BEMIDJI -- The Bemidji Area Schools Board of Education met -- virtually -- Monday night where board members heard a presentation on the upcoming 2020 operating referendum. The board will make a decision on whether to put the operating levy to a vote in August, and it would then appear on the ballot in November.

Superintendent Tim Lutz voiced his concerns about the district’s current financial situation and argued for why the referendum is crucial.

“Our goal is to be able to build on our successes,” he said. “A successful school system leads to a successful future for our community. The two go hand in hand.”

Lutz explained that funding for education comes from three sources -- state aid, federal aid and local funding.

Bemidji Area Schools currently are reliant on local funding for 12-13 % of operating costs. Federal funding covers around 6% and state aid covers the rest, but about 25% is designated for required purposes.

Lutz said that when inflation is factored in, state aid has effectively decreased over the last 14 years, because there has not been an increase of over 2% since 2007.

He also detailed specific challenges rural schools faced, which he said are not addressed adequately by state funding.

Currently, there is a gap between expenditures and revenue, Lutz said, and this is projected to widen significantly in future years. This gap must be paid out of the district’s reserve funds, he explained.

“If your expenditures outweigh your income, you are going to be in the red,” Lutz said. “Unless we can figure out something in our financial situation, it is simply going to get worse.”

The state will step in to require “drastic action” if the reserve were to be depleted and the district were to go into debt, Lutz explained.

COVID-19 has made the situation worse, he added.

He detailed a four-step plan to fix the problem: 1. Work with legislators to increase state funding, 2. Keep managing spending, 3. Keep and attract students, 4. Increase local operating levy.

There are both school board and voter-approved levies -- currently, the district has a $724/pupil board-approved levy and a $180/pupil voter-approved levy, $904 in total.

The Bemidji Referendum Authority limit is capped at $1,779.50 per pupil.

Lutz said the district hopes to repeal the $180 levy and replace it with a $460 levy, which is a $280 net increase. This would reduce the projected deficit by 72%, he said.

The board will make a final decision on whether to put the operating levy to a vote in August, it would appear on the ballot in November.

This presentation will be shared with various community members and groups over the upcoming months.

Activities update

The board heard an annual activity report from BHS Activities Director Troy Hendricks, who described the current levels of activity enrollment in the high school and brought up the possibility of increasing activity fees.

No action was taken on the activity fees, but this would need to be decided prior to the start of the year.

It is not yet certain how activities will look in the fall. Hendricks mentioned that since spring activity sign-up began the day before schools were closed, that enrollment was smaller than usual. He also described how coaches and activity advisors still attempted to provide enjoyment and a sense of normalcy this spring for students.

Also during the meeting:

  • The board adopted the 2020-21 budget and projection. Currently, the projected general fund revenue for 2020-21 is $67,929,740 and the expenditures are $68,962,496, which leaves a deficit of $1,032,756.

  • The board passed the updated code of student conduct.

  • The board welcomed new student board representative, Abigail Elquist.

  • The board passed updated student handbooks for schools across the district.

Monday night’s meeting can be viewed online.