Budget Process

After years of budget reductions, last November the School Board asked local voters to approve additional funding by putting a referendum on the ballot. In the midst of a pandemic, our community could not support additional funding. Therefore, we will again be making budget reductions this year.

Over the last two years, the district has cut $7.5 Million from the budget and eliminated more than 90 jobs. We have already cut to the bone, and we feel that every day. Still, we are committed to living within our means and rebuilding the fiscal health of the district. Our budget reduction timeline will stretch from February-May with a commitment of proactive communication and collaboration with our staff, community and Community Task Force.

1. Cambridge-Isanti is one of the LOWEST funded districts in the state. Out of 330 school districts in Minnesota, Cambridge-Isanti ranks near the bottom at #308 in total revenue per student. We receive $1,300 less per pupil General Operating revenue than the average MN school district. The $1,300 funding gap, across more than 5,000 students means we receive $6.4 million less revenue for our local schools. This is largely due to Minnesota having a broken school funding system. The state hosted a task force last year to study the problem and recommend solutions. You can find the recommendations here.

2. Cambridge-Isanti is already the LOWEST spending district (per pupil) in the region. After more than two years of budget reductions, our district has reduced expenditures by more than $7.5M. This represents approximately 12.5% of the operating budget. We only have $2.0 million in our unassigned fund balance (savings account), which represents 2.2 weeks of payroll. FY 21 was the first time in ten years that the district decreased expenses. Still expenses are increasing faster than revenues. Under current projections rolling everything forward for FY22, the budget is in the red by almost $1 Million. We are committed to living within our means and nursing the district back to financial health. The bottom line is that we are facing a revenue problem, not an overspending/expense problem.

3. School Funding is a shared responsibility. Minnesota School Funding system is designed to be a shared responsibility with local, state and federal funding sources. Cambridge-Isanti Schools is one of the few districts that does not have a local operating referendum, which has been an important part of the school funding equation in Minnesota for more than a decade. Without a local referendum, we continue to face continued budget cuts and our students will have fewer resources supporting their education. Only 10% of our operating budget comes from local property taxes, compared to 20% of the average MN school district budget.

4. Current Status - Last November our district proposed a referendum question that would allow us to decrease the funding gap considerably. The community declined the question; therefore, directing the district to continue to look at reducing expenditures and/or increasing fees to balance the budget for FY22.

5. Pandemic - Federal funding has helped the district cover costs of added cleaning, technology tools, PPE and other pandemic costs. However, with a decrease in the number of students purchasing meals each day, our Food Service Fund is losing money and will go into the negative; this must be covered by General Fund.

There are school district functions that are required or mandatory under state or federal law, rules or regulations. We will need to consider services that are strategically important in light of the pandemic and post pandemic, but also look for efficiencies wherever we can.

There are school district functions that are discretionary, and not required (nor mandated) under state or federal law, rules or regulations. Again, many of those functions are incredibly important to students or the community. We want to maintain opportunities (where possible) for students to connect with school.

As an educational organization, more than 80% of the district budget is people. Throughout this process, we will prioritize respect and compassion for our staff as we make difficult decisions that will impact employee’s lives.

• We will commit to personal and proactive communication with individuals who will be directly impacted.

• We will work cooperatively with employee bargaining group leaders to review the process and intended actions to minimize unforeseen missteps.

• Only official minutes of School Board actions, as required by law, will include the names of individual staff members.

• We will utilize our district website to provide up-to-date information, gather feedback, and answer questions.

• We will proactively communicate with our community and engage our Community Task Force in collecting feedback about potential reductions.

• We will remain grounded in the Bluejacket Way - Responsibility, Self Discipline, Honesty, Respect, and Compassion

FY 2020 Financial Audit

On January 21, 2021, the School Board received an independent financial audit report from the public accounting firm or Malloy, Montague, Karnowski, Radosevich & Co,. P.A. The presentation, management letter, and financial statements are available for review.

• The audit report provided an unmodified opinion, or “clean opinion” of the Cambridge-Isanti Schools financial statements and found no deficiencies in the District’s internal control over financial reporting.

• The audit report confirmed the district is improving its long-term financial position, incrementally, following a series of cost-cutting measures over the last two years.

• District revenues and expenses continue to lag state averages by more than $2,000 per pupil for total revenue and $1,300 per pupil for General fund operating revenue.