School board approves revised budget; budget adjustments on the horizon because of declining enrollment

Published 9:24 am Tuesday, March 19, 2024

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Concerns about declining enrollment took center stage Monday at the Albert Lea school board meeting as the board approved its revised budget for the year.

Jennifer Walsh, executive director of finance, operations and safety for the district, said the average daily membership for the district was down 127 in all grades from what was projected in June.

She said the current kindergarten class came in significantly lower than what was projected. For many years the district has had about 240 kindergartners, but this year that number dropped to 207, which she said correlates with the declining birthrate in the area.

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She anticipates continuing to see the decline in enrollment, with smaller kindergarten classes compared to the classes of outgoing seniors.

Because of this, it will be incumbent on the district to make adjustments to the budget accordingly moving into the future, on everything from staffing to legacy programs that may not be giving a desired return, always keeping students at the center of all decisions, she said.

Walsh said the plan will be to bring an estimated $1.2 million in budget adjustments to the school board’s May work session and then put those adjustments into the district’s preliminary budget for next year. Adjustments are anticipated across every sector, as the district aims to remain within its $12 million fund balance target.

Superintendent Ron Wagner said during his report ahead of Walsh’s presentation that when staffing stays consistent when there is declining enrollment, the district will see a budget deficit. The district instead needs to make proportional adjustments and refinements, looking for efficiencies when possible. He said there will be difficult decisions that have to be made, choosing “good from good.”

Wagner said the declining enrollment is an issue not just in Albert Lea but statewide.

“What we can control here in Albert Lea is our student experience, and that will be our focus,” he said.

He said it will also be important to continue to make Albert Lea the city of choice and Albert Lea Area Schools the school district of choice.

He emphasized that decisions will need to be made with students at the center, followed then by staff and then the community.

In the revised budget the board approved, Walsh said the total general fund revenue increased by about $1.52 million, down about $763,000 because of reduced enrollment projections.

Revenue increased through unemployment reimbursement, basic skills compensatory funding, paraprofessional training, school library aid, student support personnel aid, English learner aid and federal aids and grants, among others. The paraprofessional training funds, school library aid and student support personnel aid are new revenue streams this year.

General fund expenditures increased by about $1.98 million, including about $930,000 in increased salaries and benefits through settled contracts and between-term unemployment.

Supplies and materials were up about $394,000, which included about $290,000 in expenditures made through federal grants for instructional tech devices and Project Exploration supplies.

Capital expenditures were about $645,000 higher because of new elementary school classroom furniture and long-term facilities maintenance on roofs. The classroom furniture was paid for through federal grants.

Walsh said with the budget changes, the district would end the school year with an 11.94% unassigned fund balance, which is slightly less than its target of 12%. In the 2022-23 school year, it was 12.37%.

There were no material revisions in the Community Education fund, and the food service fund balance was expected to be about $663,000.

Walsh said there is a restriction on how large the food service balance can be, and so the district has taken the opportunity to reduce some of that balance through replacing equipment in the district.

In the Self-Insured Internal Service Fund, she said it was a high claims year, and the fund will reduce from $4.6 million to just under $4 million.

She said less assumptions will have to be made next school year in the preliminary budget because state funding and union contracts will already be in place.

She is anticipating another enrollment decrease by 50.

School board member Bruce Olson talked about students he sees getting picked up in Albert Lea to go to Alden-Conger, and he’s sure the same thing is happening for Glenville-Emmons. He asked if the district is following up with families if they are choosing to leave the district.

Wagner said they get a weekly update of incoming and outgoing students, and there is a staff member who checks with all of those families.

Board member Neal Skaar said declining enrollment will theoretically be a challenge for at least the next 12 years and noted the reductions will not just be teachers, but across the board. He encouraged considering creative methods of dealing with the adjustments.

Walsh said the district needs to stay on top of the situation to make sure it remains successful.

Skaar said the adjustments do not have to be drastic and referenced not replacing when people retire or leave for other reasons.

School board Chairwoman Kim Nelson said it will be a balancing act to make sure the district is providing a great school experience. She noted while some may have left the district, she said she believes the offerings the district has is attracting people to come there as well.