State Shutdown Would Impact Stillwater Area Schools in a Number of Ways

Assistant Superintendent Ray Queener on Thursday night gave District 834 School Board members a grim look at the impacts a possible government shutdown would have on Stillwater schools.

The Stillwater Area School District could be impacted in a myriad of ways if the government shuts down July 1, starting with the loss of state-aid.

The bulk of the district’s funding may not flow to the school districts if the state shuts down, Queener told the board. The way school districts access stimulus or federal dollars requires the district to spend first and then submit reimbursement to the state—and if the state’s not operating, there will be an impact.

The school district will be “solvent” until Aug. 19—and will not have to borrow money—if the district doesn’t receive payments from the state in July and August, Queener said. But at that point there would be a $1.1 million shortfall that would require a line of credit.

If the district doesn’t receive state-aid by Sept. 13, there would be a $5.2 million shortfall, he continued, that would have to be bridged with another line of credit.

“That is the extent of what we have to cover,” Queener said.

The district is set to be paid $19.1 million in state-aid by Sept. 15, but if that doesn’t happen, Queener said, “We’ve got some real issues.”

“We would not be able to make payroll,” he said. “As an organization we would not be able to move forward because we don’t have the authority to borrow any more.”

Does that mean the schools would have to be shut down? School Board Chair George Dierberger asked.

“We will have to have that conversation,” Queener replied. “We can’t borrow our way out of no state aid.”

If a shutdown were to last through July, it would really have an impact on the start of the school year, Queener said. As an organization, the board will have to make a decision about possibly suspending or shutting down operations until receiving state-aid.

“If the state shuts down for July, there will be several school districts following suit,” Queener said. “We’re not quite to that point, but if we go into August with a shutdown we will have to have plans in place for what we are going to do.”

Cash flow, or a lack thereof, isn’t the only impact a shutdown would have on the school district.

If state offices shutdown, building permits would not be issued for the Early Childhood Learning Center—impacting the start date for the project, Queener said.

Queener said he isn’t sure if the Minnesota Department of Education website will be active if the state shuts down, which in itself, would impact the district in a number of ways.

Summer is a busy time for schools to file data reports, and in preparation of the 2012-2013 budget, make levy submissions to the Department of Education for review, Queener said. A shutdown could also mean teacher applications and renewals aren’t processed, which would have an impact on licensing teachers.

“If that website is not available, we may not have access to that,” Queener said.

Have these concerns been shared with local legislators? School Board Member Tom Lehmann asked.

“This is not unknown,” Queener replied. “This is a very common understanding.”