It really isn’t a news flash stunner, but the Clark School District 12-2 is preparing to opt out in 2013. This means that the school district cannot operate on the revenues generated by the maximum levy for the school’s general fund, in the opinion of the administration and the school board, and will choose to opt out of the tax limitation freeze.
At the January meeting of the Clark School Board, Superintendent Brian Heupel and Business Manager Heidi Sigdestad detailed the gloomy financial future of the district. The administration outlined the financials: month-to-month expenditures, the month-to-month revenues, projection, scenario, cash flow and timeline.
The bottom line is that the projected fund balance at the end of the 2013-14 school term would be $82,670, if all variables remain the same. A financial figure of this amount is not enough to carry forward into the following school year, causing the opt out progression discussion at a very serious level.
Heupel explained and reiterated that this situation did not happen overnight; it has been ongoing the entire millennium, and at this point, all future cuts will involve programs, not just personnel.
What is an ‘opt-out’?
When the school district cannot operate on the revenues generated by the maximum levy for general fund and monies from state aid as determined by the funding formula, then the school district may choose to “opt-out” of the general fund levy limitations. School districts may opt out for General Fund only. Opting out is to impose an excess levy. The excess levy shall maintain the same proportion represented in the mathematical relationship at the maximum levy. An Opt Out should not be done until January 1 or after BUT must be done on or before July 15 of the year prior to the year the taxes are payable.
As Clark School deficit spends at a rate of $297,000, already having cut $500,000 in the cuts the past decade, “we are staring an opt out down,” said Heupel, and he continued that over the last five years his budget targeted with high expectations for expenditures and low expectations for revenues has always teetered on an opt out situation, but never come to the the actual point of having to declare and prepare for an opt out.
Because the reserve fund numbers are so dire, and all cuts have been made, and everything moneywise is down to ‘brass tacks,’ Heupel and Sigdestad feel this direction is necessary for the well being of the school’s finances.
Heupel went through the timeline process with the school board. In the near future, an advisory committee will be set up to help plan strategy, followed by a public meeting, followed by a board decision.
This advisory committee was asked for by the superintendent, and will be a small group of those who have worked with school finance in the school community to aid on the grassroots level.
If an opt out is declared by the school board, it must be done by July 15, so the board must act accordingly in the next six months.
“We’ve started the ball rolling and the next two board meetings will decide the future of this opt out,” said Heupel.
As reported by the Yankton Press & Dakotan, at least 71 of South Dakota’s 152 school districts, about 47%, approved an opt-out for the 2012 tax year.