Prior Lake-Savage Area School Board approves levy, budget increases

Prior Lake American

The Prior Lake-Savage Area School Board certified a small levy increase on Monday, but most homeowners won’t see an increase in the school portion of their property taxes because of a growing tax base of more residents and development.

The board certified a levy increase of almost 1.8 percent, bringing the total raised to almost $33.4 million spread among the district’s property taxpayers. Unlike city or county levies, school district levies are set by a state formula based on number of enrolled students.

In September, the board approved a preliminary tax levy increase of 1.6 percent, or $33.3 million. In 2017, the levy alone was $32.8 million. However, a $109.3 million referendum approved by voters in November 2017 led to a levy increase.

At the meeting in September, Business Services Executive Director Julie Cink said most homeowners won’t see an increase in the school portion of property taxes due to the city’s growth.

According to a presentation to the board, net tax capacity increased 13.2 percent over the previous year.

“The majority of homeowners will see a decrease in the school levy,” Cink said at the meeting in September. “As our district grows and that adjusted net tax capacity increases, that means more properties our levy can be spread across.”

No residents spoke regarding the levy.

The board also approved a final 2018-19 budget of around $99 million. The fiscal year will end in June.

Due to more students enrolled than expected, the district will receive almost $203,000 more from the state. The district had budgeted for a total enrollment of 8,816 students, but the actual enrollment is 8,836.

Cink presented the updated budget to the board in November. It included additional revenues of almost $585,000, but also included additional expenditures of more than $2.4 million — almost $1 million of which coming from carryover funds, or unused money from the previous budget that was moved to the current budget.

More than $316,000 in grant funds from the Association of Metropolitan School Districts will be used for improving safety at the new Bridges Area Learning Center near Twin Oaks Middle School in Prior Lake. The alternative high school building, which is under construction and expected to be complete in fall 2019, was part of a $109.3 million referendum approved in November 2017.

The new spending includes the purchase of a $60,000 school bus, which the Prior Lake-Savage Area School Board approved in October to address complaints from parents regarding overcrowding on the bus routes. The additional expenditures also include $90,000 to install a new sound system at the Prior Lake High School.

More than $42,500 of additional expenditures was used for attendance and boundary changes to address overcrowded classes ahead of the construction of a new elementary school.

The district plans to spend the almost $1 million more in expenditures from the unassigned general fund balance, essentially a reserve pot of money.

The estimated reserve balance for June 2019 is more than $12.3 million, or about 13 percent of the district’s total annual expenditures. The district has a policy to keep the balance at anywhere from 8 to 12 percent.

The district is expected to spend the fund balance down to 10 percent over the next five years, Cink said.