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Board approves final budget for current year, looks ahead to future budget realignment

Aerial view of Kuhlman stadium with water tower in foreground.

At its meeting on Dec. 11, the Edina School Board approved a final budget for the 2017-18 school year, which includes all of the district’s operating funds -- general, community service and building funds. The final budget updates the preliminary budget, which was approved by the School Board in June per Minnesota statute, and reflects the budget plan as approved by the Board last April.

The budget, which was reviewed by the Board Finance Committee and administration, does not account for the recently passed operating levy referendum, for which funds will not be accessible until the 2018-19 school year. As the funding for Minnesota school districts is largely driven by enrollment, the final budget includes a financial adjustment for a slight decrease in student enrollment for the current school year. The majority of school districts in Minnesota are facing declining enrollment. While the District has averaged a 0.2 percent increase in students over the last five years, enrollment for 2017-18 is projected to be 8,461, which is slightly less than the previous year. 

Director of Business Services Margo Bauck noted at the Dec. 11 meeting that as part of the approved budget plan, the District utilized one-time money from the fund balance to help offset the funding gap. The unassigned general fund balance at the end of the school year is estimated to be a little over $4 million, which equates to a 3.7 percent fund balance.

Bauck noted that the District will need to continue realigning resources to address the decreased fund balance in order to adhere to district policy, which requires a minimum fund balance of six percent with an additional two percent to be held for cash flow. “An eight percent fund balance equates to $8.9 million, and the district spends $9.7 million each month out of the general fund,” said Bauck. “Maintaining the fund balance at this level is sound financial management and has a long-term positive impact on the success of students.”

Recognizing the ongoing budget challenge facing Edina and many Minnesota school districts in which expenses outpace revenues, Chair Leny Wallen-Friedman suggested that the District look at opportunities for expenditure reductions in January through June as they are available. “Yes, we will be looking at what we can,” said Bauck. “And we are hoping for a warm winter. That always helps with cost savings.” 

According to Bauck and Superintendent John Schultz, preliminary work on the 2018-19 school year budget is already underway. “We need to have a strong plan to both increase the fund balance and address current and future learning needs,” Bauck said.

Schultz said that the District also needs to keep looking at how funds are allocated to ensure resources are truly aligned to meet the needs of today’s students and looking at which programs or services may no longer be needed in today’s educational environment. “We will be engaging our leaders, staff, students, and families in this important work as we look to strategically plan for the future,” Schultz said. 

View the complete 2017-18 Final Budget