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School Board approves proposed budget adjustments, addressing $4.1 million shortfall
Tuesday, April 14, 2020 — At its meeting on April 13, the South St. Paul School Board approved the 2020-21 proposed budget adjustments for addressing a projected $4.1 million budget shortfall. According to district officials, the gap is the result of declining enrollment, increasing costs and inequitable state funding.
“This is the largest reduction we have had to make in our district in the last decade, so the impact to our organization is significant,” said Superintendent Dave Webb. “We have worked hard over the past several months to align our budget to the district’s core values and vision and to hear from key stakeholders. We don’t bring this proposal to you easily.”
Every year SSPPS conducts a formal financial review of available resources and evaluates the effectiveness of programs and services. In December, administration started its annual budget adjustment process to address funding shortfalls, changes in enrollment and other financial factors.
At the Jan. 21 School Board meeting, administration presented background materials on the district’s financial picture, noting an anticipated $4 million shortfall for 2020-21. After utilizing one-time funds and adjusting staffing ratios in alignment with established class size norms, the district’s shortfall was reduced to approximately $1.17 million. As a result, the School Board agreed to a budget adjustment target to address that difference. In February, after reviewing additional data, to include declining enrollment numbers, administration recommended increasing the target for additional program and staff adjustments to $1.25 million.
The budget adjustments that were approved at the April 13 School Board meeting include the following:
- Reduce Fund Balance By 2% = $800,000
District policy currently requires a 12% fund balance. By reducing the fund balance to 10%, the district can access one-time funds to help address the budget shortfall, while remaining financially secure.
- Access Other Post-Employment Benefits (OPEB) Fund Reserves = $775,000
The OPEB trust fund provides retirement benefits, other than pensions, for district employees. The fund currently has excess reserves. Accessing the fund balance will not impact benefits for retirees, but it will provide one-time resources to help address the budget shortfall.
- Realign Staffing to 2019-20 Class Size Norms = $1.26 Million
Current staffing levels are below class size norms approved by the SSP School Board. As enrollment drives revenue, staffing must be re-aligned to enrollment. This realignment to current norms (no increase in norms is recommended for next year) will result in the reduction of 18 teaching positions. According to a recent study, the district’s current class sizes are among some of the smallest in the metro, and will likely remain so given no recommended change to staffing norms.
- Additional Program and Staff Adjustments = $1.26 Million
Additional budget redesigns, reductions and revenue generations were identified including restructuring and/or cutting some positions and adjusting current program and services.
Webb noted that within the staffing adjustments, the plan does include a new comprehensive student support model that will be consistent at each level of the organization -- elementary, middle school and high school.
“We worked hard last year with our budget process to get counselors in place at every school site,” Webb said. “With the new comprehensive student support model, we are not only ensuring that our counselors maintain services at every site, but that we will be able to continue providing the needed support and services that students, families and staff desire.”
School Board members and Webb were clearly challenged about the difficult decisions included in the proposed budget. “This is an incredibly difficult process,” said Board Chair Jeff McClellan.
“It’s a really sad night; a sad night for our school system” added Webb. “I am most upset about the state and how the funding formula is hurting our kids. That is what I am most angry about. But I also believe that we have to stay focused on the goal of being the best IB district, and being the best at MTSS and PBIS. I believe we can still be the best.”
Following the April 13 budget approval, the district will move ahead with a more detailed budget that will be approved by the Board in June per state statute.
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