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Albert Lea staff present revised FY25 budget showing $1.7M revenue gain but $2.37M higher expenditures; board to consider approval March 17
Summary
Finance staff told the school board a revised FY25 budget reflects a $1,711,576 revenue increase tied largely to higher enrollment but also $2,372,337 in expenditure increases, leaving an approximate $660,761 shortfall; the district will seek board approval of the revised budget at the March 17 regular meeting.
District finance staff presented a revised snapshot of the Albert Lea Public School District’s fiscal‑year 2025 budget at the study session and said increased enrollment has added revenue but expenditures—driven by salaries, substitutes, capital purchases and contracted food service—now exceed revenue by about $660,761, a shortfall staff said the district must manage before final adoption.
Mr. Durban, district staff member presenting the budget, told the board the district increased its average daily membership (ADM) projection by 141 students for the revised budget. “The important number here is $1,711,576,” he said, describing the increase in general education state aid tied to the additional ADM. He warned, however, that total revised expenditures rose by $2,372,337, producing a gap between revenues and expenditures if no additional reductions or adjustments are made.
Key figures presented by staff included an estimated $1,509,450 increase in general education aid after enrollment adjustments, smaller adjustments to basic skills and special education revenues, and an overall revenue increase of $1,711,576. On the expenditure side, staff cited larger licensed‑staff salary and benefit costs, additional hires, higher substitute costs, increases in nonlicensed support staff, and capital purchases previously funded by ESSER funds. The presenter summarized the net effect as a roughly $660,761 decrease to the unassigned general fund balance compared with the adopted budget.
Food service also drew attention. The district participates in the Community Eligibility Provision (CEP), a federal meal program, and contracts food service operations to Chartwells. Staff said the food service fund carried a fund balance approaching six months of operating costs; Minnesota Department of Education rules require a spend‑down plan if the balance exceeds six months. To reduce the balance, the revised budget increases food service capital expenditures by $415,000 to purchase cafeteria furniture and high‑school equipment; staff projected a food service year‑end fund balance of about $401,506 after those purchases.
Staff noted the district’s federal ESSER pandemic funds expired this fiscal year, reducing federal aid compared with prior years, and warned of ongoing pressures from mandates, paid leave and unemployment insurance costs, and gaps in state compensatory and English learner funding. Staff said restricted grants added both revenue and matching expenditures, so the net budgetary effect of some increases was neutral.
Mr. Durban told the board the revised budget table that staff distributed will be an action item at the March 17 regular meeting, when the board will be asked to approve the revised FY25 budget. He encouraged board members to review the packet, ask follow‑up questions, and noted the finance committee has met and will present a three‑year fiscal forecast and recommendations for potential reductions. Staff said the district will continue individual briefings with board members, and the district will present the adopted FY26 preliminary budget in June.
