Carlton School District out of SOD debt a year early

Talk about it

Eleven dollars may not seem like much to shout about, but it means a lot to the Carlton School District.

At the end of the fiscal year that ended in July, the district was exactly $11 in the black, according to Carlton Superintendent Peter Haapala. After close to 10 years of operating in the red, the district achieved a positive fund balance a year earlier than expected.

Haapala credits close scrutiny of all expenditures and the tremendous community support evidenced when voters passed an operating levy in November 2010 that cost even more than the one they’d rejected the previous spring.

“Everything adds up,” Haapala said Tuesday. “People sometimes only look at the big numbers, but bit by bit, it makes a difference. We’ve been working hard to maintain enrollment and we’ve been careful with budgeting and expenditures.”

Of course, the situation with misspent American Indian Education grant money likely means added debt until the district pays the money back, but that’s another story. [See “Carlton School District under scrutiny for grant spending” on this page for details.]

Two years ago, no one would have predicted the Carlton School District would be out of debt by now. The small school district had been taken to task by the Minnesota Department of Education (MDE) for being in statutory operating debt (SOD) for seven out of eight years, and there was a chance the district would have to close and send its students to other area school districts if a levy in the amount of $1,100 per pupil unit didn’t pass.

But it did pass, by a whopping 60 percent. At the same time, the district increased some class sizes and trimmed other costs, eliminating at least one bus route, renegotiating health insurance and cutting staff and salaries by some $120,000. Although enrollment dropped, Haapala said it is climbing back up now and currently sits at 468, up from 444 at the end of the last school year.

The levy dollars are helping reduce the debt and making sure the district can continue to offer most of the same classes and extracurricular activities.

“We still have all-day kindergarten at no charge to parents and we still offer most of the same classes,” Haapala said. “The biggest difference was making the classes larger.”

Sometimes that means making tough decisions. Haapala explained the school is not offering a woods class this year because only nine students signed up. He’s hopeful, however, that more kids will sign up next year.

Even last summer’s flood wasn’t enough to derail the district’s progress, despite the fact that the floor had to be replaced in the high school’s large gymnasium because so much water had flowed underneath that it was essentially destroyed. Haapala said between insurance and reimbursements from the state of Minnesota and the Federal Emergency Management Agency, the district should recoup all its expenditures from the flood repairs.

On top of that, Carlton’s football team – which cancelled its season last year – made a comeback and competed in the 9-man football league, and the district recently started a new STEM (science, technology, engineering and math) program for middle-school-aged students in the district.

“There are some positive vibes in the school district,” Haapala said. “We’re working to build a fund balance now, so when things happen [as when the state ‘borrowed’ school funds last year] we have a little bit of room to maneuver,” Haapala said.

Being in SOD actually worked to Carlton’s advantage last year, in terms of state funding reductions. Although the state legislature and Gov. Mark Dayton passed laws that would give school districts only 60 percent of promised state funding with the remaining 40 percent promised to come “sometime” in the future, because Carlton was in debt, the district received its normal 90 percent of state funding.

“It certainly helped our cash flow situation,” Haapala said. “We don’t know what will happen next June. We’ll see what the state legislature does.”

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