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Osseo School Board adopts $349.6 million FY2027 budget, flags multi‑year adjustments
Summary
The Osseo Public School District school board on June 23 adopted the fiscal year 2027 budget for all funds, projecting $349.6 million in revenue, $367.8 million in expenditures and an $18.2 million operating deficit; board leaders said operational adjustments totaling $16 million will be phased in over the next four years.
The Independent School District 279 school board voted 6-0 on June 23 to adopt the district's fiscal year 2027 budgets for all funds, approving a general fund plan the district said includes $349.6 million in revenue and $367.8 million in planned expenditures.
John Morstad, the district's executive director of finance and operations, told the board the budget reflects a $22.3 million revenue increase driven by education-aid formula changes, special-education adjustments and higher cross-subsidy reimbursements. He said expenditures are 6.9% above the prior year largely because of planned compensation and strategic investments.
"Taken together, revenue and expenditures result in an anticipated operating deficit of $18.2 million for fiscal year 27," Morstad said in the presentation. The district projects a year-end fund balance of $87.2 million, or 23.7% of annual expenditures, which the presentation described as above the board's 5% policy minimum.
Board members discussed the plan's structural implications and long-term forecasts before voting. The district presented a five-year projection that assumes continued pressure on fund balance and calls for $16 million in operational adjustments to be phased in from fiscal year 2028 through 2031 to preserve reserves.
Directors acknowledged the district's use of fund balance to support near-term investments while warning that the trend is not sustainable. Director Sarah Mitchell said the June 9 work session had given the board opportunities to weigh trade-offs and provide direction. "We are starting to invest that money in our students and staff," she said, while urging continued prioritization.
The budget approval follows a multi-step long-range financial planning process the district said included board work sessions, LRFP advisory input and line-item development. With adoption, district staff will implement the budget and continue work sessions on operational adjustments and priorities for future years.
Votes at a glance: FY2027 budgets for all funds adopted by roll call 6-0.
