Owatonna board approves preliminary 2026–27 budget, warns of compensatory-aid loss

The Owatonna Public School District board on June 29 approved a preliminary 2026–27 budget that shows about $85.0 million in projected revenue and roughly $85.6 million in expenditures, producing a planned $582,000 reduction in fund balance to just over $13 million.

Ms. Brent, who presented the summary, said the revenue estimate includes the district’s primary general education aid (tied to average daily membership), noting the district is projecting a decrease of 11 ADMs from the 2025–26 budget while the state formula allowance rises 2.69 percent. She told the board the budget also assumes a roughly $960,000 decline in compensatory-aid revenue.

"Overall, that's a decrease in fund balance of $582,000, bringing our beginning of year fund balance from 13.6 million down to just over $13 million," Ms. Brent said. She added that just over $10 million of that total is unassigned fund balance, equal to about 11.82 percent of budgeted expenditures.

The presentation noted that all staff contracts for 2026–27 are settled and included in the expenditure totals. Ms. Brent said the district is using some restricted fund balances in this preliminary book, which increased the unassigned balance compared with prior projections.

Board members and finance committee representatives praised a new one‑page cover sheet summarizing assumptions that accompanies the budget book. Committee members emphasized the compensatory-aid reduction as the largest single budget pressure but said prior budget adjustments limited the downside.

The board approved the preliminary budget by voice vote; the motion carried. The approved plan is preliminary and staff said figures will be updated during the revised‑budget process later this year.