Westonka school board members unanimously approved the district’s revised 2020-2021 budget Feb. 8, finalizing a tumultuous year that brought in unprecedented federal funding but that also reflected the toll of the coronavirus pandemic on budget drivers like enrollment and activities revenue.

The financial impact of the pandemic flipped what had in June been a projected $350,000 surplus into what is now a minor deficit before then contributing to the board’s second resolution last week: approval of $250,000 in budget cuts for next year.

Westonka’s adopted budget, approved June 8, was approved at a time when much was still unknown about available funding or total enrollment numbers. It was also made prior even to the governor’s recommendation on reopening for the 2020-2021 school year.

Now, Westonka is bridging a $54,000 deficit with a reserve transfer and looking at a quarter million in reductions, still to be determined, for the 2021-2022 school year.

The revised 2020-2021 budget approved Feb. 8 shows $34,495,463 in general fund expenditures and $34,441,335 in revenues. After the reserve transfer, the district will still be operating with a reserve fund balance that is 9.32 percent of expenditures, which is within its goal of 8 percent to 18 percent.

Total enrollment in the district for the current year is now projected at 2,439 students, down from 2,520 last June. That physical loss has translated into a financial loss of about $520,700 after taking into account the $85,000 Westonka received in state aid for declining enrollment.

Westonka did receive a boon of an additional $1.1 million in property tax revenue this year as the district entered Year One of its new operating referendum, approved by voters in 2019. That revenue.

“Without the additional operating funds, our district would have been faced with significant budget cuts even before the pandemic,” noted Borg in a Feb. 11follow-up posting to the district website.

The district also was aided by a surge of federal relief money, and although its enrollment drop saw its standard federal funding decline by almost $152,000 this year, it also saw an influx of $1.4 million in coronavirus relief, including the $605,000 the cities of Mound and Orono gave the district from their own CARES Act allocations.

Also strongly tied to the pandemic were the district’s local revenues, where the district saw a loss of $648,000. Canceled events and limited attendance to sports games and the like added up over the months, and the proportion of general fund revenue coming in from this area was just half of what it normally would be.

PLANNING AHEAD

In looking to next year’s budget, school officials are banking on some enrollment growth, a budget that Borg said was “not overly conservative” and that carries some risk, both in enrollment projections and in what the start of the next school year might look like.

“We’re moving with the assumption that vaccines will reach our community and that we can operate under a normal circumstance next school year and that our enrollment should improve,” he said. “There’s obviously a number of things between now and then that could have an adverse effect on our enrollment, and if that happens then we’re going to have to adjust.”

Westonka is projecting an enrollment next year of 2,471 students, higher than the current school year but still a reverse from the 5-year trend of averaging an additional 50 students each year.

The district is also resetting federal and local revenue projections to pre-pandemic levels and working under the assumption that positions created specifically due to the COVID-19 pandemic will be cut for next year.

For the $250,000 in budget reductions, though, much is still up in the air, but committing now to make those cuts would be “the protection of unknowns,” Borg told school board members.

Already, the district has deferred some of its capital expenditures to avoid making reductions to staffing and programs this year, but “This flexibility will not be allowed by the state in next year’s budget,” Borg noted in his online posting.

“Over the coming months, the administration will challenge the district’s operational expenses and look into appropriate ways to increase revenue,” said Borg. “This year, as in the past, we will look for ways to reduce the impact of these reductions on the classroom.”

The school board is expected to finalize in April a plan for those reductions.

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