Superintendent: Fridley faces a projected $8.3 million operating shortfall, cites enrollment loss from 'Operation Metro Surge'

Superintendent Dr. Brenda Lewis told the Fridley Public Schools board that the district’s statutory operating debt (SOD) module 2 projects a negative fund balance of about $8.3 million for fiscal year 2024–25, a figure she said is preliminary pending final audit adjustments and coding corrections.

“The $8.3 million is the number that we're looking at until we have the valid information to update that,” Lewis said, emphasizing that auditors and the Minnesota Department of Education will review and the final number is expected to change.

Nut graf: The district presented a multi-pronged SOD strategy that pairs conservative enrollment assumptions with targeted reductions and revenue diversification. Lewis singled out the local effects of an immigration-enforcement disruption the district calls "Operation Metro Surge," which she said has directly reduced state and federal reimbursements and raised short-term e-learning costs.

Lewis quantified some early impacts: $131,000 in lost federal meal reimbursements to date because students in virtual learning were not on campus for USDA meal reimbursement eligibility, and roughly $75,000 in incremental monthly e-learning costs (staff substitute pay and additional planning time). She also reported the district is tracking a net enrollment decline relative to the statutory October 1 count (she referenced an earlier 112 students lost and said the district was currently about 75 students below the Oct. 1 count).

District leaders said several factors will alter the final SOD figure: the pending audit, correction of accounting coding errors, and revenue that begins flowing from referendum questions (which become accessible to the district July 1). Lewis noted that the district’s $70 million budget is driven largely by state aid and explained limits on property tax levies tied to referendum caps.

Board members pressed about operational consequences and staff well-being. Responding to a question about social workers and staff supports, Lewis said, “Our folks are exhausted,” describing heightened mental-health demand and life-support tasks staff performed for families during the enforcement events. She said the district is coordinating with outside partners to expand support beyond the employee assistance program.

The district said its SOD plan assumes conservative enrollment trends (holding to the October 1 count) and pursues revenue diversification measures—examples cited included a local "setting 4" program to reduce tuition sent to intermediate districts and solar rebates and sponsorships to supplement general revenue.

Lewis also reviewed cash-flow tools available to Minnesota districts, including aid anticipation certificates (short-term, state-aid–backed loans), and explained why a mismatch in the timing of state aid receipts and operational expenses can create short-term borrowing needs.

The board received the presentation; monthly monitoring and audit updates were promised. Lewis said the district will continue reporting adjustments to the five‑year projections after audit completion and will bring any necessary plan changes back to the board for approval.

Ending: The board did not take a separate vote on SOD module 2 tonight; Lewis said the board had already approved the overarching SOD plan in January and will continue monitoring progress in monthly updates and at future business meetings.