Cloquet school district expects $2 million in cuts for next year

The Cloquet school district needs to make roughly $2 million in cuts for the next school year, officials said at Monday’s school board meeting. That’s a lot, even for a budget that is fast approaching $35 million a year.

But the news is not as bad as it might seem.

Superintendent Michael Cary stressed that close to three-fourths of those cuts are coming as a result of two large grants ending in 2024. Those cuts were anticipated from the start of the Covid-19 federal Elementary and Secondary School Emergency Relief (ESSER) funding and a state literacy grant. Between them, the grants employed staff totaling $1.7 million in wages and benefits.

District finance director Candace Nelis said a smaller state grant — $187,500 for two years -- will offset the cuts slightly and keep some of the literacy grant staff working in that area. But the rest of the grant-funded staff will be moving back into the classrooms, and staff hired to fill those classroom spots will likely lose their jobs.

It’s not a one-to-one swap financially. Nelis pointed out that the grant-funded staff are the district’s most expensive staff. They are also the district’s most experienced staff. “They will be displacing less expensive staff,” she said.

The difference in pay and benefits will leave a gap of between $250,000 and $300,000 for the next school year. Add those costs to a predicted reduction in enrollment that will create another gap of $250,000 to $300,000, and Nelis is predicting the school district will need to make about $550,000 in reductions that were not anticipated.

“That’s above just the shifting of extra people back into the classroom and moving those people out,” Cary said.

On the other hand, the district spent some of its ESSER money on things other than staffing, strategically, Cary said.

“We used a decent chunk of our ESSER money just to make improvements and things around the school district that would last beyond the grant,” he said, citing the $1 million spent on the outdoor activity complex improvements and the purchase of some Suburbans to improve the transportation fleet.

“We did those things on purpose because those things last 10, 15, even 30 years beyond the grant money,” Cary said. “We didn't want to create an even bigger employment cliff for people at the end of this year.”

The board will hear recommendations for next school year’s budget cuts in April.

Enrollment trends

Revised budget numbers for this school year put the adjusted pupil units (a state measurement that counts secondary students as 1.2 students each) at 2,680, including Cloquet school district and Fond du Lac Ojibwe school students.

Superintendent Cary said the school district would have been on target for next year’s budget, had enrollment numbers stayed steady. But they continue to slide, a trend that started during the pandemic.

“It’s just been a steady kind of decline,” Cary said, estimating that the district is down about 150 resident students from seven or eight years ago. “We've been really fortunate that we saw a huge uptick over the last three years in open enrollment. So that huge uptick in open enrollment really helped soften some of the decrease in our students in the district.”

Several factors have contributed to the decline in student numbers.

Students who are home-schooled or enrolled in private schools don’t get counted. Also, a few more kids have chosen online school after the pandemic than did before. Additionally, Cary said, they’re seeing more and more students choose postsecondary enrollment options. PSEO is a program that allows 10th-, 11th- and 12th-grade students to earn college credit tuition-free while still in high school, through enrollment in and successful completion of college courses. With traditional PSEO, these courses are generally offered on the campus of the postsecondary institution; some courses are offered online.

“We love the fact that kids can go off and get college credit and get that university experience,” Cary said. “But when they do, those students come out of our numbers, [which means] they come out of the money we receive, and that money then goes straight to the college or university.

Prior to the pandemic, the Cloquet school district usually exceeded its conservative enrollment estimates, and receiving state funding largely based on student numbers meant more money for the district.

After seeing numbers fall more than estimated for several years in a row, the district further reduced enrollment estimates last year, leading to a bright spot in the budget discussions: a surplus in the unassigned general fund of $80,000, following several years of deficits amounting to hundreds of thousands of dollars that required the district to dip into reserve funds. Additional funds from the state were also a big factor.

Administration has been digging into future enrollment trends. Cary said they expect smaller kindergarten classes to continue, while the district’s larger classes graduate. The district will need to continue discussions and begin planning for smaller enrollment, with overall class sizes going from as high as 220 to more like 180.

“An 800-student building can support a lot more options than a 650-student building,” Cary said. “We will have to make some difficult decisions as an administration and a board over the next couple years.”

On the bright side, the superintendent said the fact that people in the surrounding communities are choosing to send their kids to Cloquet is a sign that they like what the district is doing.

“So I don't think … we're losing kids because we're doing something wrong or there's something we need to fix, because there's way more families choosing to come in then are leaving, and that's only been increasing,” he said.

In other matters:

-Also Monday, board member Sarah Buhs shared that the Cloquet transit bus didn’t show up to take science fair students to the regional competition Feb. 10, so parents had to hurry up and drive close to 30 kids and their project display boards to the University of Minnesota Duluth.

She said Cloquet Transit — the company the district contracts with for transportation — wasn’t helpful when she asked for changes to ensure such an oversight didn’t happen again. The company doesn’t always confirm busing requests and seemed to indicate that they weren’t going to promise to always send a confirmation. “I don’t know what we need to do to hold them accountable,” Buhs said. “They need to at least send some kind of confirmation that they received [a request].”

Cary said he is meeting with the bus company in April and will make sure that’s on the agenda.

-District facilities manager Brock Wilton said the solar panel project at the middle school is physically complete, with inspections by Minnesota Power and the city of Cloquet still to come.

-The board approved a five-year lease of 800 new iPads for the elementary schools at an annual cost of $73,900. The district is going back to sharing iPads between two students in grades K-2 and 1:1 devices for grades 3-4. The district had gone to 1:1 devices for every student during Covid because students were missing so much school.

-The board also approved a technology upgrade to the boardroom for board meetings and large-group training at a total cost of $32,789.