An operating levy referendum is a legal vote by residents to increase revenue to finance the general operation of their school district. By law, city councils and county boards can determine their operating needs and then levy the taxes to pay for them. School Boards, on the other hand, must ask voters to approve an operating levy increase. State law “caps” how much school districts can generate through this means.
Basic state education funding has dropped by more than $600 per student from 2003 to 2016 when adjusted for inflation and pupil weighting changes. This amounts to a loss of $1.8 million for the district in 2016-17.
In addition, many Special Education mandates remain unfunded by the state and federal governments, requiring districts to make up the difference with General Fund (main operating) dollars. For Orono, that results in the reallocation of $1.4 million during the 2016-17 school year away from general classroom education to cover Special Education needs.
The combination of inadequate state funding and other budget pressures is why the school district is requesting an increase in funding from local sources. Nearly all Minnesota school districts rely on operating levies, approved by local voters, to support general operating expenses.
If Question 1 is approved by voters, funds would be used to support classroom instruction and school operations. Additional revenue would help protect recent program enhancements in STEM (Science, Technology, Engineering, Mathematics), World Language and college and career readiness programs. It would also be used to maintain reasonable class sizes and a variety of course offerings to keep us competitive with the best public and private schools.
Without the increase in funding, the district could face an operating deficit of $900,000 by the 2017-18 school year. Eighty-one cents of every General Fund dollar is directed to the classroom. That means reductions would most likely include teacher layoffs and fewer course choices for secondary students.
Administration has trimmed ongoing operating costs by gaining efficiencies in transportation and utility costs, renegotiating all service contracts and eliminating or consolidating noninstructional positions. This has helped us avoid large-scale budget reductions for more than 10 years. That has not been the case for nearly every other metro-area school district.
The district does maintain a balance in the General Fund and has relied on reserves to maintain programs and services when state aid has fallen short. However, instructional expenses are of a continuing nature and could deplete this balance in less than a year. It would be like constantly taking money from your savings account for everyday purchases. The fund balance is there for emergencies and cash-flow purposes. A sufficient fund balance is also important for maintaining an excellent bond rating.
Instructional and school operation expenses are paid through the General Fund, the district’s main operating budget. The savings from refinancing three sets of bonds benefitted the Debt Service Fund and cannot be used to fund everyday operation expenses.
School districts must ask voters for permission to fund construction of a new facility or to extensively renovate an existing facility by selling bonds. These type of projects must by reviewed and approved by the Minnesota Department of Education before the school district can even present it to voters. MDE stated: “Based upon the department’s analysis of the school district’s required documentation and other pertinent information from sources of the Minnesota Department of Education, the Commissioner of Education provides a positive review and comment.”
It is important to note that the district has not asked residents to vote on new construction since 1998, when the new middle school was approved.
If Question 2 is approved by voters, funds would be used to construct an 80,000-square-foot activities center attached to Orono High School.
The request was first presented to voters in 1995. When it did not pass, an Indoor Activities Center took a back seat to other facility issues, most notably the need for a new middle school and to renovate existing schools to current safety and efficiency standards. With those needs now met, the School Board’s Finance and Facilities Committee has been studying future facility needs.
No. The center would benefit all activities. The five multipurpose courts (or the additional space) could be used for a number of sports, including baseball, golf, soccer, softball, tennis and volleyball. The fitness center and indoor track would benefit conditioning activities for all sports. The center would also be available for community use.
No, this need is based on the incredible involvement of our students and our lack of space to accommodate that interest. An impressive 85 percent of the students at Orono High School participate in one or more activities. In the Wright County Conference, Orono has one of the largest student enrollments, but the fewest number of full-size gymnasiums. The popular youth sports leagues that serve our communities compete for space as well. The result is that participation is limited and/or students are practicing late into the evening, compromising family meals and time for homework. The Indoor Activities Center would accommodate these levels of participation.
In addition, the walking track and fitness center would be available to community members who purchase memberships. Senior adults who live in the district would receive free memberships. Space in the center would also be available to rent for birthday parties and other types of events. None of the six cities served by Orono Schools offer residents a community center such as those located in Chanhassen, Maple Grove and Plymouth.
Plans call for relocating Community Education offices from The Link to the Indoor Activities Center. Staff would control access to the center. The design itself separates community members and students, as well as prohibits access to Orono High School.
A new swimming pool is not part of this bond request. Over the past 12 years, the school district has invested more than $1 million in maintaining and improving the current swimming pool. Additional improvements are planned over the next 10 years.
The School Board Finance and Facilities Committee did research Fine Arts needs and included expanded facilities as part of the district’s long-range plan. The district deeply values the Fine Arts, and is working with community partners to address those needs in a timely fashion.
The proposed center is larger than many others. When you remove costs associated with parking, relocating fields and other improvements, our average cost per square foot is about $5 less.
By law, operating levy votes are for a maximum of 10 years. The Indoor Activities Center would be financed over 16 years. An additional reason is that the savings from refinancing bonds can be used to offset the cost of the Indoor Activities Center. The $6.2 million in savings keeps the increase to about $4 per month on a $400,000 home. By law, we are not able to use these savings for instructional purposes.