Albert Lea school board adopts revised FY26 budget, sets $2.6M reduction target for next year

The Albert Lea Public School District board approved a revised fiscal‑year‑2026 budget on a voice vote after hearing a detailed presentation about lower revenues tied to declining enrollment.

Paul, a district staff presenter, told the board the district’s general‑fund revenue projection is down about $264,556 from the adopted budget because average daily membership fell by about 101.9 students. He said compensatory revenue increased—by roughly $222,000 compared with preliminary estimates—and the district received an $80,000 building and cybersecurity grant, but those gains did not fully offset enrollment losses.

Paul said projected expenditures were trimmed by about $42,000 in the revised budget and that salaries and benefits remain the largest expense (roughly 78–79% of total expenditures). He highlighted accounting changes that reduced the district’s unassigned revenue, including a statutory change that requires 100% of ALC (alternative learning center) revenue to remain in a restricted fund rather than allowing a 10% transfer to unassigned funds.

After the budget presentation, the board discussed prepaid expenditures recorded as non‑spendable in class 460 (for example, multi‑year curriculum purchases and device replacement) and legislative uncertainty over reimbursement for unemployment and paid‑leave costs. Board member Dave Clatt announced an abstention earlier in the meeting on one consent item for personal reasons; the budget motion passed by voice vote.

Following the adoption, Paul presented multi‑year financial projections that assume modest state aid increases (2.69% for FY27 and an assumption near 2.1% for FY28–29) but a continuing enrollment decline that could push average daily membership below 3,000 by FY29. To protect the fund balance under those assumptions, administration recommended expenditure‑reduction targets of about $2.6 million in FY27, $2.25 million in FY28, and $2.0 million in FY29.

Superintendent Dr. Hy said the district has launched a task force to develop structural options and recommended engaging the public and school communities as part of that planning. The board approved the revised FY26 budget and asked administration to bring follow‑up materials to upcoming study sessions and the March meetings, with final budget decisions expected in June.

The board will discuss specific reduction strategies with the task force and return to the public with options; no specific layoffs or closures were approved at the meeting.