District 622 must cut budget by $8 million

Deficit spending, decreasing revenues have district over budget

Facing an $8 million budget shortfall, School District 622 administrators and school board members will have to make some tough decisions in the coming weeks.

The North St. Paul-Maplewood-Oakdale School Board approved a budget reduction plan for next school year at its Jan. 27 meeting that will slash at least $8 million from its general fund budget.

The board was left with little choice after being presented with the 2013-14 audit, which shows expenditures exceeding revenues by the same amount.

"You have had expenditures in excess of your revenues by a little bit more than $8 million; [that is] very significant deficit spending," Jim Eichten of MMKR Certified Accountants, who performed the audit, told board members that evening.

Reserve dollars from the district's general fund were also depleted over the same time period to pay for much-needed improvements, such as safety, security and technology upgrades, as well as for artificial turf at the North High and Tartan stadiums.

Additionally, the district is receiving over $1,200 less in per-pupil spending than in some neighboring districts, for a total of about $12.9 million per year, according to a written statement.

District 622 business services director Randy Anderson said much of that has to do with the lack of voter-approved referendums. He said district residents have not passed an excess tax-levy referendum in at least a decade.

Administrators have shied away from asking for additional funds from voters in recent years after reviewing results from surveys sent out by the school district, which did not show support for levy increases.

Rather than decreasing spending, the district decided to forgo reductions to its budget the past two years following six consecutive years of considerable budget cuts.

"We took a reprieve for a couple of years and we find ourselves right in the situation that we would rather not be in, but we are dealers of hope, and we're going to get out of this just like we've done before," superintendent Patty Phillips told board members.

Declining enrollment and decreased property values have also contributed to the district's financial woes. Anderson said student enrollment has been on a slow, steady decline over the past 10 years. But, he said, current enrollment projections show that number flattening out in the next couple of school years.

"Birth rates in our area have been on the increase over the past four or five years," he noted.

Anderson said some of those children would soon be entering kindergarten, which should boost enrollment in the district some.

And while property values have begun to climb in some District 622 communities, they are still far below pre-recession levels.

School board to vote on cuts next week

Assistant to the superintendent Kim Cavallaro said district leaders have been working to identify possible budget reductions. The district has also been collecting feedback and suggestions from District 622 residents. She said recommendations from school administrators and the public would be presented at a school board study session Feb. 10 -- after the Review's press time. Board members will vote on whether or not to adopt administrators' final recommendations at the Tuesday, Feb 17, board meeting.

"We will have a minimum of $8 million in reductions for you at that time," Phillips told the board.

As of Feb. 7, Anderson said he was unable to discuss specific cuts, or whether the district would have to cut programming or layoff some of its 1,500 employees.

At the Jan. 27 meeting, Eichten said while general fund revenues were "very close to budget," expenditures were "over budget by quite a bit." Salaries were identified as being a large part of the over expenditures.

"Salaries, specifically, were over budget by $4 million, and that's a pretty significant number when it comes to an audit," Eichten told the board. "That's a bit more than what was put in front of you as a budget."

Joshua Nielsen can be reached at jnielsen@lillienews.com or 651-748-7822.

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