The D-E District Update

Let's Talk About Money!

This month's district update is going to focus mostly on money! Sorry if that sounds a little boring, but school finances are an incredibly important part of a district's success and long-term stability.

School districts across Minnesota are facing some significant financial challenges. Declining enrollment, rising costs, and funding pressures are forcing many districts to make difficult decisions. Albert Lea is moving forward with plans to close an elementary school, while Minneapolis recently considered closing or consolidating several schools before deciding to put those plans on hold. Closer to home, districts including Kasson-Mantorville, St. Charles, Lanesboro, and Hayfield are asking their communities for additional financial support through operating referendums this November.

In fact, according to the Minnesota Department of Education, 241 school districts in Minnesota, or approximately 73%, had an operating referendum in place as of November 2025. Dover-Eyota is among the minority of districts that does not currently have an operating referendum. An operating referendum allows a school district to receive additional voter-approved funding, generally through local property taxes, to help cover everyday operating expenses such as staffing, classroom resources, and educational programs.

We've certainly had our own challenges here in Dover-Eyota. Over the past four years, we've made more than $2 million in budget reductions. Those were not easy decisions, but they were necessary to put our district on stronger financial footing.

At the October School Board meeting, the Board of Education received our annual financial audit presentation from CliftonLarsonAllen (CLA). The presentation provided an overview of where we stand financially, and I'm happy to share that there is mostly good news to report!

I also believe it's important that our community understands how school finances work and where our money goes. School district budgets can be complicated, with different funds designated for different purposes. Just because we have money in one account doesn't necessarily mean we can spend it on something else.

With that in mind, I want to walk you through some of the key fund balances highlighted in our audit, explain what each one is used for, and share where we stand financially.

My goal isn't to turn everyone into a school finance expert! I simply want to be transparent about our district's financial position, celebrate the progress we've made, and help our community understand both the opportunities and challenges ahead.

I am pleased to share the results of Dover-Eyota Public Schools' annual financial audit for the fiscal year ending June 30, 2026. CliftonLarsonAllen (CLA), an independent auditing firm, conducted the audit.

The district received a clean audit opinion, meaning our financial statements were fairly presented.

The auditors also reported:

• No findings related to internal controls over financial reporting.

• No significant compliance issues involving laws, regulations, contracts, or grants.

• No Minnesota legal compliance findings.
  
  

These results reflect the district's commitment to sound financial practices, accountability, and responsible management of taxpayer resources.

One of the most encouraging parts of this year's audit is the improvement in our financial reserves. After several years of difficult budget reductions and careful financial planning, we're beginning to see the positive results of those decisions. While we still have challenges ahead, we're in a much stronger financial position today than we were just a few years ago.

Key Financial Highlights

The district finished FY2026 in a stronger financial position, with several important indicators showing improvement.

General Fund Unrestricted Balance

This is money the district has available to help cover unexpected expenses, address future financial challenges, and maintain financial stability. Think of it as the district's savings account or financial safety net. Maintaining a healthy balance helps protect the district from unexpected funding changes or expenses. School districts work hard to protect this account. You've most likely heard me talk about this account or read about it in previous updates. With the sale of our bus fleet, prior budget reductions, and increased Special Ed reimbursements, we planned to build up this account.

2025 Balance: $1,211,562

2026 Balance: $2,076,462

General Fund Assigned Fund Balance

This is money the district has set aside for specific future expenses or projects. Think of it as a savings account for planned purchases or improvements. One of our current priorities is saving for a potential turf and track replacement in summer 2028. This will be a significant expense, and setting money aside now will help us prepare for the project rather than having to find the money all at once. We are intentionally saving these funds for future needs rather than using them to support day-to-day operating expenses.

2025 Balance: $375,345

2026 Balance: $1,103,794

Operating Capital Balance

This is money the district uses to maintain and improve our buildings, equipment, technology, and other important resources. Recent purchases and improvements include an upgraded security camera server, new iPads for our 1st-grade students, smart board replacements in grades 3–5 classrooms, and the final installment of new furniture for the elementary school. The School Board's Finance Committee prefers to keep at least $200,000 in this account to cover future equipment needs, technology upgrades, and unexpected capital expenses.

2025 Balance: $291,042

2026 Balance: $330,836

Long-Term Facilities Maintenance Fund Balance

This is money the district sets aside to maintain and repair our school buildings and facilities. These funds help us maintain our buildings and address maintenance needs before they become bigger, more expensive problems. Recent projects have included replacing a sink at the elementary school, replacing sections of sidewalk, and other necessary building repairs and improvements. By planning ahead and maintaining these funds, we can keep our schools safe, functional, and in good condition for students, staff, and the community.

2025 Balance: -$9,797

2026 Balance: $244,272

Food Service Fund Balance

This fund supports our school breakfast and lunch programs, including purchasing food, maintaining kitchen equipment, and covering staffing costs. Funding through Minnesota's Free School Meals Program, which provides breakfast and lunch at no cost to all students, has helped keep this fund balance strong. A healthy balance lets us keep providing nutritious meals, replace aging kitchen equipment, and plan for future food service needs without adding pressure to the district's general operating budget.

