Carlton school board discusses possible budget cuts

Carlton school board member Jennifer Chmielewski captured the recent grim discussion about the district’s budget next year.

“What are you going to say?”

Her plain question was directed at Superintendent Gwen Carman, who is burdened with the task of telling staff in the district that she needs to find a way to make cuts expected to reach past $100,000.

“The facts,” Carman said.

There was a pause in the discussion Monday night as everything set in.

The district isn’t running into the red. But it is $483,000 short of where it needs to be to meet its self-imposed window for a fund balance. As the numbers now stand, that amount is 6.8 percent of the $5.7 million annual budget set last year. The school board-approved fund balance requirement is 16- to 25 percent, a measure intended to keep a budget cushion and avoid the dire budget woes that rocked the district from 2002-2011.

The fund balance in the current year meets the 16-percent goal of $924,000, coming in at $1 million. But estimated costs next year mean reaching the goal will require cuts.

There are some options for the board.

Carman and business manager Renee Effler said the numbers could change. Newly elected Gov. Tim Walz, a former teacher, has said he wants to increase funding for schools, particularly in rural areas. Carman said state funding has not kept up with salary costs in the district.

Carlton saw a drop in enrollment this year of 29 students, resulting in a $200,000 drop in revenue through per-pupil state funding.

The district has contracted for transportation services, a change that allowed it to sell its bus fleet for $312,000. That money was dedicated into the transportation fund by the board to cover expected increases in costs for bus service.

But Carman and Effler offered scenarios where the board could approve dipping into that fund to partially cover next year’s budget to keep the fund balance healthy.

Some board members said all of that money should be used. Others were more cautious, saying that taking just $100,000 might be more prudent.

“I don’t panic,” board member Tim Hagenah said. “A lot of this can change. We need to watch it. We’re still $482,000 to the plus.”

Keeping a budget reserve cushion is important for a district that has seen lean times in this century when it was in statutory operating debt for years, meaning the state had to come in and run the budget.

Board member Sue Karp said transferring $100,000 wasn’t enough. “382 (thousand) is a lot of money,” she said. “That’s a lot of cuts. This 482 (thousand) is like a heart attack.”

Board member Sam Ojibway said decisions should proceed as if $482,000 in cuts need to be made. Then, when numbers change, the board can pull back. “Use the 482 (thousand) as the number and see where we are,” he said. “482 stinks but 382 isn’t much better.”

Carman said she expects that a little over $100,000 in cuts will eventually be needed. “We’re going to have tough decisions,” she said.

The board could also approve a budget that defies its fund-balance requirement of at least 16 percent, leaving itself vulnerable if budget conditions continue to erode in the future.

The board needs to approve a 2019-2020 budget by June. But the clock is ticking if it requires cuts in staff. Teachers who are tenured have a process to grieve layoffs, meaning the district would have to notify them in April of any changes. Carman said about half of the district staff is tenured and that it wasn’t uncommon to announce layoffs and then rehire staff when the budget changes.

Board chairwoman LaRae Lehto said she wants to “see options and choose what is palatable.”

Effler presented options at the committee of the whole meeting. They include increasing enrollment; raising fees for activities, admissions and meals; increasing fundraising for teams and seeking grants for programming or equipment; and preparing for an increase in state funding.”

“Every little bit counts,” Effler said. “You get a little bit here and a little bit there and suddenly you have something.”

Reducing expenditures could include eliminating staff positions, shortening working hours, and reducing the calendar workdays.

Other cuts presented were in supplies for classrooms, reducing field trips, cutting travel for staff, and finding savings in other supplies.

It comes all the way down to the cost of paper supplies like toilet paper, Carman said.

Sharing elective courses with neighboring schools is also on the table, she said.

Board members talked about how cuts could exacerbate the enrollment problems, where students seek better opportunities in neighboring districts.

“It’s unfair to talk about reducing at the elementary level,” board member Ann Gustafson said. “That’s one of the worst places you can cut from.” She said the district already runs a tight ship. “It’s going to be hard to find bad spending,” she said.

The district has strived to keep class sizes in the elementary grades small, with two sections of students. It’s one of the draws for parents outside of the district. Enrollments this year are 28 students in Kindergarten, 32 in first grade, 27 in second, 42 in third, 30 in fourth, 33 in fifth and 34 in sixth. This year’s senior class is the smallest in the district, at 21.

“We are always wary of keeping two sections in K-3,” Hagenah said.

“I don’t want cuts meaning test scores going down more,” Chmielewski said.

Carman said the $482,000 figure is far beyond what can be expected in cuts. “A little over $100,000 is more realistic.”

She and Effler will explore the options and report to the board. Carman said a clearer picture will emerge at the committee of the whole meeting in early March, including, perhaps, some less grim numbers.

“I trust these two,” Hagenah said.

“We need to find out what’s important,” LaRue said. “We’re not deciding anything right now.”