Before gathering together for Thanksgiving festivities at the end of the week, the ISD 318 School Board held a special meeting Monday, Nov. 25 at 5 p.m. to discuss budgetary concerns and boundaries for the new elementary schools in Grand Rapids.
Preliminary audit results
Superintendent Sean Martinson presented the preliminary audit results to the school district board. The presentation did not come as a surprise as it confirmed deficit spending that had been previously shared with the board. WIPFLi CPAs and Consultants of Duluth conducted the audit. A final version will be presented at the Dec. 16 school board meeting.
While there were a number of categories affected, the total deficit totaled -$1,319,758.71. Specific areas with deficit spending included:
Maintenance Supplies: -$79,597.36
Itasca Area Schools Collaborative (IASC) Technology billing: -$146,141.46
Student count went down by 26.73: -$163,950.40
Teacher salary: -$6,040.91
Two speech teachers not allocated in budget: -$103, 584.00
Teacher substitutes: -$127,277.25
Teacher stipends: -$92,777.56
School board: -$20,380.66
District office: -$34,229.65
Early Childhood Special Education (ECSE): -$279,384.68.
A closer look
One issue in particular that caused a large impression on the budget was a keying issue in the Maintenance Supply budget. It was listed as $14,000 but should have been $114,000.
Issues with IASC technology billing were found to be caused by a past procedure where individual superintendents and school board members were responsible for bringing information back to their business offices. Due to poor attendance at meetings, “it was decided that in moving forward the agendas will be shared with all of the IASC Business Managers so they could attend meetings that had financial implications included in the agenda,” according to Martinson’s presentation.
Although the school district continually looks to have current enrollment numbers as updated as possible, monthly school aid was lowered due to a decreased student count. Other factors that affect the ability to accurately predict student enrollment include post-secondary education options, transient numbers at the Juvenile Center, open enrollment and early graduations.
Utilities—specifically, electricity, heat, water and sewer— are based on seven year averages. These averages are then adjusted after factoring in rate increases. Unfortunately, this method does not seem to work as the past three years have shown deficit spending in utilities.
“We need to look at more actuals, rather than averages,” Martinson suggested.
The school board’s budget saw overspending in the categories of stipends (-$2,530), postage, use of school vehicle (-$6,529), mileage reimbursement (-$4,473), chargebacks, supplies, technology supplies, outside services, software licensing, technology devices and food for workshops. Stipends and some mileage reimbursements were greater than expected due to an increase in meetings.
A former decision to pay for the D.A.R.E. transportation to the annual Twin’s game outing was the majority of the mileage and use of school vehicle deficit of the district’s budget. The budget was approved prior to the most recent superintendent search, which also impacted the school board budget.
Because there was not a value in the budget for the two new speech teachers, the finance system of the schools did not reflect the new budget numbers.
Board member Susan Zeige asked if the new speech teachers were approved by the school board.
Martinson replied, “This was board approved, this didn’t get entered into the budget.”
Superintendent vacation payout, director salary/benefits, medical insurance also saw deficit spending. Medical insurance was affected by people changing coverage options. While the director salary and benefits was budgeted, it was under the special education program, which resulted in the special education program going over budget.
Overspending in the business budget was due to unplanned retirements which result in additional training and overlapping time while the new hire is trained. On the frontline, the school district’s time card system and sub/leave system all raised fees for the year. Additionally, legal expenses were higher than expected last year.
Piggybacking off of the first portion of the presentation, Martinson then discussed the deficit spending plan. A common theme throughout the presentation was the need for more work with the school’s business manager.
“We do need to continue to look for efficiencies in every program,” Martinson noted. “I will need more time with the business manager.”
The ISD 318 school board set a fund balance goal at 5% of expenditures, or $2,687,336.
Martinson continued by emphasizing that the school district continues to be financially healthy. On the other hand, there is a need to look for ways to cut spending and a need to cut things before adding more.
A budget process and timeline was outlined at the meeting. Going forward, a final levy approval will be in December. In January, there will be a school board resolution to direct administration to recommend reduction in programs and staffing. Meetings will be conducted with all principals and directors to review current budgets and projections. The principals and directors will then begin to add or eliminate programs for the upcoming school year.
In February, the school board will be presented a first model of an anticipated budget for the 2020-21 school year. Project costs will be requested for program changes and then will be presented to the school board. Next the school board will have a workshop to discuss these factors.
The Education Minnesota Grand Rapids Committee will explain the staffing plan in March. Additionally, public and staff meetings on the staffing/program changes proposed will be held. The district will then work on the proposed budget and use information from legislative actions.
The school board will take action on “Unrequested Leaves of Absence” and “Non-Renewals” in April and will have official papers delivered to staff.
An adopted budget for the 2020-21 school year will be up for approval in June by the school board.
A number of possible cuts were discussed at the special meeting. No action was taken on any suggestion. Some of the ideas included savings from retirees, cutting bus purchases by one per year, changing the district device models for students and staff, increasing activity fees and compensatory aid from free/reduced family applications which would also result in additional Title Funding. Martinson’s presentation did note that there are no cuts allowed in special education funding.
Board chair Pat Medure expressed gratitude to Martinson and the administrative team for putting together the presentation. He also recognized how long of a process it will take to overcome the deficit and stressed that the school board be kept in the loop.
“It’s not going to happen overnight,” Medure said.
New Elementary School Boundaries
School board members were presented an update on boundaries of the new elementary schools being built in Grand Rapids. With the schools slated to open in August 2020, the district needs to address how they will align and place students between the two Grand Rapids elementary schools and Cohasset Elementary School.
“You do need to balance the kids by numbers and where the transportation makes sense.”
Previously, the boundaries between the four elementary schools were fairly straightforward. The message from Martinson showed the new boundaries may not be as clear. Due to a variety of factors, including a population shift toward more students living in town rather than in more rural areas, boundaries will have to be carefully drawn to have an appropriate balance of students in each school.
“The population density really throws it off,” Martinson said.
Additionally, Martinson noted the need to balance grade levels in each of the elementary schools, as well as the number of free/reduced lunch families. Close proximity of the Greenway school district to the new east elementary school also raises some challenges in establishing boundaries as the two districts are within walking distance of each other.
“We have to be really upfront with everybody,” Martinson commented. “It’s not going to be as clear as everybody wants it to be.”
While an official plan for the new school’s boundaries has not been determined, Martinson expressed the need for a more formal process for students to change schools in the future. In the past, a very informal process was used if a student wanted to go to a different elementary school other than the one they were alloted to. One issue that this creates is the need for different transportation for the student.
“We cannot have special transportation routes,” Martinson said.
A press release from the ISD 318 school district stated, “Throughout the summer and fall of 2019, the district invited community members, parents, and staff to work with the Transportation Department and Administrators to make a recommendation for new school boundaries and potential bus routes to the School Board. Definitions and policies will be shared with parents in January. There will be an implementation period of two years, after which the Board will return to the public for feedback and suggestions.”
The school board approved a motion to authorize the superintendent to issue notification of termination of employment certification pursuant of the employment contract which will go into effect Jan. 24, 2020.