After approving a slate of budget adjustments for the 2024-25 school year to balance out a projected $3.3 million deficit, the St. Peter School Board is eyeing continued adjustments for 2025-26 and beyond.
School Board member Drew Dixon said the district wasn’t finished making budget cuts after a three-year budget projection presented to the School Board on May 20 showed the district’s unassigned fund balance diminishing through the 2026-27 school year.
Last month, the School Board approved a $3.3 million budget adjustment plan to keep the district’s unassigned fund balance in the positive through the 2024-2025 school year. Unassigned funds serve as a cushion for the school district to assist with paying expenses during uneven months, and as a cash reserve in case of emergency.
The plan called for the reduction and elimination of several full-time staff positions, the termination of the fifth-grade band program, and the cut of one of two student sections at Rock Bend Alternative Learning Center among other adjustments.
The totality of adjustments leaves the district with $3.2 million remaining in its unassigned general fund reserves, enough to fund the school district for 43 days. If the deficit were left unchecked, the district’s unassigned fund balance would have depleted to a $12,000 deficit by June 30, 2025.
But budget projections through the year 2027 show that even with these cuts, the district isn’t out of the whole just yet. Without future budget adjustments at the district level, the school’s savings are predicted to drop to $92,700 by the end of the 2027 fiscal year — a sum only capable of funding the district’s operations for a single day.
“We’ve slowed it, we’ve bought ourselves to plan and execute, but we’re not done,” said Dixon.
In response to these projections, the school district has already begun drafting a tentative plan for over $1.2 million in budget reductions and reorganization for the fiscal year 2026.
A proposal, which has yet to be finalized, predicts the district could save $460,000 in staffing costs by transitioning to a traditional high school schedule. Based on declining enrollment projections, the plan also suggests the reduction of a student section at North and South Elementary, saving $150,000. In addition, the proposal calls for the reduction of $34,000 in field trip funding, the elimination of a middle school social worker and the reduction of a full time equivalent social work position.
Should the School Board implement the proposed budget adjustment plan, the district would be left with 22 days worth of operational expenses ($1.73 million) in its unassigned fund balance at the end of the 2027 fiscal year. However, that’s still $3 million short of the district’s goal to have 60 days worth of expenditures in its coffers.
“We can’t operate for more than three years doing that,” Dixon said, while pointing out the 2027 balance.
St. Peter’s continued financial difficulties are linked to the district’s ongoing challenges with expenses continuing to rise, while student enrollment is expected to plummet. Over the next two years, the district’s average daily membership is expected to drop by 50 students, reducing the dollars available to the district through the state’s funding formula.
School Board member Bill Kautt said the district had difficult decisions ahead of them, such as whether or not to cut a social worker position at the middle school.
“If we’re losing students, there’s got to be a point somewhere. We’re not losing them to the rate where one social worker will be twiddling their thumbs. If we have to get rid of a social worker, we will certainly reduce our capacity to serve our kids,” said Kautt. “Those are the difficult decisions.”
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