Senior Finance Officer Ibrahima Diop began the presentation portion of the March 14 board meeting with an update on the district’s finances. In measured comments, he explained to the board how the district will use part of the assigned fund balance and other sources of funding to close a $22.7 million gap between the district’s budget revenues and expenses in the 2023-24 school year. Although the budget process for schools was originally scheduled to end March 3, it was extended to March 9, and then March 13, after the recent ransomware attack on the district. District leadership indicated some schools were still submitting their final budget documents to the district on Tuesday.
In addition to an update on district finances, the meeting included a presentation on the district’s Achievement and Integration Plan. The plan was due to the state of Minnesota on March 15. Included on the consent agenda, which the board approved unanimously, were two contracts, totaling $2.3 million, for network monitoring and cybersecurity services through June 30, 2024. Like all regular business meetings, the evening started with public comments.
District Budget Update
Senior Officer Diop told the board that allocations to schools will be $41 million more next year than for the current school year. Budget allocations to schools and departments were made based on the district’s strategic plan. Diop noted that the board did not pass a resolution outlining other budget priorities, as it has in previous years. In reviewing the budget timeline, he noted the board must pass a balanced budget before the end of the current fiscal year on June 30, 2023. Fiscal year 2024 begins on July 1, 2023.
“The school district will not receive any revenue, state or federal, until that budget is approved by the board,” Diop told the board.
The district anticipates that its revenue next year will be $27 million higher than what was presented in the November 2022 pro forma financial projection. This $27 million does not include any increase in the basic per pupil formula aid from the State next year.
Most of the new revenue comes from using $16 million more one-time federal pandemic relief funds next year than previously estimated, plus a $7.2 million increase in State compensatory revenue, as more students qualified for free and reduced price lunch through a process called direct certification. Direct certification matches students enrolled in MPS with state records of individuals receiving a range of social services from the State, primarily Medicaid. This process eliminates the need for families to complete forms to qualify for free and reduced price meals.
In addition to the $29.1 million for intervention triads that the district is allocating to schools from ESSERIII, one-time federal pandemic relief funds, the district is also spending an additional $4.1 million for every school to have a half-time licensed library media specialist.
The district is proposing to add $1.5 million to school budgets to fund either an eight or sixteen hour per week part-time licensed teacher position for direct services to students identified as “advanced learners,” the district’s term for gifted and talented students. Last spring, the district cut half-time differentiation specialists that had been part of every K-5 school.
The district will not have to use its unassigned fund balance to cover its costs in fiscal year 2024. Diop explains that if the district were to use its unassigned general fund balance to cover its costs, this would lower the district’s credit rating, and increase the interest rate it would have to pay to bondholders.
There is a gap between the district’s anticipated revenue, $648.3 million, which includes the remaining ESSERIII funds, and the anticipated costs, $671 million. The district will close the $22.7 million gap in multiple ways. It will use $7 million from its assigned fund balances to cover some costs. In addition, the district will use $10 million from the sale of bonds for IT in previous years. Anticipating that there will be unfilled positions in the district next year, Diop says the district estimates this will, conservatively, save the district $4.2 million of its budgeted costs next year. In addition, the district will use a provision in the Title I federal funding law to charge for indirect costs in the amount of $1.5 million.
Diop shared an estimate of the amount of funding MPS may receive from changes to State funding for K-12 education. If the general formula is increased by 3%-- Governor Walz asked for 4% in 2024 and 2% in 2025– the district anticipates this would increase revenue for MPS by $6.1 million. Assuming the State eventually approves a bill to provide universal free lunch and breakfast to all students in Minnesota, that would offset the $5 million from the general fund that the district had to transfer to the food service fund in 2022 because of a deficit in that fund. Diop says it is too soon to know how much, if any, additional funding the district may receive from the State next year.
The district expects enrollment to decline around 3% next year. Because of this decline, the district anticipates that its federal Title I funding next year will decline by $11.6 million.
At the opening of the meeting, the board heard from district educators, parents and community members on a range of topics. Several MPS educators spoke about their request that the district renew an Memorandum of Agreement with the Minneapolis Federation of Teachers ESP chapter which added five hours of work per week to the role of Special Education Assistants (SEA) during the current school year. Without the additional hours, SEA’s are only paid during the student school day, which is typically 6.5 hours. They are not paid during the time when students are arriving at or leaving school, when they say many students need their assistance. In addition, some speakers noted that SEAs need time for prep time, collaboration and review emails.
Parents and students from Heritage High School spoke about their request to make Heritage a STEM magnet school for high school students. Currently, the district has two elementary STEM programs at Hall and Sullivan, and a middle school STEAM magnet program at Franklin. There is no high school pathway for STEM students to remain in the magnet program. The students and parents noted that the district had promised them Heritage would be made a STEM magnet school, but has not done so.
Nafeesah Muhammad, an MPS parent and member of the Racial Justice Network, spoke about the addition of the intervention triad positions and the impact it will have on district finances. In addition, she noted that her former colleagues in MPS have said that principals have been directed to ignore the contract language protecting historically underrepresented educators, outside of seniority order, from excessing.
Muhammad said that at Henry High School, 18 educators of color are being excessed, including eight covered by the collective bargaining agreement between MPS and MFT. She added that two of those positions include Black counselors. Titilayo Bediako also spoke about the contract provision protecting educators of color outside of seniority order, and asked that the district honor this provision.
Softball players from Southwest, Washburn, South and Roosevelt spoke about the lack of regulation fields to play on compared to baseball. They said there is not enough space on the benches for the team to sit together, there is no pitching circle, there are holes in the field which may cause injuries, and they must use a temporary fence. The players said they are at a recruiting disadvantage compared to suburban players because the longer fences on some fields make it harder to hit home runs.