WILLMAR -- With less than two months to go in the fiscal year, the Willmar School District is still waiting for more than $1.5 million in aid promised by the state.
And that doesn't include the $8 million-plus that Gov. Tim Pawlenty order-ed held back until after July 1.
Pam Harrington, director of business and finance for the Willmar School District, discussed the district's financial situation at the School Board meeting this week. So far, the district has been able to maintain a positive cash flow, despite the state's payment delays to public schools, she said.
The district was to receive a total of $2.5 million in federal economic stimulus funding this year but is still waiting for $800,000 of it. The money was expected in March and then in April, but it hasn't arrived yet, she said.
When Minnesota Department of Education representatives are asked about the money, the answer -- "maybe in a few weeks" -- has been the same for some time, Harrington said.
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The state also delayed regular aid payments for some districts this spring. For Willmar, the delayed payments total $939,000. The delay is allowed by statute, but state law requires that the money be sent to schools before the end of the fiscal year on June 30.
School districts are scheduled to receive that money on May 31, but Harrington said in a telephone interview Thursday that school business officials have speculated that the payments could be delayed again.
The delayed payments are still listed as receivables on the school district's balance sheets, Harrington said. "We still recognize 100 percent of the revenue in the year we should get," but cash flow can be a problem while waiting for the money to arrive.
So far Willmar has not had to borrow money to maintain cash flow, but many districts around the state have borrowed.
Pawlenty's unallotment orders last summer included withholding 27 percent of this year's school aid payments until the next fiscal year and sending 73 percent in this year.
The Minnesota Supreme Court said a week ago that the unallotments were illegal. That left the governor and the Legislature with a limited amount of time to address the budget deficit made even larger by the court's ruling. Under the state constitution, Sunday is the last day they have to adopt legislation.
Harrington and Superintendent Jerry Kjergaard said at the board meeting that they expect the payment delays to be in place for at least several years, although the percentages could change.
In the past, the state would withhold 10 percent of state aid, with that last payment based on year-end enrollment numbers. "They didn't want to have to recover from districts," Harrington said, and that worked out well.
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But at times of budget crises, the percentages have been higher. Schools have a 20 percent payment delay for a time in the past.
This year's 27 percent is the largest in recent memory, but it could be larger. The first year of such an arrangement is the one where the state actually saves money. Next year, schools will be owed the remaining aid from this year as well as aid for next year.
Harrington said the state's bill for next year could be lower if the state shifts a larger percentage into the following year.
The shift of obligations from one year to the next could go on for years, Harrington said.
Much state aid is calculated using enrollment figures.
Enrollment in Willmar was at 4,047 at the end of March, down nearly 200 students from the beginning of the school year, Harrington said.
A number of the families report that they are moving out of the state or the country, which is probably a response to the current economy, she said.
Willmar generally sees enrollment decline from the beginning to the end of a school year, and then starts out higher again in the fall.
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That pattern holds true this year, too, she said, but the district is still a bit ahead of its enrollment projections.
Harrington said she hopes the district can finish the year at or above its enrollment projection.
