Linn‑Mar reviews FY24 finances; special‑education deficit grows about $1 million

At a meeting on Oct. 28, 2024, the Linn‑Mar Community School District presented its unaudited FY24 year‑end financial review and highlighted a growing special‑education deficit.

Jonathan Galbraith, the district’s chief financial operating officer, told the board the district recorded just over $144,000,000 in total expenditures for FY24 and that roughly 60% of expenditures are staff costs, with salaries accounting for the largest share. He noted the figures presented are unaudited and may change slightly after auditors complete their work.

Galbraith said the district’s general fund — funded primarily by state aid and property taxes — totaled about $104,000,000 and that overall revenues were up roughly 4.8% from FY23 while expenditures were down about 0.4%. “This is the first time in 3 years that we’ve had that,” he said of the modest growth in the fund balance.

But Galbraith flagged the special‑education supplement as an area of concern. Revenues in that supplement were down about $250,000 and expenses rose about $800,000, producing an increase in the special‑education deficit of roughly $1,000,000 from FY23 to FY24. “Our deficit did grow, roughly a million dollars from FY23 to FY24,” he said.

District staff attributed part of the revenue decline to lower Medicaid reimbursements (about $640,000 less this year) and to changes in tuition‑in receipts. Special‑education staff said an additional factor this year was that parents were required to recertify Medicaid eligibility for the first time since 2020, which reduced the number of billable months for some students. “We are obligated by state and federal regulations to bill for Medicaid,” a district special‑education staff member said, describing steps the district is taking to identify students with billable services and obtain parental consent where appropriate.

Board members pressed for more detail on revenue drivers and asked how much Medicaid recertifications would affect the shortfall. Galbraith said Medicaid billing alone would not erase a multi‑million dollar special‑education deficit but would move the district in the right direction; he estimated prior annual Medicaid collections at approximately $1.3 million.

The presentation included fund‑level details: PPEL and SAVE levies for capital projects, the PEARL levy for public recreation projects, the management fund (which covers insurance and early‑retirement costs), and enterprise funds such as nutrition and the Aquatic Center. The nutrition fund posted lower revenues and a higher year‑end balance driven by reduced meal counts after pandemic‑era universal free meals ended; Galbraith noted USDA guidance limits nutrition fund balances to roughly three to six months of expenditures and said the district is exploring allowable equipment purchases and state waivers to spend the balance down.

Galbraith emphasized the district’s solvency targets and said the board’s policy goal is to maintain a solvency ratio above 7%. “We had some hope we would do a little bit better than that, but we are on the right track,” he said.

Next steps: administration said it will continue to dig into special‑education revenue drivers, Medicaid recertification effects and fund‑balance strategies and will report back with more detailed breakdowns and options for addressing the deficit.