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The Albert Lea school board on Monday approved the final budget for the 2023-24 school year, as well as the preliminary budget for the 2024-25 year.

Jennifer Walsh, executive director of finance, operations and safety for Albert Lea Area Schools, said the board is required to make the approval by June 30.

She said staff always try to get as close as they possibly can to what the actual budget will be, but sometimes things come in different from what is expected by the time they are finalizing the budget at the end of the year.

Walsh said the district is projected to have ended the current school year with an 11.98% fund balance, which is just shy of the 12% it typically strives for.

Some of the most significant changes on the final 2023-24 budget included a $125,000 revenue increase for interest earnings, which she said are starting to creep back up again, an increase in $83,000 in gifts and donations, about $118,000 in federal grants given to the district during the COVID-19 pandemic that will need to be spent by Sept. 30, as well as two new state grants — part of which will come in 2024.   

Some of the most significant expenditure increases included about $244,000 in increased special transportation costs, $88,000 in computer software, $143,000 in technology devices, $125,000 in TRA and PERA special funding and $78,000 in federal grant expenditures that are expected to be spent before July 1.

Regarding the budget for the 2024-25 school year, Walsh said the biggest challenge facing the district is declining enrollment, which is mostly coming as a result of smaller incoming kindergarten classes compared to the outgoing senior classes. The district is expecting a decrease in average daily membership of 40 compared to 2023-24, and the administration announced adjustments to coincide with this decline in May for the coming year.

Another notable change for the 2024-25 budget is a decrease by about $2 million in federal funds, which had been given during the COVID-19 pandemic.

The budget also will see a 2% increase in the general education formula as approved in 2023 by the state Legislature.

Walsh said almost all of their union contracts are already settled ahead of this year, with one exception, so there will not be as many unknowns as the previous year going into the budget. She said 80% of the district’s budget is wages and benefits, so every other year, staff have to make big assumptions when contracts are not settled.

There will be a 7% health insurance premium increase and an increase in the utilities budget by about $53,000, which she said she hopes will decrease with new boilers going in at a few schools, as well as the new solar projects.

The insurances budget increased by about $72,000 — or 14% — for worker’s compensation and general liability increases.

Overall, she said the projected fund balance for the year is 12.05%.

Money in the food service budget is increasing because students have free meals now, so the district is looking to use some of those funds to upgrade kitchen equipment in the schools.

In the Community Education Fund, there were changes made to reflect upcoming fee increases to the Tiger Cub program that administration hopes will help the program be more financially feasible.

The internal service fund for health insurance assumes a slight increase in revenues and a decrease in claims.