Moorhead Area Public Schools approves revised FY2025 budget, highlights $5 million LTFM transfer and reduced unassigned fund balance

The Moorhead Area Public Schools Board of Education on Feb. 10 approved a revised fiscal year 2025 budget after a presentation by district finance staff detailing revenue adjustments, expenditure changes and the district's current fund-balance position.

Cam William Bach, who presented the revised budget, told the board that the FY2025 revisions include both downward and upward adjustments across revenue lines and noted the district is also projecting through FY2026–FY2028 for planning purposes. “The highlighted column is your FY 25 revised budget,” Bach said as he walked the board through line-by-line changes.

The revision reduced projected property-tax revenue by about $200,000, shown as a levy adjustment, and cut local-source revenue by about $300,000 primarily because Medicaid (medical assistance) reimbursements were higher in FY2024 than expected. Bach also cited a drop in Medicaid reimbursement rates — “the Medicaid rates dropped from 60 to 51% after COVID” — as a factor in the local-revenue adjustment. At the same time, the district increased its general education aid projection by roughly $1.7 million based on a December MARS enrollment update that raised average daily membership by about 150 students.

Other revenue changes Bach listed included a projected $740,000 increase in special-education aid, an expected $120,000 increase in federal grants (including Title awards), and an increase in student-activity revenue separated out on its own line and projected at $700,000. On the expenditure side, the board heard about staff- and trend-driven increases in administration (+$300,000), regular instruction and vocational programs (+$1,180,000, including a previously omitted pension expense), instructional support (+$800,000, partly for Chromebook purchases formerly paid with ESSER funds), and pupil support (+$600,000). Building-and-grounds costs were adjusted downward by $380,000 to better match FY2024 actuals.

Board members pressed for clarity about how certain revenue sources are categorized. When asked where fees such as participation or gate fees belong, Bach said those are recorded under local sources. The presentation also separated operating capital from LTFM (long-term facilities maintenance); operating capital was increased by $50,000 in the revision while LTFM was reduced by about $200,000 in the projection.

Bach reported a notable change in the district's unassigned fund-balance percentage: the FY2025 adopted budget had shown 2.23% unassigned as a percent of expenditures, while the revised calculation shows about 0.39%. He explained the difference was driven by an accounting reclassification discovered during the FY2024 audit: a one-time $5 million transfer that had been sitting in operating capital was reassigned as assigned for capital projects so it no longer masks an operating deficit. “During our FY 24 audit, we had $5,000,000 from one-time transfer of our LTFM to operating capital... we moved it out to be an assigned for capital projects separate from operating capital,” Bach said.

Board members discussed the practical effect of that reclassification and the importance of an eventual authorized transfer (pending separate legislation or approval) to shore up the unassigned balance. Trustee comments emphasized the role of that transfer in improving the district’s starting fund balance for future years.

The board voted to approve the revised FY2025 budget. The motion was moved by Melissa (board member) and seconded by Keith (board member); the approval was by voice vote with the chair announcing the motion carries.

Board members were told the packet contains the full slide detail, and staff said they will provide follow-up data to any specific member requests.

The district’s finance staff emphasized that the FY2025 numbers as approved did not yet include cost-containment scenarios staff are preparing separately.