Delaying state aid payments to public schools will prevent the State of Minnesota from having a cash shortage. However, it will be costly for school districts.
According to Ehlers, Sibley East’s financial advisor, the State could delay payments totaling $1,338,429 to Sibley East from March 15 to May 30.
Projected payments before the reduction, to May 30, totaled $2,359,816.
How can the State delay aid payments?
Ehlers reports that the delay would be based on a little-known statute that has existed since 1986 but has never been implemented. This statute allows the State to delay school aid payments if the State is expecting its own cash flow shortfall. The maximum amount of payments that can be delayed for each district is determined by a formula that takes into account the fund balances and cash balances in the district’s operating funds by the end of the previous fiscal year.
If a district’s total operating fund balance was less than $350 per pupil unit, the State is not permitted to delay the aid payments under the statute. According to Ehlers, Sibley East has a fund balance per resident pupil unit of $1,319.
The delay in aid payments would put Sibley East in its own cash flow dilemma, according to Superintendent Stephen Jones. He predicted that the school district will need to borrow funds to pay bills, incurring interest expenses.
At this time, the aid payment is delayed and not cut. The state statute mandates that the funds be paid back to schools in June.
The delay in aid payments to schools is seen as a effort to eliminate the need for the state to borrow money from banks or large investors that could hurt the state’s credit rating.
In other business, the Sibley East School Board:
• Authorized Superintendent Jones to continue negotiations with Giant Campus, an on-line education provider located in the State of Washington. Giant Campus is looking for a partner K-12 district to launch its online program in the state.
• Approved a resolution directing the Superintendent and administration to plan and make recommendations for adjustments in curriculum, programs and staffing for the 2010-2011 school year.
• Hired Larry Rewerts as a high school social studies teacher for the remainder of the school year. Rewerts had submitted his resignation for retirement purposes last year, which would have taken effect in December. However, a teacher with a master’s degree is required to teach some of the courses Rewerts is teaching in order for the students to receive high school and college credit simultaneously.
• Approved the 2009-2011 contract agreement with the bus drivers. The bus drivers will receive a 1.5% increase for each of two years and will receive one additional personal day after completing five years of service.
• Tabled until Feb. 16 policy 413, which is about hiring substitute teachers. Jones asked that the policy be tabled in order to research what area school districts are paying substitute teachers.
• Approved seven lane changes for faculty members. Heidi Carpenter, Ann Eckberg, Amanda Feterl, Stephanie Schultz, and Sara Utendorfer have completed Master’s degrees. Krysta Hanson and Stephanie Spong moved up to the BA + 10 level.
• Accepted donations of $2,100 from the Arlington Baseball Association for field improvements and $450 from Anne Karl for FFA summer camps.