Stewartville school board directs administrators to identify $800,000–$1 million in budget alignments

The Stewartville Public School District board voted unanimously to direct the administration to identify expense alignments totaling $800,000 to $1,000,000 as the district prepares its FY26 preliminary budget.

District finance staff presented a five-year forecast showing enrollment declines, limited state funding growth and new unfunded mandates that together could push the district into statutory operating debt if no alignments are made. "I am gonna ask the board for an alignment target," the presenter said, urging the board to give administrators a dollar target so staff can prepare specific options for the board's April and June decisions.

The forecast covered fiscal years 2026–2030. Presenters said the district’s current K–12 enrollment baseline is about 1,944 students and projected to fall to roughly 1,805 by FY30, driven by local birth-rate declines. That enrollment trajectory, combined with an assumed state basic-aid growth rate of 2% in later years (and a 2.75% increase estimated for FY26), leaves constrained revenue even as expenditures rise. The presentation noted a one-time student-support aid increase next year and a planned state increase in special-education aid to 50% (from 44%), but also warned of roughly $590,000 in unfunded mandates from the 2023 legislative session that the district expects to absorb.

Staff modeled several scenarios: doing nothing would exhaust the unassigned fund balance and lead to statutory operating debt within a few years; a one-time $300,000 alignment improved near-term balances but was insufficient long term; $500,000 in adjustments kept the district out of immediate crisis but would still dip below the board’s 8% fund-balance policy; an $800,000 alignment produced a year-end fund-balance projection near 8.9% but would require renewed action in following years under current assumptions. Administrators said they cannot predict every future adjustment and will recalibrate annually.

Board members discussed a tiered approach so staff can prepare prioritized alignment options (for example, a primary $800,000 package and successive tiers up to $1 million). Board discussion stressed timeline constraints: the preliminary budget must be adopted by June 23, and staff said the finance committee and the board will consider recommended alignments at meetings in April and May, with individual staff meetings and notifications scheduled afterward. Administrators also noted that state legislative action affecting mandates or reimbursements could change the district’s calculations but may not be finalized in time to avoid staff notifications tied to contract and calendar deadlines.

Board member Mr. Laumann moved to direct the administrative team to identify alignments totaling $800,000 to $1,000,000; the motion was seconded by Mr. Ravenhorst. Roll call produced seven affirmative votes and the motion carried 7–0.

Administrators said they will return to the board with prioritized alignment options (tiered dollar packages and the projected impact on the district’s fund balance) so the board can approve specific reductions or reassignments before the June 23 preliminary budget deadline.