By Logan Wells, News Director | Logan@kymnradio.net
On Monday, the Northfield School Board heard the updated financial forecast for the district. The financial forecast is one of four regular elements in the Northfield Public Schools budgeting cycle, which includes adopting the regular budget in June, auditing the budget in the fall, and then adopting the revised budget in December. As previously reported, the district is projecting a budget deficit of $592,544. However, costs are projected to rise at a rate faster than revenue, and the district is looking at readjusting the budget for the next several years.
Director of Finance Val Mertesdorf noted that the main source of funding for the district is based on the number of students enrolled and that the district does not have any control over that source of funding. Here’s Mertesdorf at the School Board Meeting:
“The per-pupil Funding is 50% of our total revenue. So we have zero control over 50% of our revenue. I want to make that clear: It is a dollar amount times the number of our students. So when our students are declining, we’re having less revenue.” – Director of Finance Val Mertesdorf at the 1/27/2025 School Board Meeting
She noted the impact even a few students can have:
“And so when we look at that across the board, that’s roughly 3.5 students per grade. So, it’s not as simple but roughly, a student generates about $10,000. So we’re talking about potentially losing over $500,000 of revenue.” – Director of Finance Val Mertesdorf at the 1/27/2025 School Board Meeting
Northfield is not the only school district struggling with declining enrollment, and Superintendent of Schools Dr. Matt Hillmann noted more people from outside of the district come to Northfield schools than people in the district choosing to leave; he cited a larger issue as the reason for declining enrollment, here’s Hillmann on KYMN:
“This is about resident births, and over the last six years we’ve seen a 12% decline in Rice County.” – Superintendent of Schools Dr Matt Hillmann on the KYMN Morning Show
The Northfield Public Schools revenue is from 2023-24 and is projected to be until 2030-31. From the Northfield Schools Finacial Forecast Packet 1/27/2025
The Northfield Public Schools expenses are from 2023-24 and are projected to be until 2030-31. From the Northfield Schools Finacial Forecast Packet 1/27/2025
Mertesdorf noted that several different expenditures, including salaries and benefits, impact the district. The current salaries budget is $41 million, and it’s expected to rise to $46 million by 2029-2030. Mertesdorf shared that the reason for the increase in salaries is, in part, to retain and attract teachers and staff.
Despite some increases in different funding formulas from the state, when factoring in for inflation and declining enrollment, Mertesdorf stated that the actual increase in funding for the district is relatively small:
“We’re looking at a 0.8% increase in our revenue, so that is the impact of the declining enrollment. Offsetting any of those increases. As well as other things like the summer, unemployment revenue falling off, a conservative interest revenue adjustment.” – Superintendent of Schools Dr Matt Hillmann on the KYMN Morning Show
Next year, the projected increase in revenue is 0.8%, while the increase in expenses is 6.5%. The gap is expected to continue in future years, In the 2026-27 school year, revenue growth is expected to be about 2.7% behind expenses and 2.3% behind in the 2027-28 school year. Mertesdorf stated that these numbers are too far apart, and the budget needs to be adjusted to be responsible going forward.
Furthermore, inflation has been impacting the district for many years now. Mertesdorf estimates that if funding from the state had increased with the inflation rate since 2003, the district would have an additional $1,364 in funding per student, or about $5.6 million in total.
Based on all these projections and to balance the budget over the next several years, the district is looking at reducing spending by about $6 million next year.
“We got the money, we could cover the entire deficit, right? That’s not responsible, and we can say. A little bit, this year, a little bit next year, and maybe that’s some of the things that we would choose to do that. That’s the importance of having a fund balance.” – Superintendent of Schools Dr Matt Hillmann on the KYMN Morning Show
Mertesdorf noted that the High School bond referendum has no impact on the district’s financial situation because the general and referendum bond funds are separate. She noted that the funds authorized by voters in the referendum can only be used for the high school construction and not on other items like salaries and benefits. This is why the district can conduct construction projects while also reducing the general fund.
“And so I just want to be clear. They’re very to very legally separate pots of money. And so we cannot use them for general operations.” – Director of Finance Val Mertesdorf at the 1/27/2025 School Board Meeting
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View the Financial Forecast Summary Memo here & View the Full Presentation Below:
Mertesdorf assured everyone that the district remains in a good place overall and that this is part of a responsible budget process.
“Overall, we are currently in a strong financial position, and we want to continue to be in a strong financial position. We are being responsible and making hard choices to ensure that we can be in that position and have the resources we want and need to provide for our students.” – Director of Finance Val Mertesdorf at the 1/27/2025 School Board Meeting
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