Elkhorn Area School District projects multi‑million dollar shortfall; board outlines phased savings plan

At a budget retreat on April 30 in the Dewey Room of the 1887 Building, district administrators presented a fiscal forecast that they said shows a material operating shortfall next year and outlined a multi‑year, phased plan to close the gap.

Unidentified Speaker (S3), the meeting presenter, told the board the district’s “base forecast” assumed wages would rise roughly 3 percent, health‑insurance costs about 6 percent and a conservative 5 percent reduction in some federal grants. Using those assumptions, staff said the district initially estimated a budget deficit “of about 3,400,000.0” but that updated figures reduced that headline gap by roughly $1.3 million compared with earlier runs.

The presentation reviewed how state and federal choices would affect the district. Staff summarized the governor’s K‑12 proposal, which they said would increase special‑education reimbursement substantially (the presenter described a move from the current ~30 percent toward 60 percent reimbursement) and raise per‑pupil aid (presenter cited a current per‑pupil figure of $742, proposing $800 the next year and a further increase thereafter). The presenter also described a proposal to link allowable revenue‑cap increases to the Consumer Price Index.

Staff emphasized uncertainty. They said federal grant reimbursements are paid after districts spend and file claims, DPI has encouraged more frequent filing to secure reimbursements, and pending court or legislative actions could alter the state budget process. Citing those unknowns, Unidentified Speaker (S3) told the board the district is planning conservatively.

To bridge the projected gap, staff recommended a phased approach rather than a single‑year set of abrupt cuts. The options outlined include: pursuing roughly $2.5 million in combined expense reductions and new revenues over two years (including roughly $490,000 shifted to Fund 80), targeted attrition and position realignments, modest increases to select student fees and program reclassifications that would move certain community‑oriented positions out of the general instructional fund. Staff also showed a scenario in which the district used available cash to prepay callable debt obligations, which staff estimated could save taxpayers more than $500,000 in interest over time if pursued carefully and with voter/taxpayer impact in mind.

Board members asked staff to return with more detailed, written proposals: a plan to implement Fund 80 transfers that meets auditing criteria, a prioritized list of positions for attrition, an itemized fee schedule with peer comparisons, and a bus‑route consolidation plan that avoids creating unsafe or inequitable walk zones for students. Staff said they will present those details at a follow‑up session before any formal contract or policy changes are adopted.

The board did not take formal motions or votes at the retreat; instead it directed staff to develop the specifics of the scenarios presented and to bring more granular recommendations to a future meeting.