The Greenbush-Middle River School Board met in special session on January 30th, 2024, with the purpose of approving a Statutory Operating Debt (SOD) plan to submit to the Minnesota Department of Education (MDE) by January 31st.
According to the MDE website, “SOD exists if the school’s operating debt is more than 2½ percent of the most recent Fiscal Year’s (FY) expenditure amount.” School districts with this designation must create and submit a Special Operating Plan for approval by MDE.
During the special session on January 30th, the board approved a resolution to begin recovering from Statuatory Operating Debt. The district has agreed to remove the SOD by the end of fiscal year 2027 and to have a positive fund balance the following year. The school district has also agreed to stop approving deficit budgets and to submit preliminary budgets that show they are no longer deficit spending each year until the negative fund balances have been removed.
The Special Operating Plan outlines how GMR came to be in their current position. In November 2023 Brady Martz, the district’s auditors, found that they had received nearly $100,000 less than expected in County apportionment that is related to power line taxes, a parking lot project was budgeted for one year but completed the next which led to a $200,000 adjustment, a levy shortage from Kittson and Marshall County Property Taxes that has since been rectified by Roseau County, and reductions were not in place for declining enrollment.
The budget set and approved by the GMR School Board in June and December of 2023 indicated a deficit of ($314,242). The “total current, updated projected deficit at June 30, 2024 is ($856,992)” includes the amount in the unrestricted fund balance of ($551,750). The unrestricted fund balance is the difference between the total fund balance and the sum of nonspendable and restricted fund balances.
In order to balance the budget in the three years the school district has to remove the SOD, they must have a “combination of increased revenue and budget reductions totalling approximately $500,000 - $600,000 annually” for the next three years. This amount would rectify the SOD, but does not take into account increased costs or declining enrollment.
The complete plan can be found at https://meetings.boardbook.org/Public/ Agenda/1219?meeting=620825.
