LASD deficit spends $1.2 million in three years

To say that things have not been going well for the Langdon Area School District is an understatement. The recent defeat of the request for an increase in the building mill levy is no longer the focus of the board and administration as the school goes into crisis mode to stop their monetary bleeding.

Posted 11/07/2019

By Melissa Anderson

The school board meetings over the last few months have dealt heavily with the board and administration focusing on a budget that is in the red. LASD Superintendent Daren Christianson recently informed the board that the school finished the 2018/2019 school year with a $286,000 deficit. That report, along with the fact that the 2019/2020 school budget had been made and approved at a projected deficit of approximately $300,000, caused the board to immediately convene  subcommittee meetings to attempt to economized spending.

“The district has historically ran a deficit to try and get it down. The state of North Dakota allows a school district to carry over 35 percent of their budget in carry-over monies- money in the bank, basically, if you want to call it that. At one time, the district was in a position where they had excess carry-over money, and they had to spend over and deficit spend in order to get that level down,” Christianson said.

In 2008, the school board dropped the general mill levy from 155 mills to 100 mills for the 2009 school year and then made another drastic cut in 2010 bringing the general mill levy to 60. From there, the school board then began to navigate the funding of the school in such a way that revenue brought in matched as closely as possible to what was needed to spend for that year’s budget. This attempt, however, has been hampered by North Dakota Century Code (NDCC) 57-15-14.2 which says the district could only implement yearly mill increases at 12 percent. What makes things even more difficult is that the district has now maxed out their mill levy (NDCC 15.1-27-04.3) which has been capped at just 70 mills.

What started over a decade ago as an attempt to bring the burgeoning interim fund to within state-mandated levels thanks to a change in century code (NDCC 15.1-27-35.3) has now spiraled into a massive overspending as the school district has gone through upheavals in its administration, business office, and the need to hire additional teaching staff as numbers have exploded in the grade school.

“Getting accurate numbers for carry-overs was difficult,” Christianson explained. “With the change-over in the business department and so forth and with the numbers that were available to us along with the advice we got from our auditor, we felt we were in the right place.”

The reports tell a tale of expectations not being met as the last time the school had a surplus in their budget was in 2016. With a budget of just over $4.9 million, the school brought in a little over $5 million, giving them breathing room with $80,000 left over in their budget. The years spanning 2017 through 2020 years show deficit spending of approximately $600,332.

With the explosion in student population, the district has had to hire several new staff members to meet the educational requirements of the elementary school. These additional salaries and expenses compounded with an overestimation of revenue expected from the state when budgets were being made, caused the school to rely on their only other source of funding.

“One of the reasons we deficit spent, that we weren’t aware of, is that we didn’t get as much money from the state as we anticipated. We added more teachers mid-stream because of our enrollment,” LASD Board President Cindy Stremrick said.

In order to compensate, the district has been using their savings and CDs to cover the bills when the school’s checking account did not have sufficient funds. Business manager Shauna Schneider explained that from 2017 to the 2019, the school has had to withdraw $967,793.52 with 2018 needing nearly $550,000 to float the school alone. Balance sheets show that in 2016, the school had total assets of $1,234,000. Currently, the school has only $266,539 in savings. The overall financial health of the school for the past three years shows financial hemorrhaging of $1.2 million when both the deficit spending is added to the withdrawal from the school’s assets.

As the board realizes how bad things have become for the school financially, they are scrambling along with Christianson, the principals, and staff to determine where they can cut costs – and not just this year but in future years as well.

“Right now, the finance committee is reviewing it all and setting up a plan. All of our committees are getting together to review where we can cut without hurting the educational opportunities currently available to our students,” Stremick said.

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