audit presenter Mary Reedy, for CliftonLarsonAllen,  cautioned the district to keep an eye on General Fund fund balance.  According to the audit North Branch’s balance has dropped the last two years-- after fund balances 2014 and 2015 were built  to double digit percentages. The audit shows just 5.3 percent of annual expenditures available in the balance for last year.  

~ The Community Service Dept. spent $66,000 more than it had for revenues in fiscal 2018.  Auditors advised the district to “...ensure programs continue to be self-sustaining.”
~ Loss of students continues to be an issue.   

State school funding is mainly tied to any district’s enrollment. It’s a combination of art and science to create the budget using predictions on how many pupils will be seated in desks for the following year.  

North Branch has endured an enrollment decline from 2008, when there were 3,769 versus last year,  when the “average daily membership” was 2,860.

In other matters: the superintendent contract was renewed/approved to 2021. Dr. Henton is in her 12th year leading the district, and next year’s wage will reflect that longevity at $184,975.  The wage for year two is left open to be negotiated.  

According to Dr. Ellerbusch, contacted after the Board adjourned, the next year superintendent pay adjustment matches the 3.5 percent increase approved for other administrators in the district.  Unlike many other district contracts in Minnesota-- Dr.Henton gets no vehicle provided, but mileage is paid in the course of performing her duties.  There were five days added for vacation time for next year.

~ The School Board recognized fall athletes at the beginning of the meeting.  All Conference, Academic All Conference and Honorable Mention students come before the Board plus extra-curricular programs being honored.

~ The Board welcomed the high school’s JROTC lead officer Paul Johnson,  as he introduced North Branch student, Hannah Peiffer, a  JuniorROTC cadet at North Branch Area High School.  She was chosen out of 120,000 cadets nominated nationwide, to receive a Lifesaving Award of Valor.

Peiffer was aboard a cruise ship in March 2018 when a young child fell into a swimming pool and Peiffer noticed her exhibiting signs of distress.  The cadet’s swift action was the only thing that kept the child from drowning, the school board members were told.

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