Open-enrollment winner Mahtomedi struggling to grow out of funding crunch

Mahtomedi Public Schools is in many ways a district to envy.

Students shine on state tests. Teachers are backed by local grants. The high school's "fab lab" — even its gym floor — have drawn private money, too.

But the district faces yet another budget deficit, is searching for a new superintendent and planning for a levy vote that may hinge in part on public understanding of an ingredient in its success that also has been a political flash point locally: its acceptance of a large percentage of students who live in other districts.

A Star Tribune analysis of state enrollment data has revealed Mahtomedi to be a big winner when it comes to families using open enrollment to send their children, and the state revenue they generate, across district boundaries to another school system for the programs and services they want.

Mahtomedi's success in attracting nonresident students comes despite the absence of one key element: "We don't actively recruit students for open enrollment," Superintendent Mark Larson said last week.

Demand is so high, however, that while the district bordering the eastern and southern shores of White Bear Lake needs open enrollment students to ensure it has enough kids to maintain its current course offerings, not every applicant is able to get a seat.

Siblings of students now in the district and the children of employees working for the school system have priority if spots become available. Everyone else is in a pool from which the district selects students randomly. There is no eyeing, for example, a potential captain of the robotics team.

"You can't pick and choose," Larson said. "There is none of that."

But the end result is a high-performing district with nonresident students who are whiter and better off financially than those in the districts they are leaving. Fifty percent, or more than 400, of the district's open enrollment students in 2016-17 came from the White Bear Lake district, 23 percent from Stillwater and 21 percent from North St. Paul-Maplewood-Oakdale. Ninety percent of nonresident students were white.

In state standardized tests, Mahtomedi students perform as well as or better than peers in Edina and Minnetonka, the latter of which also is a major open enrollment winner.

Mahtomedi, unlike Minnetonka, however, has fiscal problems.

That's because while interest in the east metro district is high, there are limits to how much it can grow.

Before arriving in Mahtomedi in 2009, Larson was a principal and administrator in Minnetonka, where Superintendent Dennis Peterson has described its success in attracting nonresident students and avoiding budget strife as "The Minnetonka Miracle."

The funding that has accompanied those students has allowed Minnetonka to go 12 years without making budget cuts, Peterson has said.

While Mahtomedi, too, has embraced open enrollment, Larson said that was not the plan when he became superintendent. The catalyst, he said, was a 2009 study to determine the ideal size of the high school. The district settled upon 1,200 students, or 300 per grade, with seats to be filled by residents and then, if the numbers fell short, by open enrollment students. The district worked backward, then, to set targets for class sizes in the elementary and middle school grades.

What separates Mahtomedi from Minnetonka, however, is that the west metro district — once on the verge of closing schools — had room to add more students.

"They grew their way out of the problem," Larson said.

Mahtomedi has been hurt by the state's failure to keep pace with inflation when providing aid to districts, Larson said. The district has won voter approval of a $1,044 per student local levy, but that's been deemed insufficient "to maintain the current investment in student achievement long term," a recent district budget document states.

A $1.6 million shortfall has been projected for 2018-19 — this after the school board had to make a $1.3 million budget fix for 2017-18.

Part of the solution for 2018-19 calls for the district to accept more open enrollment students and, in turn, increase class sizes. Not the best timing, given changes in state law have put more of the cost of educating new open enrollment students on local taxpayers, and the district intends to ask voters for more operating money in the fall. Earlier this year, the board decided to boost enrollment by 40 students, which could increase second-grade class sizes from about 24 to 28 and fifth grade from 27 to nearly 30. In 2014, the district won voter approval of an additional $593 per student after pledging to limit open enrollment.

Larson said he believes residents understand that the way to balance budgets is to reduce costs and raise revenue, "and we're doing a combination of that." Fourteen veteran teachers are exiting via early retirement incentives.

A survey released last week seeking to gauge voter interest in a levy increase showed 58 percent of respondents being supportive. That figure rose to 64 percent after the potential benefits and consequences resulting from a yes-or-no vote were outlined.

Larson announced in January he would be moving on after nine years in Mahtomedi, "the best district in the state," he said. He and his wife have a new grandchild, he said last week. While the job could by no means be described as "drudgery," Larson said, the joy he's gotten out of the work was starting to diminish.

"It's a cliché to say that you'll know when it's time, but it's true — you know when it's time," he said.

He senses excitement about who will replace him, "and the body's not even cold," he added.

The new leader is expected to be named in early May, and Larson has a rooting interest in the outcome.

"It is really important to me that we get an outstanding successor," he said. "Someone who will keep this remarkable district great, I guess."

anthony.lonetree@startribune.com • 612-673-4109 maryjo.webster@startribune.com • 612-673-1789