Family December 2025 Knight Line

As we approach winter break, I want to wish you and your loved ones a very happy holiday season. I am deeply grateful for your trust, partnership, and continued support of our schools, all of which allow us to keep students at the center of every decision we make. I hope this holiday season and winter break are filled with moments of joy, love, peace, and meaningful time together as you rest and recharge. Thank you for being such an important part of our school community.

All Minnesota school districts are required to engage a third-party auditor to conduct an independent financial audit at the conclusion of each fiscal year. For school districts, the fiscal year runs from July 1 to June 30, with the final audit report presented to the school board in December.

At the December 1 school board meeting, auditors from LB Carlson presented the FY2025 audit report.

LB Carlson issued an unmodified opinion on the district’s financial statements, the highest rating possible. The audit revealed no deficiencies in the district’s internal controls, no instances of noncompliance, and no findings related to the district’s compliance with Minnesota laws and regulations.

Highlights of the Audit:

• General Fund: The unassigned fund balance decreased by $335,707 from 23.6% in FY2024 to 21.5% in FY2025.

• Revenue was 4.0% higher than projected, due to increased state funding (basic formula and special education aid), higher investment earnings, additional local revenue sources (activity fees, rental fees, admissions, and donations), and the strategic use of federal dollars.

• Expenditures were 1.1% lower than projected, primarily due to salaries and benefits coming in under budget, lower-than-expected spending on supplies and materials, and reduced costs for purchased services.

• Food Service: The food service fund ended FY2025 with a fund balance increase of $20,333. The ending fund balance of $3,197,649 represents a 58% fund balance.

• Community Service (AKA Community Education): Community education fund balance decreased by $391,129. The ending fund balance of $764,988 represents a 13.5% fund balance.

We are proud of the positive outcome of the audit and the fund balance of 21.5%, which reflects where the district ended fiscal year 2025 as of June 2025. It is important to clarify, however, that this is not our current operating fund balance.

Based on our multi-year projections, the fund balance for FY2026 is 13.29%, followed by a decline to 6.81% in FY2027 and 0.56% in FY2028. When the FY2026 budget is revised in February 2026, we anticipate the current 13.29% to increase, which is positive news. Even with that improvement, the projections show significant fund balance decreases in FY2027 and FY2028, underscoring the need for continued fiscal caution.

While we are pleased with the audit results and the disciplined financial management that led to a strong FY2025 ending balance, it is critical to consider our five-year financial projections rather than viewing any single year in isolation. Our funding is largely driven by student enrollment, which is stabilizing. As responsible stewards of taxpayer dollars, we will continue to closely monitor both our short- and long-term financial outlook and make thoughtful, fiscally responsible decisions.

The FY2025 audit reports are posted on the district webpage here. We encourage all stakeholders to review them, and we are happy to answer any questions or provide further clarification. Open communication and a commitment to integrity ensure we remain effective, responsible, and aligned with the needs of our community.

The STMA FY2026 Budget Process and Timeline was approved by the school board on December 1. The budget process and timeline outline steps from now until the school board approves the FY2027 budget in June 2026. The process involves many stakeholders and many opportunities for stakeholder input.

STMA is proud to prioritize students above all else. According to the most recent independent audit, STMA stands out with exceptionally low administrative expenditures. Our commitment remains focused on putting resources where they matter most — in the classrooms. Take a look at the per-pupil administrative expenditure comparison from the latest audit to see how we’re keeping students first!

• Statewide = $1,372

• Metro = $1,410

• STMA = $645

The 2025 STMA Legislative Platform focuses on funding, equalization, and local control. Please take a few moments to review the platform and the legislative priorities the district has set for this legislative session. The school board approved the platform on December 1. Mark your calendars for the STMA Legislative Forum on February 4 at 6:00 p.m. in the STMA Middle School West Auditorium.

12-01-2025 Regular Meeting

The Board held its Truth in Taxation Hearing

The Board took action on the following items:

• FY2025 Audited Financials – Financial Management Report, Financial Statements

• Certifying 2025 Payable 2026 Levy

• FY2027 Budget Process and Timeline + February Work Session

• Resolution Authorizing the Issuance of General Obligation Bonds, Series 2026A

• STMA Legislative Platform FY2026