District 622 issues financial report

The North St. Paul-Maplewood-Oakdale School District is grateful that the Minnesota State Legislature increased school funding. For two years, school funding has remained flat, while costs have continued to rise. The result has been a draining of the district’s reserve account and deeper and deeper budget cuts.

Despite rough economic times, District 622 has maintained its commitment to fiscal responsibility. Compared to other districts of a similar size, District 622 spends more on direct instruction and less on district and school administration. The North St. Paul-Maplewood-Oakdale School District spends 76.8 percent of its budget on direct instruction (teachers, books, and classroom supplies). That’s about 3 percent higher than the state average of 73.9 percent. When it comes to district and school administrative expenditures, District 622 spends $295 per pupil, compared with a state average of $416 per pupil. This administrative expenditure ranks us 155th out of the state’s 166 largest school districts in the state auditor’s 2004 financial comparison report.

We were delighted to hear that the legislature increased the basic formula by 4 percent for this school year. The district will also receive additional funds next year of about $1.9 million, totaling about $4.6 million over two years.

When the district established its budget last spring, we assumed a 1.5 percent increase in the basic formula or about $924,180 in increased revenue. But thanks to the state legislature, the district actually ended up with about $2.7 million in additional revenue this year - or $1.8 million more than we had anticipated.

About $136,000 of this year's increase is restricted, meaning the money is already earmarked for a specific purpose. The rest, or about $1.66 million, is unrestricted, meaning the money can be used at the district’s discretion.

District auditors recommend that school districts maintain 5 to 10 percent of their expenditure budgets in a reserve account to deal with fluctuations in enrollment, utility cost increases and other unexpected expenses. At the end of the 2004-05 school year, District 622 had a negative balance of $974,000 in its reserve account. To climb out of that hole, the district will be taking $550,000 of the additional revenue and replacing some of the fund balance. That still leaves the district with a negative balance in its reserve account of $400,000, but it is a step in the right direction.

Initially, the district had planned to use most of the additional revenue to put the reserve account in the black, but because of rising energy costs that wasn’t possible.

Energy costs for natural gas and electricity for our schools are expected to increase by about $1 million beyond what was budgeted.

Between the $1 million for energy costs and the $550,000 to restore some of the reserve account, the district is left with about $250,000 in additional revenue, which we will use to implement portions of the Strategic Plan, purchase new textbooks, and provide additional compensatory education funding to schools.

We are committed to educating all of our students in safe and challenging learning environments. We believe this plan is the most responsible approach for the North St. Paul-Maplewood-Oakdale School District, and we take our responsibilities to students and the taxpayers very seriously.

Comment Here