2025 Balance: $445,110

2026 Balance: $565,491

Community Service Fund Balance

This is money the district uses to support programs and activities that serve our community beyond the regular school day. This fund includes Community Education, Early Childhood Family Education (ECFE), and School Age Child Care (SACC). These programs provide valuable opportunities for families, young children, and community members of all ages. Maintaining a healthy fund balance helps us cover program expenses, plan for future needs, and continue offering quality programs and services to our community.

2025 Balance: $60,700

2026 Balance: $73,751

Looking Ahead

The FY2026 audit reflects positive financial progress for Dover-Eyota Public Schools. Stronger fund balances put the district in a better position to address future challenges, maintain our facilities, and support educational opportunities for students.

One particularly encouraging development is our enrollment stability. Student enrollment has remained steady, strengthening our financial outlook and delaying the potential need for an operating referendum. In previous district updates, I shared that we were forecasting a possible operating referendum vote in November 2027. I'm happy to report that based on our current five-year financial forecast, we no longer anticipate needing an operating referendum vote in 2027!

This is welcome news for our district and community. We will revisit our five-year financial forecast at this time next year to better determine when an operating referendum may be necessary. Continued stable enrollment, or even better, enrollment growth, could allow us to push that need out several more years. Fingers crossed!

While our financial position is stronger today than it has been in recent years, that doesn't mean our future financial challenges have disappeared.

One concern is the potential elimination or reduction of Alternative Delivery of Specialized Instructional Services (ADSIS) funding beginning with the 2027–2028 school year. Dover-Eyota currently receives approximately $315,000 in ADSIS funding, which supports multiple teaching and paraprofessional positions that provide additional academic support to students. If this funding is eliminated, we would face a significant budget challenge as we determine how to continue providing these important services.

Another concern is the continued rapid increase in health insurance costs. These rising expenses put additional pressure on our operating budget and will be an important factor as we enter upcoming teacher contract negotiations.

Overall, there is a lot to be encouraged about. Our district's financial position is improving, enrollment is holding steady, and we've extended our anticipated timeline for an operating referendum. At the same time, we know challenges ahead will require careful planning and thoughtful decisions.

Our commitment remains the same: To be responsible stewards of taxpayer dollars while providing the best educational opportunities possible for Dover-Eyota students.

Upcoming Facility Improvements

Looking ahead, the district has several significant facility improvements to address in the coming years. Many parts of our buildings are aging, and we want to be proactive in maintaining our facilities rather than waiting for costly problems to arise.

Some of our upcoming needs include:

• Elementary School Roof: Portions of the roof are approximately 30 years old and will need replacement.

• High School Gym Roof: This roof is more than 20 years old and will need attention in the coming years.

• High School Boilers: Our boilers are approximately 23 years old, and we need to begin planning for their eventual replacement.

• High School Athletic Hallway Bathrooms: These bathrooms are more than 20 years old and need renovation and updates.
  
  

We will explore funding these projects through a combination of Long-Term Facilities Maintenance (LTFM) funds, Operating Capital funds, General Fund resources, or other available funding sources. The timing of these improvements will depend on our facilities' condition, available funding, and the district's other financial priorities.

Our goal is to plan ahead, prioritize the most pressing needs, and complete these improvements responsibly. Maintaining our facilities is essential to protecting the community's investment in our schools and ensuring safe, functional, and welcoming spaces for our students, staff, and visitors.

You may or may not have heard that Minnesota voters will see a statewide ballot question this November related to public education. Because many school districts across the state (including Dover-Eyota just a couple of years ago) have asked voters to consider operating referendums, I wanted to get this information to you well in advance to avoid any confusion. This ballot question is not an operating referendum, is not specific to Dover-Eyota, and, if approved, will not directly increase your property taxes, income taxes, sales taxes, or any other taxes. It is a statewide constitutional amendment regarding Minnesota's Permanent School Fund. Below is factual information provided to school districts to help voters better understand the proposal before casting their ballots this fall. Again, Dover-Eyota does not plan to seek an operating referendum this fall. This is a statewide ballot question that will appear on ballots across Minnesota.

This November, Minnesota voters will consider a constitutional amendment related to the Permanent School Fund, a resource that has supported public education since Minnesota became a state in 1858.

Here are a few key facts:

• The Permanent School Fund already exists and currently supports public schools throughout Minnesota.

• The fund has grown to more than $2.3 billion through revenue generated from school trust lands and investment earnings.

• The proposed amendment does not raise property taxes, income taxes, sales taxes, or any other taxes.

• The recommendation came from a nonpartisan legislative task force that unanimously recommended modernizing the distribution formula.

• The proposal later received strong bipartisan support from the Minnesota Legislature.

• If approved by voters, the amendment would increase support for public schools while preserving the long-term strength of the fund.

Learn More:

To learn more about the Permanent School Fund amendment, including frequently asked questions, background information, and voter resources, visit:

www.mnPSFamendment.org

As always, we encourage community members to become informed and participate in the election process.

• Dover-Eyota High School will be the voting location on November 3rd. Details about where to park, how to easily access the Forum Room will be coming from Principal Carlson very soon.
  
• Upcoming board meetings: November 9 (Canvassing of votes) and November 16 (Regular Board Meeting)
  
  

Thank you for taking the time to read this district update and for staying engaged with your child’s school district. Go Eagles!

Jeremy W. Frie
Superintendent