Budget talk at ISD 833 school board covers district reimbursement formula, challenges for district moving forward

For those looking to get information on the school plans moving forward, assistant superintendent Kristine Schaefer shared a website at the February 17 school board meeting.

“So just a reminder for everyone watching, this (www.sowashco. org/facilityplanning) is the website for all the information we’re sharing tonight,” she said at the February 17 school board meeting, with no decision taken by the board on what to do for facilities as such. Assistant superintendent Kristine Schaefer and director of finance and operations Dan Pyan meanwhile shared the current update, following a current situation and budget update by Pyan.

“So to recall, a little over a year ago at its January 21, 2021 school board meeting, the school board approved $9,044,644 in reductions to the General Fund Budget,” Pyan said for the budget update prior to longrange facility needs. “They (the board) approved an increase of $290,200 to the revenue budget. They directed Administration to seek an increase of $6.6 million in operating levy, and also approved a total adjustment in the 2022-23 general fund budget of $7,939,177, with an adjustment to the general fund for 2023-24 budget of $7,860,401,” he said.

With the changes made as stated, the district had been able to present a balanced budget, made with a projected enrollment figure of 18,472 students. The student headcount matters for budget purposes insofar as the district receives an average of $10,500 in funding per student, with the basic amount affected by a formula put together before the start of the present century, Pyan told the board. Having given a quick review Pyan then went into the district’s current situation.

“The basic formula has never been a number that was a formula,” he said, with pragmatic adjustments made when state legislators decide what’s needed or else can be afforded per student— but there was a catch. “And so what happens is that inflation is always going to happen,” Pyan said, with the rate of inflation outpacing the formula’s ability to compensate. “We know that as of this year we get $6,728 per student,” he went on. “And you say, well Dan you said we get $10,500 per student.”

The discrepancy, Pyan shared, was due to each district having its own operating levy, added on top of the basic formula “and a couple other aids.” The gap between inflation and the actual revenue per the formula received at present was $782. Doing the math with a projected student enrollment figure as of the February 202 of 18,529, comes out to almost $14.5 million dollars that the district should be getting per the formula but isn’t, the gap tending to grow with inflation.

“I just wanted to point out that this made a factor in our budget,” Pyan told the board.

Having covered the impact of state aid on the school budget, Pyan moved next into financial forecasting for the school district. With a smaller student drop during the pandemic than other metro districts, the resulting fallout had still cost the district over $2 million in funding.

“So as we look a thumbnail into our future and we’ll get deeper into our revised budget at future board meeting, but as I look at it, I think going forward our unassigned general fund balance should hover at seven percent,” he said, with various numbers covered, including the operating levy, special education costs, and others, including employee salaries. With the formula increasing by two percent in 2022 while each teacher cost about $100,000 between salary and benefits, the prospective need for new full-time employees was one thing to keep in mind, budget-wise. With the present legislative session not a school funding session but Governor Walz proposing an increase to the formula, special education funding was also being considered. In short, ‘stay tuned.’ Moving next to questions from the board, member Eric Tessmer raised one about inflation.

“From what I’m hearing, the entire year’s inflation—they think they’re going to meet it already in spring,” Tessmer said, asking how this affected the school projections. Pyan said he had used the state figure of 6.2 for inflation.

“That’s probably going to affect us most on utilities,” he said, saying that things like healthcare and wages were negotiated “at set amounts.”

“But yeah, it’s going to be tough,” Pyan said of the year to come. With other board members addressing the cost of heating among other matters, before long it was into the long-range facilities update, presented by Pyan and Schaefer.

“Good evening, school board chair Van Leer, school board members and superintendent Nielsen, student ambassadors. We’re here tonight to give you an update on where we’re at with the long-range facility process,” Schaefer said, saying that the information would be shared again so that community members tuning in on SWCTC could hear as well, given that the February 3 workshop was not public.

With that, Schaefer went into the two plans that the district had narrowed things down to.

“So the main three data points that are guiding our work, we know that it is projected that within 10 years that we will have 8,00 new homes in our school district,” she said. “And that is Cottage Grove and Woodbury.”

With 8,00 new homes, it was expected that there would be 3,500 new students and 15 schools projected to be over capacity in the district.

