Faribault board adopts FY27 budget, flags enrollment decline and $1.7M shortfall

The Faribault Public School District board voted June 15 to adopt its FY27 proposed budget after an extended presentation and discussion of enrollment declines, revenue changes and planned reductions.

The board approved the budget following a presentation from district finance staff, who projected average daily membership at 2,970 students and estimated the district would begin FY27 with about $11.2 million and end the year with approximately $9.47 million — a drop driven in part by an anticipated $1.7 million deficit in the general fund. Finance staff said the net effect reflected a 2.7% increase in the general education funding formula (about $1.3 million) offset by a near $300,000 decline in compensatory funding and other rising costs, including a roughly $2 million projection for negotiated contract settlements and a $680,000 increase in transportation costs.

"We are projecting a starting balance of about 11.2 million. Our expenditures will exceed our revenues by about 1.7 million," said Ms. Raceler, the district finance presenter, describing the assumptions and multi‑year projections the board reviewed.

Why it matters: Board members repeatedly tied the budget trajectory to enrollment trends and state funding shifts. Directors pressed staff on the mechanics of long‑term facilities maintenance funding, potential sale proceeds from the ALC building, and whether current reductions are deep enough to stabilize future years. Director Wolf said an anticipated drawdown would require additional reductions next year but that earlier cuts can reduce future pain. Director Budro urged measures to slow enrollment declines, including attention to academic outcomes and community engagement.

The board approved the budget by roll call (motion passed; vote recorded in meeting actions). Ms. Raceler noted that the district plans to use a portion of operating capital to offset long‑term facility maintenance shortfalls and that the district expects to spend down certain restricted funds in line with Minnesota Department of Education timelines.

Next steps: Staff said they will return to the board this fall with more detailed proposals for further reductions and site‑level adjustments, and the board signaled it expects to continue close monitoring of enrollment and revenue updates during the coming budget cycle.