Shakopee residents expressed frustration and mistrust for the school board and superintendent at a special forum Monday to answer questions about a $4.5 million budget shortfall.
The forum lasted four-and-a-half hours and attracted hundreds of people, with a long line of people allowed to ask one question each.
Superintendent Rod Thompson began the forum with an apology for his lack of public communication about the shortfall and for not providing sufficient financial oversight.
"I know I have not met your expectations in both communications and the oversight of our finance department," Thompson said to a full auditorium at West Junior High School. "As your superintendent, I know this is ultimately my responsibility."
School board member Reggie Bowerman outlined three types of errors:
- Some line items were under-budgeted where increases should have been projected.
- Some items were estimated at amounts similar to past budgets when increases should have been projected.
- Some items were left completely blank on accident.
“They were genuine, honest mistakes. I say that because one of things we asked (consultant School Management Services) to do... was to look at this and first and foremost make sure we had nothing unethical, illegal, or fraudulent going on. That was not the case," said Bowerman. "We have a series of errors, human mistakes."
Finance Director Mike Burlager, who retires at the end of June, took responsibility for the error during the school board's business meeting Dec. 12. Burlager was not at the Monday meeting.
Bowerman said the board plans to release more regular budget tracking reports and review the budget monthly. The district also contracted with School Management Services for additional budget oversight, Bowerman said, at a cost of $43,750 through the 2018 fiscal year.
Fixing the shortfall
The district plans to erase the shortfall by cutting about eight or nine teaching positions through attrition, or not filling vacant positions. According to district spokeswoman Ashley McCray, up to 10 non-tenured teachers will be laid off as well.
Thompson said the following administrative cuts will be made:
- A 20 percent cut to the teaching and learning department, which means fewer substitutes during planning, less professional development and less curriculum writing time.
- Funding for a communications employee and equity team member will come from non-general funds.
- Reducing the supply budget.
- Non-licensed overtime will be eliminated for those who do not work directly with students.
Dwindling fund balance
Dozens of people asked how they are expected to trust the errors won't be repeated. Others wondered about the dwindling cash reserve balance that last year was down to $2.5 million from $13.4 million in 2012.
"Six years ago when Dr. Thompson came here, the fund balance was $13 million," Glen Solander of Shakopee said to the board. "Basically, this school board and superintendent has overspent more than $10 million in six years."
Board members defended the spending, saying they have been investing in students' education and the future of the district.
Thompson said the fund balance has been reduced by:
- Lower enrollment than expected in 2013-14 and 2014-15, which reduced expected revenue.
- In 2013-14, due to growth, eight full-time equivalents were hired, two deans shifted to assistant principal positions and funds were used for technology support and increased special services and professional development.
- All-day, every day kindergarten began in 2014-15, for which 19 full-time equivalents were hired. Another 14 other full-time equivalents were hired due to growth, Thompson said.
- Last year, a new special education formula led to a decrease in revenue, coupled with the hiring of 10 full-time equivalents due to growth.
- $4.5 million in budget errors were made in 2015-16.
Thompson said the district plans to replenish the fund balance over the next couple years. Shakopee resident Mike Renner questioned where the money to rebuild the cash reserves will come from when the fund has done nothing but shrink in recent years.
"You have $3 million on average every year of the funds going down, and we're supposed to believe that this is just going to magically stop on a dime, this crazy spending?" Renner said.
"We're going to (do that) by living within our means," Bowerman said. He said the board will budget more conservatively and track the budget more aggressively.
Board Chairman Scott Swanson said he's confident the district will recover from the shortfall, especially with more checks and balances now.
"I'm not sure there has ever been a higher level of heightened attention to a school budget as there is now," he said.
'This is all in your lap'
Many residents wanted to see Thompson held accountable for the budget mistakes, with some calling for his resignation.
"Rod, I think this is more than communication," said Kevin Carstens of Shakopee. "This is all in your lap."
Carrie Ferris of Shakopee questioned why in July the board unanimously approved a three-year contract for Thompson with a 10 percent raise. Thompson's salary was approved at $212,000 with 2.5 percent annual raises.
“I want to know why… you’re getting a 10 percent raise," Ferris said. "We’ve got teachers who are friends of ours, they’re our next door neighbors… and they’re losing their jobs while the superintendent who has dwindled us down to broke is getting a raise."
Board members defended Thompson, with Bowerman saying they looked at nine comparable districts and found Thompson ranked last in salary. Their raise bumped him up to fifth.
“I have full support in Dr. Thompson because of what I have seen him do in our district," Bowerman said.
The crowd laughed after board member Matt McKeand said, "He has been doing great."
A group of Red Oak Elementary teachers wearing green T-shirts stood up when teacher Kristen Lea addressed the board about increasing district expenditures in recent years.
"How is cutting teachers and raising target class size numbers what's best for our kids?" Lea said. "We have concerns that money over the past few years has not been spent on what truly matters for our kids."
Students from seventh grade through 11th grade addressed the board as well. Kaleb Cardona, a junior, represented the Shakopee Robotics team and said he's concerned about the impact budget cuts will have on STEAM (Science, Technology, Engineering, Art, Mathematics) education.
"As long as kids are enrolling, (STEAM) isn't something we're going to cut," board member Angela Tucker said.
Another student asked if high-level administrators will be taking pay cuts, which prompted applause and cheers.
"One of the things I've talked to my wife about is just that," Thompson said. "We take a look at every possible way, anything and everything that can be on the table. That's really a fair question."
At a press conference after the meeting, Thompson said it would be a "good faith gesture" if he took a pay cut, but no decisions had been made.
"From outside the lens, I finally get why there is anger and mistrust, and we will do everything in our power to keep moving forward," board member Shawn Hallett said.
Jo Herrera contributed to this report.