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Rochester, MN (KROC AM News) - The Rochester School Board will consider a list of administration budget-related recommendations at its Tuesday evening meeting.

The district is facing a projected structural budget deficit of $23-million and the recommended plan would deal with the shortfall over a three-year period.

 A large part of the gap would be filled through the use of $9.3-million in Covid funding. The plan also recommends using $4.3-million from the fund balance, which would leave the district with a 9% budget reserve.

Another $7-million in projected savings would be made through accounting shifts, reduced services, and numerous personnel moves, some involving vacant positions. That list was reviewed by the board last month.

Recommended Resolution
We recommend that the RPS School Board adopt a resolution that directs the administration to develop a proposal for the school district’s 2022-2023 General Fund budget that includes the following components:

  • 1. Use of $9.3 million in federal Covid funding to maintain critical services to students during and following the pandemic
  • 2. Use of $4.3 million of the school district’s fund balance, which would leave the district with a 9% budget reserve
  • 3. Delay the transfer of $0.8 million into the OPEB health insurance savings account. All retirees would still receive full benefits despite this temporary pause in contributions to the account.
  • 4. Delay the transfer of $0.2 million into the GASB16 unused sick time severance savings account. Again, all retirees will still receive full benefits despite this temporary pause in contributions to the account. 
  • 5. Cancel the following three facilities leases to save $0.2 million: the Gage East facility for girls’ gymnastics, the Boys & Girls Club site for Middle School Right Fit, and the building at 415 South Broadway, which currently houses the INCubatoredu program. As is noted below, we recommend discontinuing the INCubatoredu program. Girls gymnastics and Middle School Right Fit would move to the current Friedell Middle School site for at least the 2022-2023 school year.
  • 6. Make reductions $7 million in the General Fund budget as outlined below with the potential to revise the specific reductions as long as the total level of $7 million in reductions is achieved.

Interim Superintendent Kent Pekel included this note in the information he sent to the RPS Board:

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The strategy that the School Board selected on February 8th is the focus of this memo, and that strategy will be the focus of the School Board’s discussion of and, we hope, vote on a resolution on the district’s 2022-2023 budget at its meeting on February 8, 2022. We recommend that the School Board vote on such a resolution because while board members have discussed the development of this strategy at multiple recent meetings, the board has not yet taken formal action on the strategy at a regular meeting. We believe that such formal action is essential given the seriousness of the district’s financial situation and the unavoidably difficult decisions that lie ahead.

It is important to add that while we recommend that the board approve a resolution outlining a broad strategy for the 2022-2023 budget at its meeting on February 8, approval of that resolution at next Tuesday’s meeting would not, in fact, constitute approval of the 2022-2023 budget itself. Rather, that resolution would shape the process of planning the 2022-2023 budget, which must begin almost immediately following the School Board meeting on February 8 in order to present the board with a detailed budget proposal for consideration and action at the School Board meeting on June 21, 2022. If significant problems with making any of the budget reductions outlined below or alternatives to those reductions are identified through the budget planning process in the months ahead, the administration’s budget reduction proposal would be revised to address those concerns or to incorporate those alternatives. It is important to stress, however, that while changes could be made in the specific budget reductions that the School Board will vote on in June, the cumulative savings from those reductions would still need to meet or exceed $7 million to put the school district on the path to sustainable fiscal stability.

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