McFarland board hears audit progress, approves budget adjustments and fund-balance designations

Jeff Mahoney, the district business manager, told the McFarland School District Board on Aug. 4 that the 2024–25 audit is under way and that preliminary financial results leave the district “just over 14 and a half million” in fund balance. He said the audit presentation may arrive in November or December and that staff will present a revised levy and final budget after state aid and equalized values are certified in October.

Mahoney framed why the figures matter as the board prepares for its annual meeting and tax-levy decisions. "We will in September get into doing the annual meeting notice, and talk about the budget hearing that will be, on October 20," he said. He also warned that some revenues are variable: interest earnings and virtual-school oversight fees have been higher than budgeted but are not guaranteed going forward.

Board members were presented with two action items tied to the fiscal-year closeout. The board voted to approve the attached 2024 budget changes and then approved an administrative recommendation to designate unused 2024–25 funds as restricted fund balance for the 2025–26 school year. Both motions were moved, seconded and carried in open session.

Mahoney gave several specific figures to explain the districts position. He said interest earnings were about $450,000 above budget for 2024–25 and proposed budgeting a higher, but still cautious, interest estimate next year. He reported that virtual-school oversight fees had grown in recent years; the district budgeted $1.4 million for those fees in 2024–25, received $1.963 million, and Mahoney proposed a $1.7 million budget estimate for 2025–26 acknowledging that state policy could change. He also said the districts revenue cap is roughly $33 million, with equalized aid near $15 million and the tax-levy portion of the revenue cap for funds 10 and 27 near $17.6 million; separate debt-service levies are about $4.6 million.

On planning and risk, Mahoney recommended cautious use of one-time revenues. "Fund balance did not take a hit at this point for 2425, confident of that," he said, and added that one-time earnings can be used to reduce debt service and therefore lower taxes for a single year, but should not replace ongoing operating revenues.

The board also discussed timeline items: a posting meeting on Sept. 15, the districts enrollment (third Friday) count in September, equalized-value information from the Department of Revenue on Oct. 15, and the annual meeting on Oct. 20. Mahoney said a packet with updated figures would be provided to the board a week before the Sept. 15 meeting.

Formal actions recorded during the meeting included approval of the consent agenda (4-0, with one member not yet logged in), approval of the 2024 budget changes, and approval of the recommended fund-balance designations for 2025–26. A closed session to discuss personnel matters under statutory authority was then called and the board moved into closed session by roll call.

The board's materials and the business managers presentation will form the basis for the October budget hearing and any revised levy the board adopts after state aid and equalized values are finalized.