While most of Tuesday’s Minneapolis Public Schools Board of Education Finance Committee meeting was spent reviewing the district’s pro forma financial projections, the committee also covered the timeline for preparing the 2023-24 school year budget, voted to send another amendment to the 2022-23 budget to the full board, and shared farewells to departing committee members.
By an unanimous vote, the committee voted to move to the full board a resolution to certify the property tax levy.
At the December 13 board meeting, the board will vote on the approval of the property tax levy payable in 2023. As in previous years, the board has certified the maximum levy amount allowed under state law. This year the levy will total $244 million.
The finance committee voted unanimously to send a budget amendment to cover increases in transportation and food service costs to the full board for consideration.
The resolution, if approved by the full board, will utilize $16.5 million in ESSERIII (COVID) funds to cover a 50% increase in transportation costs over budget for the 2022-23 school year. According to Senior Finance Officer Ibrahima Diop, the district owns 40% of the buses that service the district, and contracts out the other 60% of services.
The cost increases to transportation are a result of high inflation.
For the past five years, all increases were limited to 2.5% under previous contracts, according to Diop. Because of new contracts, “prices are now reflective of where we are really because of inflation. That is the reason why we need $16.5 million to add to transportation,” Diop said.
At the end of October, the food service fund currently has a negative balance of $3.5 million.
Pandemic-related federal assistance for food service programs ended recently.
“We don’t get those same levels of reimbursements that we were getting during the pandemic,” Diop said. “Now it’s much less. Not only that but the declining enrollment that we talked about also leads to less revenue.”
Diop explained that if there is any food service deficit, general funds will be used. The finance department has been working with food service to develop a plan to return to a positive fund balance within three years.
If approved by the full board on December 13, the budget amendment would utilize $5 million in ESSERIII funds to cover the current food service fund balance, as well as expected future deficits.
At the meeting, Director Sharon El-Amin asked whether some of the food service deficit was attributable to families not applying for free and reduced price meals.
Roethke responded that the district has seen an increase in the proportion of students qualifying, partly because the district is participating in a state pilot that uses Medicaid qualification to automatically enroll students. He also noted that the district has used other methods to qualify students, such as qualifying all MPS students living in the same household even if an application was submitted for just one student.
Diop noted that his colleagues nationally have shared that the decrease in food service reimbursement is a challenge for districts across the country.
“We are hoping that some of it would be provided by the federal government again, but the chances of that are slim,” Diop said.
El-Amin asked what transportation savings had been realized as a result of implementing the Comprehensive District Design.
“Regarding the CDD, it’s really hard to gauge the savings we’ve seen in transportation because there were a lot of other factors that have contributed,” Budget Director Thom Roethke said. “We’ve had driver shortages, vacancy rates. So it’s really hard to do an apples-to-apples comparison.”
The CDD is anticipated to result in $7 million annual savings in transportation costs.
Budget timeline for 2023-24 school year will be similar to the timeline in previous school years.
At the December 13 Board of Education meeting, the board will hear the annual audit report. When the audit report is accepted, this will conclude the 2021-22 budget cycle. At this meeting the board will also vote on a resolution to approve the property tax levy for the 2024 fiscal year. As in previous years, the board has elected to set the levy at the maximum amount allowed by state law.
Starting in January, the finance department will begin preparing department budgets. As noted by Director Jenny Arneson, at the January 17, 2023 finance committee meeting, it is typical for the board to vote on a set of values to guide the budget process.
Schools will receive their 2023-24 budget allocations on February 13, 2023, and administrative departments will receive their allocations on February 20, 2023. Principals are expected to complete their school budgets, which the district calls Budget Tie-Out or BTO, by March 3, 2023.
During March and April the finance department reviews principals’ budgets and will submit a budget resolution to the finance committee on April 18, 2023, with the full board expected to vote on June 13, 2023. This final vote will happen after the expected end of the state legislative session on May 21, 2023, but before the state deadline on June 30, 2023 for the district to pass a balanced budget.
Departing finance committee chair Kimberly Caprini was honored by Interim Superintendent Cox with an award from the Minnesota School Board Association.
“In recognition of your dedication to board service, to MPS, and to your professional growth and development in this work, I am honored to present you with the Minnesota School Boards Association Director’s Award, which is obtained after 100 or more hours of attendance at an MBSA meetings and trainings. So, on behalf of the Minnesota School Board Association and myself, congratulations on this achievement. We are so proud of you,” said Interim Superintendent Cox, as the meeting was coming to a close.
Caprini shared her own thanks. “This being my final finance committee meeting, I wanted to say thank you to each of my fellow committee members, Interim Superintendent Cox, and most of all, the entire finance team.”
The finance committee does not meet in December. It will meet again January 17, 2023 after the newly elected board members have been seated.