Going next into the purpose and primary goals of long-term facility planning, Schaefer laid out the following points as important: • To ensure adequate classroom space at all grade levels

• Space for early learning, special education, alternative high school and operational facilities • To achieve the best possible learning environment for students • To design equitable learning spaces at the elementary, middle and high school levels “So those are our goals,” Schaefer said. With the board approving goals for a 10-year facility plan at its January meeting, the following would need to be addressed by the district in its planning:

• Enrollment increases from new construction or changing of boundaries

• Modernization of classroom space

• Needed renovations such as elementary bathrooms

• Curriculum and/or instructional delivery methods

• Transportation facility needs

• Alternative high school space

• Operational facility needs

• Early learning programming

• Special education programming • How buildings/schools will be repurposed With these board-approved goals in mind, Pyan took over from Schaefer to talk about enrollment figures, with a slowdown from the pandemic but projected to rise again with home construction.

“Right now we’re looking at, what if we did nothing?” he asked, then brining up the charts with the answers.

Among the schools shown, Bailey Elementary was projected at 546 students overcapacity, Grey Cloud Elementary at 662 students above design limits, Pine Hill Elementary at 333 students overcapacity, and Liberty Ridge Elementary 190 students over the limit, just for the lower grade levels.

As to the middle school picture, Oltman Middle School was projected to reach 459 students overcapacity in 10 years, with Lake Middle School the second highest for middle school numbers, projected at 91 students above capacity over the coming decade.

For high schools, meanwhile, all three are at or above capacity, with East Ridge at 1,984 students with a capacity of 1,712, while 10 years from now the gap is expected to grow larger, to 858 students overcapacity from just 272 above capacity at present. With East Ridge and Woodbury high schools already overcapacity, the next two years is projected to see Grey Cloud Elementary, Pine Hill Elementary, and Oltman Middle School join the overcapacity school club. Within 10 years the situation gets worse yet. So what might some solutions be?

To do that you need a team or set thereof, including leadership, design, steering committee, task force, focus groups, and community information sessions to give feedback as the planning process moves forward. Motstly skipping over the planning mechanics for the present, however, there are at present two working options after feedback, one entitled ‘Working Option A’ and the other ‘Working Option B.’ Each of these in turn have both shared components and unique features.

As to shared components they are the following:

• Two early learning sites with pre-K in most elementary schools

• Renovation of early learning and special education spaces

• A new, centrally located elementary school, and

• Current middle schools being increased to 1,400 students each, and

• Small changes on elementary boundaries and no change on middle school boundariesAs to the features which are unique, they are the following:

• While working Option A would see current high schools increase to 2,400 seats each with future expansion to 2,700 seats, Working Option B would instead see construction of a new, traditional high school with 1,700 seats, the future expansion to 2,700 seats coming later.

• Whereas Working Option B would see extensive changes to high school boundaries, Working Option A would not.

• Whereas Working Option A would see 120 to 160 acres of land purchased preemptively before it was needed for future district use as the district grows even larger, Working Option B would see current high schools maintain their capacity, with a future expansion to 2,700 seats.

These, in summary, are the commonalities and difference between the two working plans. Working Option A , meanwhile, is projected to cost $432 million, defined as $264 additional tax per year for a home worth $300,000, while Working Option B is projected to cost $582 million, for $408 additional tax per year to fund the project. The difference in price for Working Option B is fueled by construction of a new high school.

Shared by Pyan, meanwhile, was the news that school districts did not get in the bonding bill and that schools had to be built by the local taxpayers, with a bond referendum needed in the future to ultimately decide the matter. The school board will narrow down to one plan in March, with community information sessions scheduled to help inform the public. With Board approval then being sought in April for the proposal along with approval to hold a bond referendum, the choice would then go to voters in a special election, to be held later this year on August 9, 2022.

With strong housing growth in South Washington County, East Ridge High School off Pioneer Drive in Woodbury is predicted to be overcapacity, with one proposal seeing construction of a fourth high school in the district. Photo by Joseph Back.

Touched on at the February 17 meeting for ISD 833 was the fact that inflation rises faster than the state formula for reimbursing the cost of education per student. Image from ISD 833 presentation by Dan Pyan.