Wayzata Public Schools finance leaders told the district board at a March 3 work session that the revised FY2024–25 general fund projects approximately $3.2 million in revenues over expenditures, driven primarily by higher-than-expected student enrollment.

Scott Lesage, executive director of finance and operations, said the district revised average daily membership (ADM) used for the budget to 12,760 — an increase of 76 students from the preliminary budget — and that enrollment growth is the primary driver of the improved bottom line. “Growing enrollment is basically the big subsidizer that allows districts to continue to expand,” Lesage said.

The nut of the revision: the district expects to finish the fiscal year with a positive variance but remains cautious because ongoing cost pressures and limits on funding could change the outlook. “We know that our expenditures continue to outpace our revenues,” Lesage said, noting the FY26 formula allowance recently announced by the legislature will be a 2.74% increase.

David Drazovich, director of finance, reviewed revenue and expenditure line items behind the numbers. He said state aids are up about $1.6 million because of the higher student count and that local property-tax collections recovered from prior-year delinquencies, allowing the district to add roughly $600,000 back into levy revenue. Federal aid increased by about $1.3 million because of carryforward of unused federal grants, he said.

On the expenditure side, Drazovich said salary and benefits are down about $1.9 million from the preliminary budget because the district budgeted conservatively for new hires’ benefit elections and some new staff are enrolled in single rather than family coverage. Purchase-of-service and supplies budgets were increased to reflect actuals and inflation for utilities, contracted services and building repairs. Operating capital rose largely for planned technology purchases and furniture to support fast enrollment growth.

Special-education costs and funding were a focal point. Lesage and Drazovich described a cross-subsidy change: the district is using about $1.5 million of federal special-education dollars to pay tuition billing dollar-for-dollar and then coding those costs to state special-education funding, which generates additional state revenue. Drazovich said that shift allowed the district to “generate about 75% more revenue than it would have been the past.” Lesage cautioned that moving costs into state funding increases the district’s maintenance-of-effort obligations and can be difficult to reverse.

District staff also reviewed long-term facility maintenance (LTFM). Drazovich said the district’s typical LTFM levy is in the range of $7.5 million to $16.5 million and that an adjustment of about $5.4 million is showing up from projects delayed during 2021–22 supply-chain shortages. He said those LTFM dollars are restricted and do not affect the general fund unassigned balance.

The district reported it received about $11.8 million in federal COVID-relief funding (ESSER/CARES-era funds) since FY2021 and that remaining funds carried into the current fiscal year expired Feb. 28; staff have submitted the final survey and drawn all remaining funds. Jen Welk, student accounting manager and finance manager, said the team will finish final reporting and close out those grants.

Superintendent Dr. Anderson framed next steps in staffing and services if the financial outlook holds. She said restoring class-size relief and expanding student-support positions such as counselors remain priorities. “The elementary counselors that we’ve added in the last several years have been very well received,” Dr. Anderson said, and the district will consider targeted add‑backs cautiously because enrollment trends could change.

Facilities and near‑term capital needs were discussed as priorities tied to enrollment. Staff noted a project at West Middle School to convert about 13,000 square feet of locker‑room space to classroom space to accommodate growth at that building, which staff estimated could reach about 966 students next year if current trends continue.

Board members asked for continued transparency on enrollment trends, kindergarten registration timing, tax‑capacity effects on levy dollars and potential referendum timing. Lesage and Drazovich said the finance team is preparing three‑year projections showing multiple enrollment scenarios to help the board evaluate bargaining and any targeted spending additions. “We’ll put that (three‑year projection) together so the board will be able to know parameters and what impacts that will have,” Drazovich said.

Ending

Finance staff emphasized the combination of one‑time and ongoing factors behind the revised forecast: accelerating enrollment that increases state aid and levy receipts, continued upward pressure on special‑education costs and utilities, and the winding down of federal one‑time COVID relief. Lesage told the board the revised budget will be brought back for formal action at the district’s next regular meeting; the presentation slides and supporting materials will be posted on the district website.