Matthew Mayer from Bergan KDV went over the St. Michael-Albertville school district’s annual third-party audit report last Monday evening, and he gave the district a clean or unmodified audit, which is the best opinion he can issue.
Mayer said that while STMA is still growing, its growth is slowing, especially among resident students. The district continued to see small growth in open enrollment. Strong growth paved the way for higher revenues and a growing fund balance for STMA in previous years, but Mayer said the district needs to plan for the slowing growth and corresponding flattening revenues and fund balance.
“Your rate of growth has been declining each of the last three years,” Mayer said. “Which means that the revenue you’ve been generating has not been at the increases you’ve seen in prior years.”
The district has gone from $2.8 million surplus in 2013’s budget to $1.2 million in 2017 and now a break-even budget for 2018.
Financial Trouble with Bright Beginnings Preschool
Mayer said the district needs to make changes to its school readiness fund, which covers costs for the district’s Bright Beginnings preschool program. That fund had a positive balance of $22,000 in 2014, but that balance has been slipping ever since. Last year it went into negative territory with a $33,700 deficit, and preschool parents saw a hike in tuition to compensate.
Despite this, the deficit has grown to $57,900 one year later. Foucault cited rising salaries and instructional supplies as reasons for the growing deficit. She said she will meet with the Bright Beginnings and Community Education coordinators to plan a way to balance the budget, and she said preschool parents should most likely anticipate another rate increase for 2019-2020.
How STMA Stacks Up Against Other Minnesota School Districts
Mayer said the STMA district spends $3,000 less per student each year than the Minnesota average, which equals about $18 million less per year. STMA does not qualify for much additional funding beyond the state’s basic formula. There’s myriad reasons districts can qualify for additional aid, such as having a higher percentage of low-income students or students learning to speak English, being in a rural area or a small district.
He also said STMA’s local operating referendum is close to half of Minnesota’s state average at around $700 per student versus the state average of $1,300. Mayer said the area’s low level of commercial development hinders STMA’s ability to bring in more revenue with local levies.
“You have a very strong residential base, but not a lot of commercial and industrial going on,” Mayer said. “Anything you do here in STMA, because of the make-up of your tax base … is going right to those $200,000 homes. That’s the challenge of funding this district.”