BONOFF'S EDUCATION RECORD QUESTIONED

I just received this email from a dedicated reader of Minnesota Democrats Exposed.

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From: XXXXXXXXXXXXXXXXXXXXXXXXXXXX
Sent: Friday, November 18, 2005 7:04 PM
To: minnesotademocratsexposed@hotmail.com
Subject: FW: Hopkins Schools S.O.D.

MDE,
I received this email.

It has big implications for SD43 DFL Candidate Terri Bonoff, who has been touting her impact on Hopkins Education [.]

The Superintendent of the district (Michael Kremer) who had the message sent out on his behalf seconded Terri's nomination at the SD43 DFL BPOU convention and her campaign manager is the treasuer of the board!

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Below is an email I just received stating that Hopkins Schools were operating at Statutory Operating Deficit (SOD) for 2004-2005. This is huge. Explains why all three School Board incumbents did not run this year.

It's also potentially huge considering Terri Bonoff and Barb Klass have been Co-Chairs of the LAC over the past five years or so. Furthermore, Barb Klass has also been a current school board member (has been for many years) and as you also know, Barb Klass is also Terri's campaign chair.

----- Original Message -----
From:
To: LAC Steering Comm Group
Sent: Friday, November 18, 2005 07:02
Subject: 2004-05 Audit
Dear Members of the LAC Steering Committee (this message is from Superintendent Michael Kremer),

Recently, we learned that Hopkins School District 270 is in statutory operating debt (SOD), which is based on the preliminary findings of the fiscal year 2005 (2004-05 school year) audit. This audit is still being completed and will be presented to the Hopkins School Board, Thursday, Dec. 15. We discussed this situation with the School Board publicly, Thursday, Nov. 17, and wanted to share it will all of you as soon as possible also.

The preliminary audit findings indicate that the District ended fiscal year 2005 with a negative unreserved general fund balance of -$4,329,464, which is a –5.4 percent of operating expenses. Under Minnesota law, a school district enters statutory operating debt when it spends in excess of a –2.5 percent unreserved general fund balance.

At no time is statutory operating debt acceptable. As your superintendent, I accept full responsibility for this situation, and want to assure you that over the next weeks we will be aggressively working to develop a plan to correct it.

As you know, the Hopkins School District has had six consecutive years of difficult budget decisions, resulting in more than $18.2 million worth of reductions. The Citizens Financial Advisory Committee (CFAC) and School Board have recommended sitting on the edge of statutory debt since 1999. For the 2004-05 school year, the District intentionally adopted an unbalanced budget fully expecting to end the fiscal year with a negative fund balance. This was done to maintain the District's educational program as much as possible in the wake of no additional funding from the state, and being prevented from seeking additional operating levy authority from residents. There is risk involved with having no fund balance, but the District intentionally chose to spend money on programs and services for kids. However, that negative fund balance slipped further than expected, and now the situation needs to be corrected.

Due to multiple employee turnover in the District's Business Office, the increasing negative fund balance was not detected until this year’s audit of the 2004–05 budget. Had we known about it earlier, we would have done something about it earlier.

Some of the corrective work has already started with a series of recommendations from the District's Citizens Financial Advisory Committee. This volunteer group annually reviews the District's financial picture, and recommends expense limits to the Hopkins School Board. This year's recommendations include:
* Suspending the School Board's policy of maintaining an unreserved general fund balance of between 3 percent and 5 percent of operating expenditures in order to maintain the quality of the District's programs and services, and establishing a goal to work within current policy parameters within five years.
* Being clear of statutory operating debt status within three years.
* Completing annual audits by October 1st of each year.
* Creating and implementing an improved financial monitoring system, allowing budget managers to review revenue and expenditure data in a just-in-time manner. This includes generating reports for all budget managers on a monthly basis, and negotiating appropriate budget adjustments.
* Providing comprehensive fund balance reports to the Board on a monthly basis, and updating the Citizens Financial Advisory Committee on a quarterly basis.
* Suspending the Program-Based Budgeting system for fiscal year 2007 (covering the 2006-07 school year), and directing the superintendent to work with staff to prepare a draft of a budget to deliver to the full Board in late December, and to share with the community for review and comment thereafter.
* Restructuring the Business Office to meet current District needs.
* Continuing to seek alternative non-traditional revenue flows, creating new positive revenue streams into the District, not reducing expenditures.

CFAC members have already looked at multi-year budget simulations designed to gradually bring the District out of SOD in three years. The District's plan to remove it from SOD must be submitted to the Minnesota Department of Education for approval before Jan. 31, 2006.

After Thanksgiving, I will begin developing a draft 2006-07 budget with the District's budget managers. This draft budget will be presented to the School Board on Dec. 15. It then will be presented to District staff, parents, and other community members in a series of meetings to be conducted during January. Information about this budget draft will be available on the District's Web site, and in a news release sent to local media. The District also will establish a budget comment voicemail line and email address that people can use to provide their feedback as well.

Throughout the budget considerations and decision-making, the District will strive to maintain its educational programs and services. Our top priority will be to minimize the impact of any additional budget adjustments on classrooms and our education programs. We remain focused on delivering the best, top quality, education program. This is our commitment to our students and their parents, our staff, and our community.

If you have any questions, please contact your building principal. I will be doing everything humanly possible to keep principals up-to-date with the best information available. Please remember, that the budget profile aligned with SOD is 2004-05. We have been blessed with good news since that time such as a successful referendum, new state aid, and Q-Comp, and our budget picture heading toward 2006-07 has improved considerably. So please don’t hesitate to ask questions, and know that we will provide you with updated information when it becomes available.

Thank you.

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