Mahtomedi board begins budget-reduction planning; administration recommends $1 million fund-balance use and a range of cost options

The Mahtomedi Public School District board on Monday reviewed a midyear financial report and discussed parameters for budget reductions for the 2025-26 fiscal year, with administration recommending limited use of fund balance alongside targeted reductions.

Superintendent Tim and finance staff presented midyear figures showing the district had collected typical shares of state and property-tax revenue and was tracking above last year in total receipts. Finance staff reported the district had received about 45 percent of budgeted revenue year to date, versus 42 percent at the same point last year; property taxes were approximately 91 percent collected as expected.

Nut graf: With an anticipated budget gap for 2025-26, administration recommended using roughly $1 million of fund balance (while remaining above the boards 8 percent minimum) combined with targeted reductions. Topics discussed included elementary class-size caps, transportation and activity efficiencies, reductions in low-enrollment secondary courses, substitute staffing costs, open-enrollment limits tied to physical capacity, and capital investments to lower operating costs.

Board members and staff discussed trade-offs. Finance staff said the districts unassigned fund balance was about 12.2 percent as of June 30, 2024, and that dipping by $1 million would keep the district above the 8 percent policy minimum for the upcoming year. Directors emphasized preserving classroom staff and minimizing direct impacts on students, while acknowledging the possibility of spreading smaller reductions across multiple areas.

Specific reduction options discussed included: - Increasing elementary class-size guidelines by roughly one student per grade to align with pre-pandemic metro averages; rough savings estimated at several hundred dollars per additional seat (administration estimated about $700 per added seat in back-of-envelope math). - Reviewing low-enrollment secondary courses and electives to avoid running sections with very small enrollments; reductions could allow elimination of teaching FTEs if multiple low-enrollment sections are cut. - Targeting transportation efficiencies for activities (for example, providing one-way transportation for nearby events and relying on family pick-up) and evaluating activity stipends where participation is low. - Curtailing some in-day substitute use and reducing nonessential travel or professional-development days that require substitutes to relieve substitute-cost pressure. - Continuing to accept open-enrollment students only where doing so does not require additional instructional space and keeps class-size parameters within adopted limits.

Directors asked for dollar estimates and multi-year projections for each option before making decisions. Several board members urged caution about increasing elementary class sizes because of educational impacts; others said fund balance exists for precisely this purpose and favored limited use to blunt deep classroom cuts.

The board directed administration to bring a list of reduction recommendations with dollar amounts to the February 10 study session and to return formal proposals for board action later in February. The conversation will inform the budget revision the administration plans to present.

Ending: The board signaled preference for a mix of fund-balance use and targeted operational changes that minimize classroom staffing reductions; administration will present quantified options at the next study session.