Keeping tabs on a school district’s budget under normal circumstances is tough enough, but add in a major unknown such as a pandemic, and it becomes even tougher. Despite all of the financial curveballs over the past year, Cambridge-Isanti Schools has emerged pretty much where they were expecting, according to Director of Finance & Operations Chris Kampa.
“Last year we passed a budget that was right at the beginning of a global pandemic,” Kampa told the Cambridge-Isanti school board at its Feb. 18 meeting. He presented revisions to the preliminary budget, which is customary once the prior fiscal year has closed.
“There are a number of changes,” he said, “but I think the headlines are that COVID has impacted our budget significantly, but we’re still showing that we predict to come out ahead in all this, that we will add to our fund balance, which – given the significant challenges we face – that’s a major victory.”
In his presentation, Kampa broke the fund apart into four separate units for ease of understanding: general operations, transportation, facilities and student activities. He also covered other governmental funds: food service, community service and debt redemption fund.
Food service and community service funds are considered separate entities because they are intended to be self-sustaining based on the revenues they generate. The debt redemption fund is used to pay debt service on the district’s bonds.
REVENUES SEE OVERALL INCREASE
Kampa grouped general and transportation revenues together on one slide (available at c-ischools.org under Feb. 18 school board agenda materials). Revenues for the district come from four sources: local property taxes and fees, other local sources, state and federal.
Local revenue was originally projected at $4.7 million, but Kampa readjusted it lower by about $91,000 to $4.6 million.
“We are getting less miscellaneous taxes and fees from the county,” he said. “That’s just my expectation because we have less economic activity due to COVID.”
Kampa said there is also less income from admission tickets to sporting events and less rental of district facilities by outside parties.
He did note the sale of the bus garage in Isanti brought in $136,000, plus additional revenue gained from a legal settlement earlier this year.
Revenue projected from the state is down by about $1.9 million due mainly to lower enrollment – the district has 244 fewer students than originally projected, Kampa said.
“Everyone (around the state) is down,” he said. “Last month we did stabilize – we added 13 students. That’s not a lot, but that represents the first month we stopped losing enrollment and actually grew.”
Kampa said there was an increase in federal revenues of $2.1 million, due to an increase of $1.2 million in Coronavirus Relief Funds (CRF) and $840,000 in Governor’s Emergency Education Relief (GEER) and Elementary and Secondary School Emergency Relief (ESSER) funds, bringing the projection of federal revenue to $3.7 million.
“Overall, we’re projecting an increase in revenue for these two parts (general and transportation) of $716,000,” he said. “That’s the good news.”
EXPENSES INCREASE DUE TO COVID
“The bad news,” Kampa continued, “is we’re seeing an increase in expenses as well.”
The district hired 12 additional cleaners for buildings and grounds to meet the demands of sanitizing for COVID protection, which was an unexpected expense.
Another line item not even conceived in the preliminary budget is nearly $1.5 million added for non-labor COVID items such as cleaning supplies, pandemic-related facility upgrades, laptop computers and other technology related to facilitating distance learning.
Fortunately, the impact of these added expenses was partially offset by decreases in other areas including labor, reduction in utility usage and lower transportation costs.
“On the labor side, I project us to be down from where we originally budgeted, and by a significant amount: $850,000,” Kampa said, citing a reduction in students at Brookside Academy, negating the need for three projected teacher positions, plus four fewer Instructional Assistants.
Labor costs were also lower due to the reduction in transportation costs with the hybrid and distance learning changes.
“In summary, we’re up $700,000 on revenue,” Kampa said, “but we’re down $800,000 on the expenses, so the net difference is we’re to the worse about $100,000 in the general operations and transportation portion of the general fund.”
OTHER EXPENSES DISCUSSED
For the facilities budget, state revenue is down about $100,000 since it’s determined by enrollment. A Long Term Facilities Maintenance (LTFM) project at the high school was able to begin months early due to students being out of the building, so about $750,000 of its designated funds were applied to last year’s budget.
That reduction was offset, though, by bumping up the operating capital portion for the purchase of school buses.
“It’s been three years since we’ve purchased a bus,” he said, “and that’s just not sustainable.”
Kampa noted that the food service and community service areas are intended to be self-sustaining. If they run a deficit, the district may have to use general fund monies to replenish the account balance, which is the case this year.
Although the number of students eating breakfast or lunch in school buildings has decreased, the district has been required by the state to supply “grab-n-go” lunches for off-site learners.
The budget shows a transfer of $138,843 out of the unassigned general fund balance to cover that deficit in food service.
The community service budget, which includes items like community education, driver’s ed, early childhood education and preschool, is also operating in deficit, according to Kampa, but should be able to see savings by reducing expenses and locating some additional revenues as COVID restrictions lessen.
BUDGET IS RESULT OF LONG ROAD
In summary, Kampa said the revised general fund is close to where the district thought they would be at this time, but they got there via a different path.
“We originally thought we’d have a deficit of $302,000,” he said. “And now we are at (a deficit of) $337,000 – a change of $34,000.
“I know it looks like we are deficit spending,” he added, “but when we look at the fund balance, we expect an increase of approximately $600,000, and that is the goal.”
Superintendent Nate Rudolph added he hoped the school board realizes Kampa’s presentation was a “bittersweet report.”
“The sweet part, and the part we’re proud of,” he said, “is Chris and his finance team, along with our entire system, has really done what they set out to do, and we landed about where we projected to land.”
Rudolph added that the bitter part is that it came with a sacrifice.
“Keep in mind,” he said, “to get to this point we cut over $3 million in over two years. Looking back, we’ve cut more than $7.5 million over three years. Our system and our organization has taken a significant hit to be able to balance the budget for this year.