The St. Michael-Albertville School Board got hit with a dizzying array of numbers at the final 2016 board meeting, when they held the annual Truth in Taxation meeting as well as a presentation from their third-party auditor.
By law, all school districts must obtain an annual third-party audit. STMA’s auditor, Matt Mayer of Bergan KDV, said he was pleased to report no major findings and called it a clean and unmodified opinion.
“That’s the best we can give you, and that means the numbers we are looking at tonight are true and accurate picture of where you stood financially for the 2015-16 school year,” he said.
The district’s general fund balance has grown over the past year by about $340,000, to a current $15.7 million. This is the fifth straight year the fund balance has increased. He said STMA’s fund balance went from slightly under state averages at 18.5 percent in 2012 to 30.8 percent today. The total fund balance now sits at $23 million, but everything besides the general fund is restricted to spending in that particular category, such as food service, deferred maintenance or health and safety projects.
“They are part of the fund balance, but they’re not part of the fund balance that you can use as a board or decide that you’re going to use for salaries or anything like that,” Mayer explained to the board.
Some portion of the general fund is “assigned,” which means the board has set aside funds for certain programs like insurance claims, the Q Comp program or student activities. Mayer said it’s not required to do that, but called it a “good, prudent exercise” to set funds aside for specific needs.
What is left over is called the unassigned fund balance, which can be utilized at the discretion of the school board. That unassigned fund balance has also grown over the past five years, from $6 million in 2012 to $12 million today.
During the same five-year period, Mayer said that the average Minnesota school district’s fund balance went down slightly, from 22.9 percent in 2012 to 20.6 percent in 2015.
Revenues and Expenditures
Superintendent Dr. Ann-Marie Foucault said nearly 89 percent of the district’s funding comes from the state of Minnesota, while 1 percent comes from the federal government and 7 percent from local property taxes and levies.
Mayer said revenues came in at about $2 million over budget last year, which was mostly due to higher than anticipated enrollment, but also because the state gave districts more money for special education than originally forecasted and other local revenues came in higher than anticipated as well. On the other side of the coin, Mayer said the district spent $280,000 less than they originally authorized for the 2015-16 school year.
Most of the school district’s increased revenue is coming from state aid, and Mayer said “basically all” of those increases have gone directly into the classroom.
“Back in 2012 you spent a total of $42 million, $27 of which was spent in the classroom,” he said. “In 2016 you were up to a $53 million budget, but most of that increase occurred in the instructional categories.”
In her truth in taxation report, Superintendent Dr. Ann-Marie Foucault broke down specific numbers for how much the school district spends on teacher salaries, benefits, services such as transportation, supplies and administrative costs.
She said the total budget is just over $77 million for the current school year, of which over $56 million (73 percent) is going toward the general fund. Other categories include debt service at 17 percent and a couple smaller categories like food service and community service (community education.)
Of the $56 million general fund budget, regular education expenses account for $30 million, or 54 percent, of that figure. The next largest category is instructional and pupil serves at over $9 million, site/building/equipment at $6.2 million and special education at $6 million. Smaller categories include district and school administration (3.2 percent), vocational education, support services and fixed costs, all of which account for under 2 percent of the general fund budget.
How STMA Stacks Up to Other Local Minnesota Districts
Foucault explained in her presentation that there is increasing dependence on local levies due to the state’s funding increases not keeping pace with inflation. She said the state has given schools a two percent increase per year in the last biennium, but that the district would have needed an additional 9.1 percent this year in order to keep pace with inflation.
In 1993, she said 65 percent of school districts had referendum revenue at an average of $332 per pupil. Today, she said 100 percent have referendum and/or local option revenue at an average of $1,262 per pupil.
“STMA lags behind these averages by a total of $538 per pupil,” Foucault said.
Mayer said the STMA school district received just shy of $9,000 per pupil last year including all local and state aid, which is $2,600 below Minnesota’s state average. In 2015 STMA spent $8,515 per pupil compared with the state average of $11,800.
“You’re certainly getting less revenue, and you’re doing very well with it,” Mayer said. “You’re making do with a lot less than your typical district and you’re still financially secure. The question is out there that if you had equal funding, what could you do in addition to what you’re already doing here in the district? I think that’s an important question to ask.”