OACCT Board of Directors Endorse School's Operating Levy

The OACCT Board of Directors is supporting the passage of the School District’s operating levy this fall.

A recent OACCT member survey, initiated by the OACCT Public Policy committee (chaired by Dr. Mike Peterson-McGregor Chiropractic), indicated support of Owatonna schools and support of the passage of the operating levy.

Reasoning behind this support stems from a great need for high quality preK-12 education in our community, focused on developing our future workforce.  Also, quality schools play into economic development and business growth of the area.

Additional rationale for this support was the fact that the additional $1.8 million requested will be used for financial stability and reaching learning and academic goals. If approved, the levy will be renewed for an additional seven years.  An additional reason for support includes the current Owatonna Public Schools operating levy of $3.9 million will expire in 2016 and hasn't been adjusted for inflation and is losing $1 million per year in purchasing power.

•Financial Status:
--The district’s current underlying rating, as issued by Moody’s Investors in April 2013 is Aa3 and is Moody’s upper 90th percentile of all school districts in MN.
--In the fall of 2012, the district refunded its existing debt of $8,690,000.  By refunding this debt at a lower interest rate local property owners will experience a savings of  $568,274 over the next four years.  The expense related to interest payments during this same period will be $237,975. If the district’s credit rating decreased by one notch, expense related to interest would be an additional $32,000.  A decrease of two notches in the credit rating would increase interest cost by $70,000.
--The state legislature has an additional $400,000 of funds to award the Owatonna Public School District if the levy passes or will be given to another district if the levy fails

• The Cost of Unfunded Mandates:
--The federal dollars come into the district in the form of Title VI – B.  Depending on the size of the district, and the year, these federal dollars could account for up to 50%  of the district’s total for all traditional federal aids and grants.  For a district like Owatonna, these numbers would be approximately $1.0 million and $3.0 million respectively.
--Around 1980 when IDEA became law, the federal government indicated it would fund 40% of all the costs related to the implementation of IDEA.  Today, that support is  actually about 19 percent.

• In 2004, the total levy (including bonded debt, operating levy, community ed, etc.) the board authorized that year was $7.536 million. The total levy the School Board will preliminarily authorize on will be $7.529 million--less than 9 years ago.

“The upcoming school levy is important to our school district. The cost of compliance with the unfunded and underfunded mandates from both the state and the federal governments create a tremendous hardship on our district. Combine that with the ever-increasing importance that quality public education plays in economic development and this becomes an issue we cannot afford to ignore.” Bill Owens, United Prairie Bank/OACCT Public Policy Committee