When voters in the Carlton School District passed a new operating levy in November, that vote ensured the district would not be forced to close or combine with a neighboring school district.
Passing the referendum did not, however, mean the school district could avoid further cuts in expenses.
At its January meeting, members of the Carlton School Board directed district administration to propose reductions, which will certainly include staff cuts, because salaries and wages make up the bulk of the district's expenses.
Superintendent Peter Haapala said he wants to make sure community members aren't taken by surprise when the district begins the process of making those staffing cuts this spring, when teachers are required to be notified of any cuts proposed for the next school year.
The cuts won't be small. In fact, the district is in greater debt than was anticipated last summer when board members approved three different state-required plans to get out of statutory operating debt (SOD). Currently, the district's unreserved/undesignated fund balance at the end of the current fiscal year (June 30, 2011) is now projected to be $1,245,249. That puts the schools at more than $1.2 million in the red.
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Haapala said several factors played into the increased debt:
- Student enrollment decreased by 44 students this year, cutting $225,000 from expected revenues.
- Add another $350,000 in expenses because the previous board did not make recommended staffing cuts last spring, bowing to great public pressure to retain the teaching positions administration had recommended cut.
- Accounting found $100,000 that was donated for the music, art and drama programs had been wrongly placed in the general fund account; moving that money added the same amount to the district's debt load.
"We have to recover that money AND start getting out of the hole," Haapala said. "So we're looking at reductions of about $615,000. We want to retain as many programs as we can and still make things happen in the district."
The reality that the Carlton School District had been in SOD seven of the last eight years and hadn't had a state-approved SOD plan since 2007 also means the Minnesota Department of Education is keeping a close eye on the district, watching to see if board members and district officials follow through on plans to reduce debt.
Getting four new board members up to speed on the stark reality of district finances has taken some time, but Board Chair Tim Hagenah said board members have gotten over the initial learning curve.
"I think they all understand there are some heavy cuts coming up and we need to address this to show the state we're taking steps to get out of SOD," Hagenah said. "I try to look at it in a positive light. Overall, the district is moving forward. It may be baby steps, but in the next couple years things will look a lot better. But it's going to take work from everyone."
District officials are looking at different online school options as a possible way of increasing both revenue and student options, something Haapala said would be like adding a "virtual building" within the district, without all the costs associated with a physical building.
"It could make our district more attractive to home school students, for example, who may be doing online courses already but they could derive benefits from doing the same with a local school district," Haapala explained, adding that all enrolled students could take advantage of online and traditional classes.
Cuts made in the current school year include the elimination of one bus route last fall and the recent reduction of one full-time custodial position.
While the levy passed in November - in the amount of $1,100 per student for the next seven years - will give the district more money to use, those funds won't be available until the 2012 school year, after the current (lower) levy expires.
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According to district calculations, the new levy will generate about $913,792 in fiscal year (FY) 2012 versus $477,995 in FY2011, an increase of $435,797.
