The Grand Meadow Independent School District has done something in one year that other school districts have taken five years to do: escape Statutory Operating Debt status.

The state has lifted the SOD ignominy from the Grand Meadow district in record time for a rural school district.

Superintendent of schools Joseph Brown Sr. is a) happy, b) relieved, c) grateful.

Answer: all of the above.

“I want to personally thank the Grand Meadow school board, our administrative team, and our teachers and support staff for successfully balancing the 2007-2008 budget and for making the tough decisions to get us out of Statutory Operating Debt in just one year,” the superintendent said.

Brown has been the Grand Meadow school district’s superintendent for four years. In three of those years, the district enjoyed a balanced budget.

That was not to be in the 2006-07 school year, but that is changing.

“Last year, our school district spent $271,295 less than we did in 2006-2007,” Brown said. “At the end of the 2007 school year, we had a deficit of $167,781. At the end of the 2008 school year, we have a cash reserve of $17,306.”

The district accomplished the remarkable financial turnaround thusly, according to Brown, who listed eight reasons how that was done:

— Increased student enrollment by 20.

— Increased school lunch and milk prices.

— Froze administrative salaries.

— Froze teacher and support staff salaries.

— Reduced staff development seminars.

— Reduced the amount of school supplies.

— Reduced the number for field trips.

— Experienced a reduction in bus repairs.

— Experienced a reduction in curriculum purchases.

— Experienced a reduction in Health and Safety expenditures.

— Shared additional teachers with other school districts.

The plan worked, according to the superintendent, who said the district has another plan in motion to ensure the financial stability continue this year.

“Our school board and administrative team balanced our budget during the 2005-2006 and 2007-2008 school years,” he said. “We will balance our budget this year due to the following actions: Increase student enrollment by five; Cut our budget by $300,000 and eliminate 11 jobs; and receive a two percent increase in state funding.”

But there are worries about how the state will fund public school education.

“As we project the future, I am genuinely concerned about the state deficit that is estimated to be $2-$4 billion dollars,” he admitted. “I do not expect any increase in state aid to schools for at least two years.”

“Cities and counties will probably experience a reduction in local government aid,” Brown predicted.

How will that impact the school district?

“Grand Meadow ISD 495 will need an additional $110,000 in 09-10 if we only experience a 3 percent increase in our operating costs,” he said. “As we all know, food, fuel, utilities, and health care costs have each increased more than 3 percent this year.”

“We are fortunate that the voters approved an increase in our operating levy that will generate an additional $139,000 next school year,” he said. “This will barely cover our anticipated inflationary increases of 3 percent.”

“The reductions we made to our budget this year will probably need to be permanent for at least two more years until the national and state economies recover from the current recession,” he said.

The feelings of happiness, relief and gratitude quickly are overcome by the reality of rural school district finances.

“Our unreserved/undesignated balance or cash reserve of $17,306 is only enough revenue to keep our school district open for six hours,” Brown said. “According to our auditor, our cash reserve should be at least one month of operating expenses or $300,000.”

“However, it is recommended that small school districts have two months of operating expenses or $600,000 in cash reserve,” he explained. “It is estimated that it will take us nine more years to build up an adequate cash reserve.”

“Our school board and administrative team are committed to achieve this goal,” he added.

Brown: Stop starving schools

Soon, local units of government will hold Truth In Taxation hearings to discuss with taxpayers their 2009 budgets and property tax needs.

Local property taxes make up 10.2 percent of the district’s general fund budget, according to Brown. “We receive 9.5 percent from the federal government; 9.8 percent from other sources and 70.5 percent from the state of Minnesota,” he said.

Eighty percent of the real estate property taxes collected in Mower County go to the county, 14 percent go to townships and six percent to school districts (The remainder goes to various taking entities, such as housing and redevelopment authorities).

Without an increase in state funding, Brown said all school districts in Minnesota will suffer during the near-recession economy.

His solution? “We need to step back and ask ourselves ‘What kind of future do we want?’”

The superintendent said the state of Minnesota has “underfunded education for the last 10 years.”

The results: High school dropout rates increase as well as crime.

“We need to stop starving our schools,” Brown said.

According to the superintendent, in the same period that state funding to education has declined, more county jails and prisons have been built.

“Now is the time to start funding education,” he said. “Stop talking and start doing.”

Brown served in the Iowa Senate for eight years before becoming an educator.

“I am available every Saturday from 8 a.m. to noon to answer questions about our school and our budget.”

Brown is also a realist: Staying out of debt, reinstating programs and filling positions won’t come easy in an increasingly weak economy.

“That’s totally dependent upon what the Minnesota Legislature and Governor Tim Pawlenty do,” he said.