MASA Breakout Session

ACHIEVING FINANCIAL STABILITY AND CREATING CLARITY FOR YOUR BOARD AND COMMUNITY

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Information Presented by Dr. Ryan Laager

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WHY DID WE DEVELOP THIS MODEL?

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Help districts better understand expenditures as they relate to comparable districts

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Help you understand the impact related to comparable districts when adding programming or making reductions

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Create a clear picture for the board and community to understand the district’s financial picture

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HOW DID WE DEVELOP THIS MODEL

• Worked in a district that went into Statutory Operating Debt because of an accounting error
• Worked in a district that cut five out of the eight years I provided leadership
• Started having coffee once per month with an individual who was a large No Vote person in the district to learn…..
• Developed and taught a graduate course on school finance to try and learn more
• The best way to learn is to study and teach
• Crafted a culminating activity for this course and identified comparable districts
• Initially, based on enrollment of districts
• Review of all expenditure and revenue areas

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WHAT DID WE LEARN…

• Glaring differences between how comparable districts spent there resources
• Chart below represents what we see in a lot of districts across the state because they make financial decisions in isolation

(example: 7 indicates they spent the most one indicates they spent the least)

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WHAT DID WE LEARN…

Findings were incredibly curious…

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• Some districts have more money in the bank than many mid sized companies in Minnesota..

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WHAT WE HAVE LEARNED OVERTIME…

• There were incredible discrepancies on how people spent/or didn’t spend their money

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• There are seven key expenditure areas districts need to examine and make sure they are balanced.

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• This evidence provides a solid reason why realignment in resources is needed and the areas in which they are needed.

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• Just reducing does not mean you are solving a long-term budget constraint. Some decisions will continually erode the budget year-after-year.

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• In this process everyone will be able to see specific areas where the district is out of financial alignment in comparison to other districts

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WHAT DID WE LEARN…

Significant disconnect between staffing allocations and structure aligned to revenue/expenditure

• Custodians TH
• Transportation costs SE
• 4% on the budget amount each year instead of by route
• School Level Admin BE
• Two districts had same number of students and same building 4 school admin vs 2
• District Admin PL
• Cut 3 million but nothing out of district admin
• Two years later required us to cut an additional 5 million

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Provides a foundation for budget development that is easy for everyone to understand where and how we are using our resources.

THE OPERATION BUDGET ASSISTANCE MODEL…

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KEY STEPS

• When making budget decisions you MUST use comparable districts
• Determine how much you can afford to spend in each of the seven key expenditures areas
• This helps you understand market value for what you can have and how much you can have

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Examining Expenditures by Comparable Districts in Seven Key Areas

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Information provided by

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Presented by Dr. Ryan Laager

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Examining Expenditures at the individual level

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Information provided by

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Presented by Dr. Ryan Laager

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THE MODEL

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Example: One key thing to track to understanding your ongoing resources

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Information provided by

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Presented by Dr. Ryan Laager

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KEY STEPS

• Keep track of important information
• Determine how much money you save/spend each year on staffing leaving and replacing
• Once you have a balanced budget, understand how much it costs to run each grade level based on enrollment
• Establish class size ranges so there is a clear picture
• If you run classes on the low end of the range, you will need to run class sizes at the high end of the range

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