Prior Lake-Savage Area Schools ended 2018 fiscal year in the black

Prior Lake American

The Prior Lake-Savage Area Schools district will end fiscal 2018 in the black despite its original plan to exceed revenues in order to spend down its “savings account,” district officials said.

In the 2018 budget approved by the Prior Lake-Savage Area School Board in December 2017, the budget included a deficit of $1.6 million. The deficit was planned in order to spend down the general fund balance to 13 percent of the district’s total expenditures. The district has a policy to keep the balance between roughly 8 to 12 percent, which board chair Richard Wolf said is enough to cover a month or so of regular operations.

“Our district fund balance acts as a savings account,” district spokeswoman Kristi Mussman wrote in an email. “In order to access these dollars, a district must show expenditures exceeding revenues, which is why the board voted to budget more dollars in expenditures.”

Wolf said the fund can fill gaps in state revenue, which tends to come in waves as residents pay their property taxes.

However, expenditures did not end up exceeding revenues as a result of delaying long-term facilities maintenance projects to coincide with referendum projects, increased state revenue for special education, and spending across the district coming in under budget.

A $109.3 million referendum was approved by voters in November 2017 for multiple district construction projects.

“This isn’t a surprise, and it’s never been a surprise,” District Business Services Executive Director Julie Cink said. “It’s always been a planned expenditure. When the referendum passed and the decision was made to delay some of those projects, that’s how we came within budget.”

For the 2018 fiscal year, which ended on June 30, general fund revenues were $92.3 million and expenditures were $91.5 million. The general fund balance sat at $16.3 million at the end of the year.

Cink said the board will discuss whether to have expenditures exceed revenues in order to meet the fund balance policy as part of the budget process.

“Our district is in great financial shape,” Cink said. “The school board has really monitored our budget and how we spend our finances to make sure we continue to be good stewards of our taxpayer dollars.”