'A really serious situation': Rochester schools to cut $10 million after failed referendum

Rochester schools must cut at least $10 million from next year's budget as they navigate ever-mounting costs and employees fighting for better pay.

That's the message district officials shared Tuesday, a week after voters rejected a proposed technology levy that would have covered the budget shortfall.

"This is a really serious situation," Superintendent Kent Pekel said. "We're going to continue to prioritize our academic agenda which is beginning to generate results, but this development makes it much, much harder."

Pekel outlined the district's next steps at a Rochester Public Schools Board meeting packed with teachers who had earlier marched as part of ongoing contract negotiations.

The superintendent recommends that Rochester cut dozens of jobs from the district by next year as well as extend an existing $17 million operational levy — which the board can do one time without voter approval per a recent Minnesota Legislature law change.

In addition, district officials will go back to voters next year with another referendum. It's too soon to say how much the district will ask or what the levy would pay for — Pekel blamed last week's voter rejection in part on complex messaging over the technology upgrades the district sought.

Rochester schools have cut about $21 million over the past two years — about 150 positions in total, according to Pekel. The district overhired during the past decade as it expected a larger student population that hasn't grown as quickly as projected. More than 600 students have left the district since 2020. Pekel noted the district's enrollment — a little above 17,000 — is expected to stay flat next year.

Other costs keep creeping up. The board on Tuesday approved a new 10-year busing contract with First Student that's about $3 million more annually than the previous agreement.

The district may need to cut more depending on ongoing contract negotiations with three of the district's seven bargaining units, including the teachers union. Pekel said the district is proposing a nearly 15% increase in contract costs for teachers, but union representatives say most of that money is going toward rising insurance costs rather than wages.

Rochester Education Association President Vince Wagner said the union is hoping for better pay across the board. The district's current proposal frontloads higher pay increases for newer teachers with less experience but offers minimal increase for a majority of Rochester's staff.

"[That] will help them with recruitment, but it's not going to help a lot with retention," Wagner said.

Pekel said the district's current proposal would mark the highest contract increase for Rochester teachers in three decades and helps to offset increasing costs for staff.

"We value our teachers," he said.

In addition, teachers are pushing for smaller class sizes. More than 300 marched in front of the Edison Administrative Building before the school board meeting Tuesday urging district officials to decrease class sizes in elementary buildings.

They point out that some schools, including Folwell Elementary, have second-grade classes with 32 or 33 students. That's too many for teachers to identify students who need extra help, teachers said.

Voters narrowly shot down the proposed levy last week — by about 300 votes. Referendum supporters noted that turnout was significantly down: Only about 21,000 people in the district made it to the polls, about a fourth of registered voters in the area.

The levy would have gone toward security upgrades throughout Rochester schools as well as online programs in the wake of a cyberattack that crippled the district's capabilities this spring.

Carol Shaffer, a volunteer in support of the referendum, said Tuesday she was disappointed it didn't pass but planned to work on the district's next levy proposal in 2024.

"Public education is an important engine in Rochester," she said.