Robbinsdale Area Schools faces a $20 million budget shortfall for next school year and is likely headed into the red — largely due to a budgeting error. That’s the message that board members heard Monday and community members heard at a Wednesday town hall hosted by Superintendent Teri Staloch and Kristen Hoheisel, the district’s chief financial officer.
The error came from double-counting $20 million in compensatory funding, which is money handed out to schools based on the number of students who qualify for free and reduced lunch. And the district didn’t cut as it had planned: Just $3.2 million of the $17.4 million in proposed cuts have actually been made this year.
“Our error led us to overstate our resources,” Hoheisel said.
Though the board-approved preliminary budget was accurate, the application of the compensatory funding was doubled. It’s likely, Hoheisel said, that the district — which serves about 10,400 students in all of or parts of Robbinsdale, Brooklyn Park, Crystal, Golden Valley, New Hope and Plymouth — will be in statutory operating debt at the end of this school year.
Statutory operating debt is triggered when a Minnesota school district deficit exceeds 2.5% of its annual operating expenses and requires a district to submit a financial plan to the state.
Hoheisel said she started seeing financial red flags at the start of the school year but didn’t understand the extent of the problem until recently.
“We didn’t have all of the information. We probably still don’t,” she said, adding that board members and then the public were notified shortly after the issue was discovered.
Repeatedly, parents and Robbinsdale residents, some of them wiping tears, stepped up to the microphone at the Wednesday town hall and asked the school leaders how such a big mistake — representing 10% of the district’s $200 million budget — could have happened.