2022-23 Cost Containment
One of the many unfortunate consequences of the COVID-19 pandemic is its financial impact on our public schools. Many Minnesota school districts are projecting a shortfall for the coming school year.
Enrollment did not meet expectations. About 200 students left the district for either a private school or home school. The 250 new students we anticipated and budgeted for did not arrive. In total, our enrollment was at least 450 students short of projections, with a loss of revenue of approximately $5 million.
We aren’t able to confirm our enrollment numbers until late summer. It is not possible to significantly adjust staffing at that point. It was particularly challenging in late summer 2020. The combination of staffing commitments and State mandates that we keep staff on the payroll resulted in overstaffing. While we made some staffing reductions for the 2021–22 school year to align with student enrollment numbers, additional adjustments must be made for the 2022–23 school year.
Our district received some one-time pandemic relief funds. A portion of those funds, in combination with our district’s fund balance, allowed us to avoid significant cost containment measures in the 2021–22 school year. COVID-19 relief funds are not an on-going source of revenue for our district.
We brought together a team of administrators representing all district schools and departments. They created a list of recommendations for reducing the General Fund budget by $5.2 million (2.9%) for the 2022–23 school year. They used the following guidelines.
- Use conservative assumptions to project enrollment, staffing and expenses.
- Assume a 2% increase on the formula, already approved by the Legislature.
- Do not assume any additional funding from the Legislature.
- Incorporate $5.2 million in budget adjustments as part of a multi-year cost containment process.
- To the extent possible, achieve recommended staff reductions through attrition.
- Slight increases in class sizes
- Staff reductions, primarily through retirement and attrition
- Smaller supply budgets
- Fewer professional development opportunities
- Slightly higher parking and athletic fees
The General Fund is used for general operations, including salaries and benefits, supplies, transportation, utilities and equipment. Our biggest asset and biggest cost is our people.
Our goal is to minimize the impact on any single school, grade level or department. Cost containment is a districtwide effort.
Aaa bond rating
Since 2008, we’ve been one of only 3 school districts in the state to maintain this rating. The proposed adjustments to the General Fund will ensure that we continue to maintain the rating.
Our district has experienced enrollment growth for every year for more than a decade. This contributes to our financial stability. Once the pandemic subsides, we
anticipate continued growth.
While the outlook for the future of our district’s enrollment is positive, we believe it is important that we make conservative projections now to ensure future financial stability.