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Decline in enrollment and cuts hurt district

This table shows the breakdown of the existing Hastings School District bonds and levies.

With the recent passing of the bond issue for $19.25 million dollars, Hastings School District officials started hearing from residents about the status of levies and bonds already in place in the district. This week, we address those questions and explain the reasons each bond was sought, and the climate surrounding each vote.

History of the bonds and levies

In 2001, the Hastings School District had just built a new high school and renovated the old high school for use as a middle school. The total was about $43.6 million dollars.

In 2003, the district cut teachers, programs and transportation budgets. The School Board also closed one school.

What happened?

Dr. Garry Jensen, acting superintendent of schools in spring of 2003, explained then what was, and still is, happening to school funding across the state.

"About 10 years ago (1993)," Jensen said, "Minnesota began under-funding inflation at a rate of 1 percent. So, in 10 years, that amounted to 10 percent less from the state."

He pointed to other factors.

In 1997, he said, the state quit providing financial support for transportation, meaning school districts in Minnesota had to pick up the cost of busing students.

In 1998, Hastings voters approved a referendum for the new high school and the renovation of the former high school for a middle school. Revenue from the referendum was dedicated to the building and renovation, and did not affect the district's general operating fund.

"It's difficult for people to separate the two," Jensen said in 2003. "But if we didn't build the new high school, we would still have the same problem. In fact, it would be worse because the old middle school (on Vermillion Street) was in need of repairs."

In 2000, enrollment in Hastings began to decline, again meaning less funding. The decline was unexpected. A study by an independent firm in 1995 projected an increase in enrollment.

Then came the attack by terrorists on the World Trade Center in New York City.

In 2001, the rate of inflation and other factors caught up with the district, and the board approved $1.9 million in budget cuts and extra fees (parking/activity fees, event admission, etc.).

In 2002, the district made $1.3 million in cuts - including 17 teaching positions - and eighth-grade global languages.

The cuts in 2003 amounted to $1.7 million and included more teachers.

Jensen felt defeated, particularly when he compared ISD 200 to other metro-area districts.

"We spend $3.5 million less than other schools this size," he said. "We spend $1 million less in capital. We spend $1.5 million less on administrators. We've cut more than $4 million from the budget in the past three years. How do you communicate to people in the community that we have above average schools at below average costs?

"We're out of gas."

Tim Collins became superintendent of Hastings schools in this atmosphere. The district was in statutory operating debt. Voters had turned down a levy in 2001. A survey of voters said there hadn't been enough information about the levy. The cost of the high school was another factor.

A levy request was already in the works for the fall of 2003.

In September 2003, Collins asked voters to revoke the old levy that would expire in 2007. A second question asked for a new levy of about $3.4 million, or about $690 per pupil. The state added a 25 percent "reward" for those districts that voted in referendums, in Hastings' case, $980,000.

In 2004 and 2005, the state "froze" funding for schools, meaning once more, the district would be responsible for the increased costs due to inflation.

In January, 2005, the word "levy" was spoken out loud, not just whispered. The district was still in statutory operating debt. The board cut $1.2 million from its operating budget, mainly by not hiring anew for retiring teachers. The state found lead in the drinking water at the middle school, and the custodians began flushing the water system daily to minimize the lead. Student activity fees were raised.

Collins began talking about the maintenance that hadn't been done on the school buildings in the late 1990s and early 2000s because of the financial problems in the district.

An independent audit showed the district was not spending wastefully.

"Hastings is more frugal than other districts in the seven-county metro area," the auditor said.

In fact, a Hastings couple did some research on their taxes. They found that from 1999 to 2005, their property taxes went like this: The city portion went from $1,289 in 1999 to $1,847 in 2005, an increase of 49 percent. The county portion went from $838 in 1999 to $1,050 in 2005, an increase of 25 percent. The school portion of their taxes went from $1,739 in 1999 to $1,146 in 2005, a reduction of 34 percent.

The School Board reissued (refinanced) the bond for the high school from 2008 and beyond, with a savings to the district of $3 million.

Also in 2005, the district levied $5.32 million for a health and safety project (which doesn't have to be approved by voters). The project included the ventilation system, electrical, ceiling repair and sprinkler systems at John F. Kennedy and Pinecrest elementary schools.

In December 2006, an independent audit firm officially told the board the district was out of statutory operating debt.

In the fall of 2007, the School Board asked the public for more than a $19 million bond for maintenance and reorganization, but were turned down. They asked again in the spring of 2008, this time for $12 million, just for maintenance; voters again said "no."

In the fall of 2009, voters said "yes" to a $19.25 million bond for maintenance and reorganization. According to Collins, the district won't know the interest rate (0 percent to low) or the years it'll be in place until the day of the sale.

"The federal government changes the length of the bonds and the rate on a daily basis," he said. "Originally, they were (over) 14 years, and then when I checked yesterday, they could be spread over 17 years."

The future

The levy passed in 2003 will expire in the 2011-12 school year. It's highly likely the School Board will ask for its renewal. It's possible the board will ask for the renewal of this levy and the one that expires in the 2013-14 school year, combining them into one.

According to district officials, the state continues to cut funding for education.

The bottom line

What each bond or levy means on today's taxes: A house in Hastings was reduced in value from 2009, from $197,400 to $180,000. At $180,000, the total taxes for the city, county, school and other special taxing districts will be $2,100. Of that $2,100, a third of the taxes will go to the School District, $723. There is a note on the statement that says, "Your school district was scheduled to hold a referendum at the November general election. If the referendum was approved by the voters, the school district voter-approved tax for 2010 may be higher than the proposed amount shown on this notice."