The administration at Lakeland Union High School is recommending the school board take a conservative approach to renovating the outdoor sports complex in order to protect the district’s fund balance from being drawn down to a critical level.
The board’s Finance Committee met Wednesday but lacking a quorum, could only review the recommendation from Administrator/Principal Jim Bouche and Director of Business Services Greg Kopp, with no action taken on the financial plan. Only Barry Seidel and Barb Peck of the 5-member committee were physically present. Ed Schaub appeared telephonically, but was unable to vote. The school board will take up the recommendation at its Jan. 23 meeting.
The district’s fund balance was $8 million as of June 30 of last year, a drop of over $3 million from its previous high of $11.6 million in 2012, said Kopp. The board has tapped it the past couple of years for interior renovations, including the auditorium. The district uses fund balance to meet payroll and other bills until property tax revenue and other aids roll in. The district has other financial obligations where the fund balance might be needed, Kopp said. They include unfunded health retirement benefits of $3.5 million (although an amount is currently budgeted each year to offset it), possible future operating deficits, maybe a pilot school, and other facility upgrades. Nor did Kopp see an easy path to grow fund balance back to its high watermark if they draw it down significantly for a more ambitious renovation of the outdoor sports complex. “It’s going to be much more difficult to do moving forward than it was over the last 10 to 15 years,” he said. The district was able to use $400,000 that it didn’t have to pay into a teacher retirement fund to grow fund balance. That no longer is happening. Also, the district tax levy dropped $1.2 million over the last three years due to lower student enrollment, and impact aid from state and federal sources has dropped hundreds of thousands of dollars.
Under the administration’s recommendation, the district would pursue the cheapest option that calls for replacing the locker rooms for $700,000 and stadium lighting for $250,000. Demolition, contingency and design service costs would boost the total figure to just over $1 million. The district would use Act 32 funding already approved to cover $950,000 of the cost of the locker rooms and stadium lighting; the remaining $133,655 would come from fund balance. (The board has already committed to spend $750,000 toward whatever outdoor renovations are selected.) The district would also develop a fund-raising campaign – possibly hiring a professional fund-raising firm – to cover costs of other desired outdoor renovations. The administration says that route would give the board one year to decide on further renovations, and also to consider asking district voters via a referendum to cover any deficit. The next higher level of renovations, Option 2, would add $700,000 for synthetic turf for the playing field and about $143,000 for realigning the field events. The district apparently has a firm, but verbal, commitment from one citizen to cover $500,000, and with other private donations, maybe the entire cost of the turf. In that scenario, the district would take $567,713 from fund balance along with $950,000 approved under Act 32 resolution and the private contributions to cover the estimated $2 million cost. In order to have turf installed by next falls sports, the board would have to give its approval by March, said Kopp.
Board member Ed Schaub favors a more robust approach, Option 4, to the outdoor sports complex, which would include new bleachers, press box and stadium structure, among other enhancements. That cost is pegged at $4.23 million. The district would have to draw $2.74 million from fund balance to make that happen. In doing so, Kopp estimates fund balance would drop to $5.3 million.
