Getting a handle on enrollment
SOUTH WASHINGTON COUNTY SCHOOLS — The bad news: District 833 is facing a $1 million deficit in its recently approved 2019-2020 general fund budget.
The good news: an uptick in new housing construction could help bolster their stalled enrollment numbers.
The district hired Davis Demographics to determine if some of those new homes in Cottage Grove and Woodbury have families with children who can help fill classrooms.
Public school districts in Minnesota get most of their operating revenue from a state aid funding formula based on the number of students enrolled.
Generally, the higher the enrollment, the more money flows to school district coffers.
In District 833, predicted enrollment declined from 18,593 in 2018-19 to a predicted 18,537 students in 2019-20.
"Our revenues are pretty flat as far as state aid," District 833 director of finance and operations, Dan Pyan said.
The district's expenses for the 2019-20 fiscal year are estimated at $250,388,426 with revenues at $249,240,739.
That $1,147,587 deficit could decrease, Pyan said.
"A million dollars is not a big percentage," he said. "We hope to end up in the black when we're done. Meanwhile we're being consrvative."
Some school districts are faring much worse. School District 728 in Elk River is facing $10.2 million in budget reductions for the 2019-20 school year, according to its website.
District 833 will not cut any programs, director of communications Shelly Schafer said. But they are not filling some vacant clerical positions until they can determine if enrollment increases.
Last year, the city of Cottage Grove platted more than 350 single-family lots and built 200 new homes, mostly in the northern end of the community. In December, Cottage Grove was recognized as having the second-most housing permits granted in the state, Mayor Myron Bailey said.
Pyan cautioned that some of the new homeowners or tenants could simply be moving from one part of the school district to another.
The district uses different formulas for predicting enrollment. Pyan said a demographer will provide a different kind of information.
"They can find out, are these new people or are they moving from one spot to another?" Pyan said.
It's not unusual to hire a demographer, Tom Melcher, director of school finance for the Minnesota Department of Education said. Some of the most valuable information they can provide is tallying the number of young kids who have yet to enter school.
"The trickiest part is estimating what's going to happen in terms of kindergarten. How many young families do you have in the district, how many preschoolers?" he said.
Meanwhile, they're not overestimating revenue, enrollment or otherwise.
"We get a little nervous when we're projecting revenue and the students don't show," Pyan said at a recent South Washington County School Board meeting.
Last month, the legislature increased the per pupil funding formula by 2% for 2020 and 2021.
School districts aren't going to turn down that money, but many, including South Washington County Schools, had pushed for a 3% increase. For now, they'll receive $6,438 per pupil, an increase of $126.
Enrollment is a two-edged sword, Pyan said.
"If it increases to a certain level, you need more staff."
A rise in costs
Like most public school districts, District 833 has seen increases in staffing and special education costs. Meanwhile, state aid has failed to keep place with inflation.
Inflation also isn't factored into the district's next largest source of revenue, the operating referendum.
The district anticipates hiring 15 special education teachers and 20 special education paraprofessionals for the 2019-20 fiscal year.
Pyan also estimated that health care costs will increase between 6 and 10%.
"We'll work on ways to get this down to a balanced budget," he said.
If next winter isn't as harsh, they may not have to spend the entire $800,000 he has budgeted for snow removal Pyan said. Last year it cost the district $900,000. They also have managed to return their Nutrition Services Department to profitability without raising prices, he said.
"It's been a real tight ship right now," Pyan said. "We don't have a lot of wiggle room.