Finance & Operations

School District Finance Overview

South St. Paul Public Schools (SSPPS) finances are structured in accordance with:

• Governmental Accounting Standards Board (GASB) / Government Auditing Standards (National)
• Uniform Guidance (Federal)
• Minnesota Statute (State)
• District Policy (Local)

Minnesota school districts fiscal years are run from July 1 to June 30

• Per MN Statute 123B.77, school districts are required to annually approve their budgets by July 1

Resources are categorized based on purpose:

• Separated into buckets or ‘funds’
• SSPPS currently has seven funds

A school district’s operating budget is comprised of different revenue and expenditure categories called ‘funds’.

Funds are established and tracked within a structure known as the Uniform Financial Accounting and Reporting Standards (UFARS), as mandated by state statute and Generally Accepted Accounting Principles (GAAP). Each fund maintains its own separate revenues, expenditures and fund balances. 

The Seven Funding "Buckets" (funds) in SSPPS

• General Fund - The General Fund is used to account for the general operating costs, such as educational activities, district instructional and student support programs, student support services, operations and maintenance costs and building and district administration.
• Food Service Fund - The Food Service Fund records financial activities of a school district's food service program. Food service includes activities for the purpose of preparation and service of meals, snacks and milk in connection with school and community service activities
• Community Education Fund - The Community Services / Community Education Fund is used to record all financial activities of the district's Community Education program, including Early Childhood Family Education (ECFE), School Readiness, and Adult Basic Education (ABE)
• Debt Service Fund - The Debt Service Fund accounts for revenues and expenditures for a school district's outstanding bonded indebtedness
• Post-Employment Benefits Trust Fund - The Post-Employment Benefits Trust Fund is used to record revenue and expenditures for the district' post-employment benefits
• Internal Service Fund - The Internal Service Fund is used for two purposes: 
  • Record revenues and expenditures for the district’s dental and medical self-insurance programs, and
  • Record financial activity related to assets held in a revocable trust to finance the district’s Other Post-Employee Benefits (OPEB) liabilities.
• Trust Fund - The Trust Fund is used to record revenues and expenditures for the district’s flexible benefit plan

SSPPS Fund Balance

SSPPS's fund balance is comparable to a household savings account:

REVENUE - EXPENDITURES = FUND BALANCe

The General Fund is the district’s largest fund

The General Fund comprises the majority of revenue and expenditures in SSPPS. The General Fund manages the day-to-day operations. 

• Annual budget of approximately $45 million
• Revenues are generated through a number of sources, some of which are based on the number of students served in the district
• Expenditures include teacher salaries, supplies, utilities, etc.

SSPPS Fund Balance Policy

The School Board has approved Policy 702.1 for the district's General Fund, managing the amount of funding that must be kept in reserves. The purpose of this policy is to create fund balance classifications to allow for more useful fund balance reporting and for compliance with the reporting guidelines specified in Statement No. 54 of the Governmental Accounting Standards Board (GASB).

• The school district will strive to maintain a minimum unassigned general fund balance of 8% of the annual budget
• 8% equates to about 1 months worth of district operating expenditures

SSPPS General Fund Breakdown

The District's Food Service Fund manages the financial activities of a school district's food service program. Food service includes activities for the purpose of preparation and service of meals, snacks and milk in connection with school and community service activities.

• Food Service annual budget of approximately $2 million
• Revenues are generated from multiple sources:
  • Reimbursement from State and Federal government based on the number of meals served
  • School lunch fees
• Expenditures include kitchen staff salaries, food costs, supplies and materials, etc. (i.e. anything related to food service operations)

The Community Service (Community Education) Fund is used to record all financial activities of the Community Service program, including Early Childhood Family Education (ECFE), School Readiness, Kids Choice, and Adult Basic Education (ABE). 

• Annual budget of approximately $2 million
• Revenues are generated from multiple sources:
  • State funding for various programs
  • Early Childhood Family Education (ECFE)
  • Adult Basic Education (ABE)
  • Program fees
    • School-Age Care (Kids Choice)
    • Adult and Youth Enrichment Classes
• Expenditures include salaries, supplies and materials

The Debt Service Fund accounts for revenues and expenditures for a school district's outstanding bonded indebtedness.

• Annual budget of approximately $3 million
• Revenues are generated through property taxes
• Expenditures are for school district debt principal and interest payments (e.g. bonds, certificates of purchase, leases)

The Post-Employment Benefits Trust Fund is used to record revenue and expenditures for the district' post-employment benefits. 

• No annually budget is required
• Funding is for district’s post-employment benefit obligations
• Revenue is generated through periodic bond sales 
• Expenditures are for paying post-employment benefit payments

The Internal Service Fund is used for two purposes: record revenues and expenditures for the district’s dental and medical self-insurance programs, and record financial activity related to assets held in a revocable trust to finance the district’s Other Post-Employee Benefits (OPEB) liabilities.

• No annual budget is required
• Funds are used for the district’s medical and dental self-insurance programs
• Revenues are generated through the collection of insurance premiums
• Expenditures are used to pay for insurance claims

The Trust Fund is used to record revenues and expenditures for the district’s flexible benefit plan. 

• No annual budget is required
• Fund are used for the district’s Flexible Benefit plans
• The Fund accounts for a small portion of the annual revenue and expenditures, approximately $200,000-$250,000

One of the State’s primary Constitutional responsibilities is to support a “general and uniform system of public schools.” But when residents of one school district pay 2-3 times more in local property taxes to raise the same amount of school revenue as residents of another district, something is wrong. Our current tax system results in exactly that type of inequity.

For the past few years, we have asked the Legislature to fix this problem by passing “referendum equalization” – which means the state would pay a greater portion of referendum revenue currently covered by local property taxpayers. This would level the funding playing field across school districts and provide tax relief in low property wealth districts like South St. Paul.

How can the state measure all kids on the same academic scale when state academic funding is not equal?

We have a dream for

• Education funding in Minnesota to ensure equal access and opportunity for ALL students regardless of what community they live in
• Minnesota legislators to put ALL Minnesota kids first and honor their primary constitutional responsibilities of supporting a “general and uniform system of public schools”

We have a problem

• The state property tax system penalizes communities for having more residential property than commercial property
• Taxpayers with less commercial property in their community will pay 2-3 times more to raise the same amount of funding for their schools as a taxpayer from a community that has more commercial property

What is a voter-approved levy?

When a school district places a levy before voters, it is asking for the authority to collect a specific amount of money from local property taxes for a set period of time.

Why do districts need voter-approved levies?

Local voter-approved levies or referendums, have become necessary for Minnesota school districts to supplement inadequate state funding. School districts rely on school levies/referendums to provide and maintain educational opportunities for their students.

Why does the cost to taxpayers vary depending on what community they live in?

The cost to taxpayers for voter-approved levies varies greatly and depends on the community you live in. Taxpayers that live in a community without significant commercial/industrial property to broaden the tax base, will pay two or three times more just to raise the same amount of levy revenue for their schools than taxpayers who live in a community that has more commercial/industrial property.

What can I do to help?

Contact your local legislators and ask them to vote for school levy equalization.