Albert Lea board approves FY26 final budget, signs off on FY27 preliminary forecast

The Albert Lea Public School District board voted unanimously to approve the district's final fiscal year 2026 budget and later approved the FY27 preliminary budget after presentations from district finance staff.

Finance presenter Paul Durban told the board the district's spending and revenue projections for FY26 are close to expectations and that the independent audit this fall will produce final results. "We have five main funds," Durban said, describing the general, food service, community service, building construction and debt service funds and the projections behind them.

Durban highlighted that state aid still constitutes the majority of district revenue and that instruction and student support account for more than 80% of expenditures. He reported year-to-date districtwide utility spending of $784,430 (vs. a budgeted amount discussed in the packet) and flagged rising contracted services and activity-supplies costs that are outpacing offsetting revenues and donations.

On the FY27 preliminary budget, Durban said the district built in several conservative assumptions: a 2.7% increase to the basic formula set by lawmakers, a cautious kindergarten ADM adjustment (reduced to 180 because current kindergarten registration is lower than expected), health-insurance and utilities inflation, and a 5.1% assumption for contracted transportation. He also pointed to projected increases in compensatory and English-learner aid (including an EL cross-subsidy boost) and noted that ALC coding changes require 100% of ALC revenue to flow to the ALC fund rather than being skimmed to unassigned.

Under those assumptions the preliminary FY27 budget projects a fund-balance level roughly consistent with the board's 12% policy (Durban cited a projected 12.31% ending fund balance), but he warned that many inputs could change when fall enrollment, levy certification and the audit are finalized. The board approved both the FY26 final budget and the FY27 preliminary budget by recorded votes (final FY26 approved unanimously; preliminary FY27 approved unanimously).

The district will receive an external audit in the fall that may adjust final FY26 figures and the administration said the next finance director will have a pivotal role in monitoring the many FY27 assumptions.

What happens next: the district will complete the audit in the fall, begin levy discussions in September, and revise budgets after official enrollment and levy data are available.