Board hears first reading of 2025–26 budget amendments and preliminary 2026–27 budget showing tighter margins

At a regular meeting, the Milan Area Schools Board of Education received a first reading of the district's final 2025–26 budget amendment and an initial presentation of the preliminary 2026–27 budget.

Superintendent McMahon turned the presentation over to finance staff member Miss Hendricks, who said the final 2025–26 amendment increases revenues by $766,000 and increases expenditures by $207,000, producing an estimated fund balance of about $2.6 million, or roughly 7.32% of fund balance. "We're increasing our interest revenue by 15,000," Hendricks said, and she pointed to state special education adjustments (about $500,000) and other items that produced the net change.

On the preliminary 2026–27 budget, Hendricks presented conservative assumptions that drive a projection of $31.7 million in revenue (a $3.3 million drop from 2025–26) and $33.6 million in expenditures (a $2.2 million drop), which together leave a projected ending fund balance of $708,939, about 2.1% of expenditures. "Please bear in mind these are preliminary numbers with a lot of guesses made by Krista as to how the state funding is going to come in and what our count is going to be," she told the board.

Hendricks listed the assumptions behind the projection: a $250 per‑pupil foundation increase assumed from the governor, House and Senate proposals; an estimated loss of 30 students from the February 2026 count; carryover/grant uncertainty; budgeting full FTE for certain CTE positions and only partial FTE for others; a 0% across‑the‑board wage increase for non‑scale staff while retaining calculated increases for staff on salary scales; increased health‑insurance costs; and elimination of three certified staff positions that were built into the draft budget.

Board members questioned several details. One member asked whether the total fund‑balance spend for the fiscal year is anticipated at $848,000; Hendricks confirmed that figure. A trustee highlighted that the board's stated goal is a 10% fund balance and noted that when assigned balances for specific funds (for example the PECC assignment) are removed the effective unassigned fund balance may be nearer to 5.8 percent. Another member pressed for clarity on which fund‑balance metric the board should hold as the target.

Hendricks also reviewed debt and sinking funds, noting that the 2018 debt will be paid in fiscal 2030 and the 2019 bond obligations in 2035, and that rollback effects had reduced sinking‑fund mills while holding roughly the same dollar yield for the district. She said the food service fund is intentionally drawing down an excess balance to meet federal carryover rules and that the student activity funds (about $600,000 historically) are internal and do not affect the general fund.

Superintendent McMahon and board members emphasized next steps: the 2025–26 amendment is a first reading and the board will vote on the proposed amendments at its June 3 meeting. The board also reiterated the legal requirement to pass a balanced budget by June 1, and members asked staff to continue refining state‑aid estimates as the state budget process unfolds.