Redfield Public School Requests General Fund Opt Out


Redfield Public School Requests General Fund Opt Out

By Heather Jordan

Redfield Public School will be asking the patrons of the school district for a general fund opt out. The following information is a history of previous opt outs and why another opt out is asked for.

Why does the Redfield Public School District currently have an opt-out? In South Dakota, 40.25% of school districts have opt outs. Since 2004, RPS has participated in an opt-out to supplement the general fund. In 2004, the opt-out was for $350,000 and increased to $600,000 in 2012 and 2013 because education statewide saw a reduction in state aid. Then, after 2014, some of the state aid funding was replaced, and it was reduced back to $350,000. Since 2015, the school board has taken half ($150,000) of the maximum amount ($350,000).

What is an opt-out? An opt-out means that an additional amount of tax revenue is being asked for by a school district to help fund general fund expenses. Typically, salaries account for 85% to 90% of the expenses paid out of the general fund. Other expenses that can be paid out of the general fund are the purchase or lease of computer hardware and software. The school board looks at an opt-out like an insurance policy. If the school doesn’t need it, we do not request it. Only when there is need are the dollars requested. 

Why not use money from capital outlay or the building project to help in paying expenses for the general fund? Capital outlay includes expenditures that result in the acquisition of fixed assets, maintenance of existing buildings, improvements to sites, construction of buildings, construction of additions to buildings, retrofitting of existing buildings for energy conservation, and purchase of initial and additional equipment and furnishings. Each fund has its purpose and the general fund is a separate fund with separate requirements including most salaries of district personnel.

Is there any kind of oversight on how the school district allocates the money it spends? By law, school districts are required to have an independent audit. The purpose of an audit is to ensure the district is spending monies within the limits of state and federal laws. The Redfield Public School is audited every year.

Where will the new funds be allocated? One hundred percent of the opt-out will go into the general fund to support teacher salaries and student programs. For example, pre-kindergarten receives no state funding. Previously, Little Lambs filled a community need, but for the last two years the school has provided this service.

If the opt out goes to a vote and fails, what will the school district do? The district will have to make cuts annually to reduce budgetary demands.

What is the process to propose an opt-out? Opting out requires a two-thirds vote of the school board on or before July 15th. The decision to opt out must be published within ten days of the school board vote. That decision may be referred for a vote upon a petition signed by at least five percent of the registered voters in the taxing district and filed with the school board within twenty days of the publication. The public vote must be held on or before October 1st.

Why does the school have to be in an opt-out when they are building a new school? School funding can be very confusing. The school building project is paid out of the capital outlay fund, capital outlay certificates and capital projects fund. Funding is generated based on valuations for the district. Salaries, benefits, utilities, insurance, and computer software are paid for out of the general fund. The money for the general fund is based on the new funding formula for teacher salaries. The Redfield Public School has had an opt-out since 2004 and has not taken the maximum amount the last four years. In fact the request has been less than half ($150,000) of the maximum ($350,000) it could have requested. In South Dakota, 40.25% of school districts have opt outs.

What will be the requested amount of the opt-out and how long will it run? The school board is requesting to keep the amount of $350,000 for five years. The hope is to not have to request the entire amount (like in previous years) and only request what is absolutely necessary.

What would the additional tax levy have been if the entire $350,000 had been taken in 2017 - 2018?

    • Ag Land $0.375/$1,000
    • Owner Occupied $0.839/$1,000
    • Other $1.736/$1,000

But, since the school board felt the need was $150,000, the tax levy was:

    • Ag Land $0.161
    • Owner Occupied $0.36
    • Other $0.745

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