District makes last minute property tax levy change

Since the truth-in-taxation hearing Dec. 2, District 622 business staff combed over the 2009 property-tax levy proposal for ways to alleviate the impact on residents' pocketbooks.

Residents who spoke at the hearing asked for no new taxes and shared the overall burden they face from the school district, city and state combined.

The result was the elimination of the alternative facilities levy for 2009-10, an expense of just over $1 million. Staff also recommended the building/land leases be reduced to about $1 million from $1.2 million.

Both recommendations and the final property-tax levy of about $37.5 million were approved by the School Board, 6-1, at its Dec. 16 meeting.

Theresa Augé voted against the levy, explaining did not support removing the alternative-facilities levy because it would give residents the impression that the district is not taking care of its buildings.

That levy includes money for projects that could be covered by the construction fund, if needed, said Business Services Director Dennis Sullivan.

One cost that stayed in the 2009 property-tax levy was the sale of pension bonds to fund "other post employment benefits" (OPEB).

Residents who spoke at the tax hearing did not agree with the sale and asked that it be removed from the levy.

However, the staff did not recommend eliminating the bond sale from the levy, and the majority of the board agreed.

OPEB are for employees hired in the school district prior to 1986 who are eligible to receive the same benefits they did when working after they retired. The employee contracts were changed in 1986, and the district no longer has to pay those benefits to anyone hired after that date.

The district pays about $2.8 million each year from its general fund for the OPEB costs. With the board's approval of the 2009 property-tax levy, that money will be available in the general fund for education.

Total projections for the district's OPEB expenses, which will subside once there are no longer any retired employees to pay, are $41 million. The board approved the sale of $30 million in bonds, which, with interest, will pay the expenses and be in the property tax-levy for 25 years.

Having the dollars used for OPEB back in the general fund budget will help offset cuts that likely will need to be made in 2009-10, Sullivan said.

The district will receive no state aid during that budget year and there will be a deficit between revenues and expenditures, he said.

In addition to the final 2009 property-tax levy, the board also approved some budget revisions, which are presented by staff several times per year.

This month's revisions include increases in salaries and benefits and a corresponding increase in general education aid to reflect an increase in enrollment, according to Sullivan's recommendation.

The board unanimously approved the changes.

More students than expected
Enrollment this year is 11,456 students, which is higher than the administration's projection of 11,150, so additional staff were hired to accommodate the influx. The district receives $8,000 per pupil from the state, which is about $1.7 million in extra revenue, Sullivan said. The salary and benefit increase totals about $3.3 million.

Sullivan also presented a five-year financial plan to the board during a workshop prior to the regular board meeting Dec. 16.

Enrollment is projected to decline in 2009-10 to 11,291 students, but Sullivan stressed that the actual amount is not be known until after school starts each year.

Health insurance costs for 2009 are projected at about 10 percent of the budget. Sullivan predicted that amount to be 25 percent for 2010, about $2.5 million in additional expenditures.

Energy costs are at 5 percent, a low figure. "But, I don't think that's going to hold," Sullivan said.

Revenues and expenditures are even for the 2008-09 budget, and staff in various departments are working on projections for 2009-10. That budget will be approved next summer.

Katy Zillmer can be reached at kzillmer@lillienews.com or at 651-748-7822.

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