Superintendent has an enrollment warning

Cloquet schools superintendent Dr. Michael Cary had an interesting observation he wanted to share with the school board during last week’s meeting.

As the board prepared to hear about the annual audit of its finances at the Nov. 13 meeting, Cary offered a warning about the cyclical nature of school enrollment that can make budgeting a tricky business.

Right now, the district is enjoying very large class sizes at the high school. Older students garner more money per pupil in state funding, so the district is realizing some fatter times than other cycles. But the thing to look out for now are smaller classes coming up. There are 193 students in the senior class today, but only 165 in the current kindergarten classes.

“That’s a big deal,” Cary said, because even with a stable level of enrollment across the board, the funding per student will wildly fluctuate, and having fewer high school students in coming years will bring state funding down.

The audit explained by Dustin Opatz of BerganKDV later in the meeting illustrated the tricky business of pinpointing a budget.

Changes in school lunches, pandemic funding and those student populations were all seen in a review of the 2022-23 numbers, Opatz said. But overall, the district budgeted pretty well. It had predicted about $34.7 million in revenues but actually collected $39.5 million, or 5.8 percent more than projected. The increase was largely due to using more Covid‐19-related grant dollars than anticipated, the audit report said.

But expenditures were also up from projections. The district had its numbers at $38.3 million. The actual costs were $42 million, or 9.8 percent higher than predicted.

The difference in revenues and expenditures was about $754,000, which was covered by the district fund balance. While that reserve took a hit, the district still sits in the state average for fund balance, at about 22 percent of the overall budget.

The district actually budgeted for expenditures to exceed revenue by $932,421, so the actual annual deficit came in about $178,000 lower than expected.

State revenue, which makes up the largest percentage of the district’s revenue at nearly 75 percent, increased from the year before by $311,315 due to an increase in the formula allowance, offset by a decrease in students served. Local property taxes, which represent 6 percent of district revenues, decreased $170,958 with a decrease in the levy. Other revenues that make up the remaining 19.2 percent increased $2,450,872 from the prior year due to increased interest revenue from an improving market and increased amounts of Covid-19-related federal grants.

Of note, Opatz said, is that a decline in district resident enrollment is being outpaced by students open-enrolling into the district.

Board members didn’t offer any questions or commentary after the presentation.

Cary took a few moments to offer what he said he likes to highlight each year when the audit comes out. He said the Cloquet district remains on the low end compared to other districts in its levy capacity, meaning that taxpayers are getting a fairly good bargain on education in the district. His mantra is that with a bigger business and industry base, the district could leverage a lot more from its tax base. That way if budgets get tight, they wouldn’t have to rely on homeowner tax increases.

It’s just an annual plea, Cary said, that the community push for a more robust industrial and business base to stabilize school funding.

Tech changes

The board voted unanimously last week on a switch to a single technology company for its district messaging, mobile app, email and website services. Cary said the time was right to make the change since two contracts for the services will end by the end of the school year.

He said there won’t be much of a change detected by end users when it comes to district emails and messaging, which will switch over on July 1. The most notable change will be in the district website. Cary said the company Apptegy has a much more robust and user-friendly website platform. He said a good look at what the company does can be seen on its work for the Hermantown school district site.

The cost to switch to Apptegy is slightly higher than the current contracts, at $14,000 a year, with setup costs up front of $12,000.