by ALEXANDRA RETTER
The Winona Area Public Schools (WAPS) Board is poised to approve a 2021-2022 budget with a deficit of about $422,000 covered by the district’s limited reserves. Spending down reserves, or the fund balance, may raise the cost of borrowing money as School Board members and district leaders start to consider another multi-million-dollar referendum for building projects.
“It is my strong encouragement to the board to accept that deficit and state we will use the fund balance to cover it at this time,” Finance Director Kristy Millering said at the School Board’s June 3 meeting. She added that the board could approve a revised budget once the state legislature decides what funding school districts will receive. Per WAPS policy, the district intends to have about 10 percent of its operating costs in reserve as a rainy day fund for paying everyday costs such as teachers’ salaries. When WAPs previously projected a deficit of about half a million dollars, the fund balance was anticipated to decrease to 6.6 percent. WAPS currently has a AAA- credit rating, but Millering said in May that if the fund balance keeps dwindling, that could drop to a B rating, forcing the district to pay higher interest rates on loans for its $63 million in facility needs.
The projected deficit of about $422,000 was calculated assuming that the state legislature does not increase the amount of funding school districts receive per student, Millering said. If the funding increases by one percent, the deficit would be about $251,000, and if the funding increases by two percent, the deficit would be approximately $80,000.
Millering presented two other budget drafts to the School Board, as well, but said she did not recommend that board members approve either. She said they were tied to unions that have yet to settle their contracts. It was unclear whether those proposals represented budget options with no deficits. Some School Board members had asked for such options. Millering was not available for comment.
School Board member Steve Schild expressed concerns throughout May about the budget proposals the board received from the district not including enough information to allow board members to choose whether to make cuts or dip into WAPS’ reserves. Asked in an interview whether he agreed with using the fund balance to cover the deficit, Schild said, “I guess that I would give a guarded yes on that. And what I’m thinking about here is, it was good, at that most recent meeting, that we got more information than we had in the past.”
WAPS is expecting that it will receive federal, time-limited COVID relief funding, or ESSER funding, and Schild said it seems that funding is the reasoning behind district staff setting up the budget proposal as they did. He added that the document School Board members received about staffing changes was valuable, with one caveat: “It would’ve been … more helpful if each of the personnel moves listed there had included a dollar figure,” Schild said of costs or savings of staffing changes.
Schild continued, “I still don’t like the idea of cutting into the fund balance like that, because of the ramifications it might have when we go out to borrow money. I guess I also wish that if the plan was to bank on the COVID money, as it appears we are, I think it would’ve been helpful to talk about that sooner.”
School Board member Michael Hanratty also voiced his support at the board’s May 20 meeting for getting more detail in the budget proposals the district presents to board members. At the board’s June 3 meeting, Hanratty said he appreciated the information the board received. “I can live with it, basically,” he said. “You can tell a lot of effort and thought has been put into it.”
When will WAPS fund cultural liaison?
School Board Jim Schul asked Superintendent Annette Freiheit to explain how district leaders plan to use the ESSER funding WAPS will receive to establish a cultural liaison position to support students and families of color. He said he recognized there has been concern about the position and he claimed that though one may look at the budget proposal and not see a cultural liaison line item, that would not ultimately be the case. “Sometimes the narrative is justice delayed, justice denied. Well, Superintendent Freiheit, you’re following through on this.”
Freiheit said in an email to the Winona Post earlier this month that the district had yet to determine whether it would fund a cultural liaison in 2022, 2023, or 2024.
Freiheit said she wants to put the ESSER funds toward programming for students’ academic, social and emotional growth and the district’s engagement with families over the next three years. She said she would like to fund as much programming as possible next year, then ease back to determine the efforts’ efficiency and how to include the programming in the district’s regular budget. School Board members will have to approve the three-year ESSER funding plan, she said, and the public will be given an opportunity to weigh in on it. The district is awaiting further guidance on how some of the ESSER funding may be spent.
School Board Chair Nancy Denzer said she would like some ESSER funding to go toward training staff to help with students’ social and emotional learning, as well as providing credit recovery opportunities. Denzer was not available for further comment.