With fund balance dropping, Zumbrota-Mazeppa district borrows

/ 21 February 2012 / jennifer

Sandy Hadler, Rochester Post-Bulletin, February 21, 2012 –

MAZEPPA — Despite aggressive budget cuts in recent years, the Zumbrota-Mazeppa school district will have to borrow $1.3 million to bolster a fund balance that’s dropped below $200,000.

The district, which serves around 1,100 students in grades K-12, traditionally kept that fund balance around $800,000 as a safety net, which was advised by its auditors.

Tony Simons, Z-M’s first-year superintendent, said cash flow is an issue, and so the district felt it needed to borrow.

“Just about every other area school district has borrowed already, except us,” Simons said. “We can’t skirt by this one. The state shift in funding really hurt us. The extra cash flow would have kept us from borrowing.

Simons said Z-M is the “poster child” for what has happened to many school districts after the state Legislature delayed 40 percent of state aid payments to the districts to close a $5 billion projected state budget gap.

Even if the district had that money, the fund balance would be lower than it should be, Simons said. Other factors such as an enrollment decline and an increase in the costs have also cut into the district’s fund balance.

“We need to streamline the budget, and a lot of that is salary and benefits,” he said.

In 2009 a $250 per pupil levy override was approved in a referendum. Looking back, Simons said that wasn’t enough. But he doesn’t want to do another referendum this year.

Simons has been evaluating the school district’s budget since he came on board to prepare for some deep cuts.

“The last thing we want to do is cut programs or instructors,” he said. “But we will have to look at cutting electives and at trimming our student-teacher ratio. Certain sections may increase without significantly overloading class room size.”

The district will need to get its “financial house in order” so it can keep moving forward, he said.

“Patrons need to know we will do everything we can to be lean and not to affect how we serve their kids,” he said. “But we need to get our arms around this. We will do it. We will turn the ship in the right direction.”

Paul Pagel, representing the teachers union, declined to comment. Plans to hold a meet-and-confer session are under way. Pagel said he will comment after the Feb. 27 school board meeting, when teachers know what direction the school district will take.

Sandy Hadler is a freelance writer in Zumbrota.

http://www.postbulletin.com/news/stories/display.php?id=1487569