The Prior Lake-Savage Area Schools finance director presented a revised final budget that includes several revenue and expenditure adjustments and a projected use of fund balance under the proposed numbers.

Key figures cited by the administration included a recommended $3,400,000 increase to special-education revenue based on a recalculated state formula, about $235,030 in additional federal grant revenue carryover, and salary-and-benefit refinements near $280,000 tied to post-budget staffing actuals. Transportation expenses were adjusted upward (the presenter referenced a 5.3% increase over prior-year actuals), and the proposed revisions resulted in the administration's projection that the revised budget would show expenditures in excess of revenues for the general fund unless additional adjustments are made.

Several board members pushed back, asking whether the adopted plan's previously identified use of restricted funds (approximately $982,438 in the adopted budget) would now be replaced by draws on unassigned fund balance. One director said approving a revised budget that relied on unassigned fund balance below the board's fund-balance policy would be "irresponsible spending" and potentially in violation of board policy. The finance director said the revised numbers are intended to be conservative and offered to prepare a one-page comparison of the adopted and revised budgets, including restricted versus unassigned fund-balance impacts.

Why it matters: the board's fund-balance policy aims to maintain an unassigned fund balance at a target level (the auditor-cited figure was 7.6%, with an 8% target noted in policy). Using unassigned balances beyond policy levels raises concerns about the district's ability to respond to contingencies and could affect future levy campaigns.

What happens next: the finance director will prepare an updated, easy-to-read comparison of the adopted and revised budgets with a breakdown of restricted vs. assigned vs. unassigned fund balances and return to the board. Formal action on the revised budget is scheduled for the January 12 board meeting; no final vote was taken at this study session.

Quote: "Your revised budget should not be a worsened condition, but I want to prove that to you," the finance director said, offering to run the side-by-side comparisons the board requested.

No formal budget adoption or vote occurred at this meeting; the board asked for more detailed breakdowns of restricted funds, proposed allocations, and the projected fund-balance effects before any action.