Lakota board reviews draft five‑year forecast, discusses Sub. House Bill 96 and master facilities bond planning

The Lakota Board of Education on April 28 reviewed a draft five‑year financial forecast and discussed how changes in state legislation and the district’s master facilities plan could affect future tax levies and bond ratings.

Treasurer Adam Zink said the forecast is a planning tool that shows three years of historical actuals and five years of estimates. “We do the 5 year forecast because it shows 3 years of historical actual numbers, and then it also shows 5 years of our estimates,” Zink told the board as he walked through revenue and expense variances.

The forecast includes recent collections and unexpected variances. Zink reported the district’s first‑half property tax settlement for tax year 2024 (collected in 2025) at about $66,700,000 and said public utility payments came in roughly $390,000 less than anticipated. He also flagged a large increase in retirements: initial November estimates assumed about two dozen retirees, but current counts affecting payroll and severance assumptions have risen to about 72 and “could be potentially a lot more.”

Why it matters: board members tied the forecast to two near‑term priorities. First, Sub. House Bill 96 — which the board said recently moved from an earlier House Bill 96 draft into a substitute version — would limit district cash balances with a new 30% cap (up from a 25% proposal). Zink said the 30% cap equates to roughly 110 days of cash on hand, compared with about 90 days under prior scenarios, and that the bill would give the county budget commission new authority to order reductions if districts exceed the cap. The draft also would change membership of that commission, replacing the county prosecutor with the president of the county commissioners, the treasurer said.

Second, the board is advancing master facilities planning and a potential bond measure. Zink said the current draft forecast shows a placeholder levy of about 3.2 mills in fiscal 2029 designed to keep the district above its 90‑day cash policy while the facilities plan and related operational savings are refined. “When we’re looking at the master facilities project, we need to be very cognizant of the impact it could have on fiscal ’29,” he said.

Board members noted possible impacts on borrowing costs. One trustee asked whether the forecasted changes and shifting reserves could affect Lakota’s bond ratings; Zink confirmed a ratings downgrade would likely raise interest costs if the district’s fiscal cushion weakened. The board said bond counsel Andy Brosart of Bradley Payne Advisors will attend facilities meetings to discuss millage structure and options.

Board discussion emphasized planning and communication. Zink asked the board to consider a reserves plan to smooth peaks and valleys and to minimize year‑to‑year swings in revenue and expense. He said the district will continue to refine assumptions (including a six percent pharmaceutical cost growth assumption for later years) and noted the forecast shown to the board captures general fund staff only; amounts paid from other funds will not be reflected in this general fund forecast.

Next steps: the board will revisit the forecast at a May 6 work session and consider final approval at the May 12 regular meeting. Facilities subcommittees and public engagement sessions are scheduled to continue through late May and the summer as the district refines cost, timing and community outreach for any bond request.

Discussion versus decision: the session presented information and set planning directions; the board did not adopt a new levy or bond at the April 28 meeting.