Budget is rosy for consolidated schools

School board members got a glimpse this month of what a budget for a Carlton and Wrenshall consolidated district might look like. Some rough data project a significant fund balance increase for school operations in a consolidation. With current enrollment staying intact, savings in administrative salary costs would drive a $786,200 balance of revenues over expenditures.

Representatives from Arrowhead Regional Computing Consortium presented the numbers during a joint meeting of the district school boards online last week. ARCC’s Jennifer Smith and Cindy Olson warned board members that their projections were basic and multiple variables in a consolidation could change the results. The projections were based on the past two years of both district budgets projected into a 2021-2022 school year.

More than 70 percent of school costs come in staff salaries and benefits, so the obvious reduction in administrators plays the largest roles in savings. ARCC showed that there would be about $842,000 in savings in a consolidation because administrative positions would be reduced from 25 to 15, saving nearly $670,000. There would also be a reduction of about three staff members, or another $170,000 in reduced salary.

Smith and Olson showed three scenarios for overall fund balance increases depending on enrollments. The districts currently serve about 850 students. The $786,000 fund balance is projected under an enrollment of 800. The other scenarios are for 771 students ($539,000) and 742 students ($290,000).

ARCC, a data management group run through a cooperative of districts in Aitkin, Carlton, Cook, Itasca, Koochiching, Lake and St. Louis counties, combined the Carlton and Wrenshall annual budgets from the past two years. In 2018-19, there was a fund balance of $329,000, buoyed greatly by Carlton’s sale of its bus fleet as it contracted transportation to a private company. In the current school year, the balance has disappeared, plunging into the red by $380,000.

The savings isn’t a surprise. Board members had few questions about the projections after they were presented.

ARCC used numbers in a consolidated district and compared them to a similar-sized district in the region as part of its calculations.

Board members are still awaiting word from the state legislature on a bill that would provide funding for building improvements needed in Carlton and Wrenshall for a consolidation. This year’s session ended without the major tax and bonding bills passing. Lobbyist Reid LeBeau called in to the May 20 joint meeting to provide an update on the status of the measure — which essentially changes language used for emergency funding for districts suffering natural disasters to include consolidation. He said it will likely remain in the overall tax bill. He said there will be a special session in June but what that entails is anyone’s guess.

LeBeau said legislators have shown little opposition.

The delay means there will be no referendum put to residents in August. Should the bill not go through, the districts would likely drop consolidation consideration for 2021. If it does pass, the districts could hold referendums in November or February and still consolidate, at least on paper, by June of next year.