Board reviews preliminary 2026‑27 budget: $4.1M adjustments, 8.8% projected unassigned fund balance and enrollment decline

Director Ryder presented the district’s preliminary 2026‑27 budget and a five‑year projection that outlines three scenarios for the board to consider.

The budget memo highlights approximately $4.1 million in targeted adjustments (mix of revenue and expenditure changes) and a projected unassigned general‑fund balance of about 8.8% under the stated assumptions. Ryder said the district is modeling a decline of roughly 125 average daily membership (ADM) across early childhood through grade 12 and expects health‑insurance premiums to increase sharply in the coming year (Ryder used a 13% single‑year increase in next‑year assumptions, then modeled a 10% ongoing increase for projection purposes). The district also flagged a recurring special‑education cross‑subsidy it estimated at about $5 million annually under current law and reporting practice.

Ryder walked through fund details: most district operating functions remain in the general fund while the food service fund shows a modest projected increase (about $103,004) aided by state coverage of free meals; community education is planning a spend‑down (about $520,008.60) to prepare program space at a new educational services center; debt redemption remains restricted to principal and interest payments. He emphasized statutory restrictions on certain revenue streams and how transfers between unrestricted and restricted line items are used to balance program needs.

Three scenarios in the five‑year appendix compare (a) renewing the existing referendum; (b) a revoke‑and‑replace operating referendum at about $1,003.86/APU with inflation; and (c) a larger revoke‑and‑replace at $1,007.41/APU with inflation. Ryder noted the timing when the district could dip below its 8% fund balance target and when it might cross the statutory operating‑debt threshold under each scenario. He also pointed out that the district’s projected FY27 unassigned fund balance includes adjustments for contractual obligations and planned set‑asides, and that final adopted budgets will be revised after the July 1 start of the fiscal year and the audit.

Board members asked for clarifications about secondary class‑size averages (Ryder agreed to revise the secondary core average to 34), the composition and timing of equipment leases and copier replacements, and the treatment of special‑education and English‑learner revenue coding. Ryder said MDE revenue calculations and cross‑subsidy policy remain a source of uncertainty and that the administration intentionally took a conservative approach in forecasting. Directors also asked for the detailed, line‑item workbook used previously (the administration said it would determine the will of the board about recreating that level of detail).

What’s next: staff will refine the memo and appendices for June 8 so the board can consider the adopted budget resolution and any referendum certification materials. Ryder noted the adopted budget resolution in the packet will be on the June agenda for final approval.