"Where Olmsted County News Comes First"

32

Are you comfortable with the National Security Agency having access to your cellular phone records as a matter of Homeland Security to combat terrorism?

 Yes, I have nothing to hide

 No, this is another example of our government invading our privacy

 I don't own a cellular phone


View Results

Comment(1)

A Five-Year General Fund Financial Forecast was presented to the Rochester School Board at the regular meeting on Tuesday, November 13. The forecast in May 2012 projected a deficit of approximately $4.5 million for 2012-13. The School Board agreed to forego a budget reduction process to eliminate this gap, and agreed to utilize a portion of the fund balance to maintain programs for the 2012-13 fiscal year.

The budget has been since revised and the November 2012 forecast now projects a positive difference of approximately $200,000. The budget adjustments are due to higher than projected student enrollment (361 more students than expected which increases State revenue), increased revenue from a revised State Special Education Aid formula, reduced salary and benefit projections, and reduced utility expenditure due to flat-lining rates of several utility companies that contract with the district.

After a presentation of a district-wide budget audit by Clifton Larson Allen’s Kimberley Hillberg, it was explained that though the Rochester School District General Fund Balance appears healthy at $39,535,066, the figure does not necessarily represent cash in the bank. In fact, of the district’s General Fund, only 7 percent, or $2.7 million, is cash.

According to a district-authored report, “The majority of the District’s General Fund revenue comes from the State. State aid should normally be the primary source of revenue increases. The local property tax levy is the next largest source of revenue.”

Executive of District Finance Larry Smith said, “The more reliant you are upon State Aid, the less your fund balance is cash in the bank.” And the less flexible the budget.

The forecasted budget gap for 2013-14 is projected to be approximately $5.2 million, and for 2014-15 is approximately $9.0 million. For future Strategic Planning, the District will need to take to task a combination of revenue increases and expenditure reductions of approximately $4.4 to $5.0 million annually to prevent budget imbalance.

“While we’re not looking to lay anyone off in 2013-14, we still need to be looking long term at what’s ahead,” said Larry Smith.

One particular expenditure which has increased well beyond the rate of inflation is district health insurance. The Trust Committee for Rochester Public Schools approved a recommendation for increasing the health insurance premium for single and dependent coverage by approximately 10 percent for 2013 coverage. While the Medicare Supplement premium will not be increased, what the increase translates into is for a single health plan, the current premium of $652 per month will increase to $717 per month come January, or for a dependent health plan, the current premium of $660 per month will increase to $726 per month, or $1443 per month for full family coverage. For teachers hired before 2006, the District pays 100 percent of the single premium and 70 percent of the dependent premium, according to the contract. For teachers hired after January 1, 2006, the District pays 90 percent of the single premium and 60 percent of the dependent premium.

“The trend of increasing premiums,” says Judy MacDonald, Executive Director of District Human Resources, “is caused by increasing costs in healthcare coverage along with inherently limited changes in our current plan design. However, that is changing. New this calendar year an alternative plan will be offered to employees which we hope will positively influence this trend in escalating premiums.”

Health insurance premiums have been escalating up to 10 percent on average per year for the last five years.

To continue the discussion of financial affairs in the Rochester School District and to elicit community stakeholder feedback on the proposed property tax levy, it was announced that the School Board Special Session “Truth-in-Taxation” Levy Hearing will be held Tuesday, December 4 at 6:30 p.m. at the Edison Building.