The board’s meeting began with a detailed presentation by Luke Graden from CLA, highlighting the district’s financial audit. Graden reported a “clean audit opinion,” confirming that the financial statements were accurate and complied with legal requirements. He emphasized that there were no findings on the financial reporting or compliance aspects, reflecting positively on the district’s financial management. The audit reviewed internal controls and compliance with both Minnesota legal standards and governmental regulations, confirming the district’s adherence to these protocols.

Graden detailed the district’s financial landscape, noting that Owatonna Schools’ general fund revenue stood at approximately $78.6 million, with state funding accounting for 79% of this total. Despite a decrease in federal funding due to the expiration of COVID-related relief, state funding increased by $3 million from the previous year. The presentation also highlighted that a significant 84% of expenditures were dedicated to student instruction, a figure described as exceptionally high.

The audit presentation transitioned into a discussion of fund balances, where Graden pointed out a decrease in the unassigned fund balance from the previous year, while the assigned and committed fund balances saw an increase, mainly allocated to the career pathways program. The presentation also noted a substantial drop in the long-term facilities maintenance fund balance, attributed to capital projects requiring delayed fund utilization.

Enrollment trends were another focal point, with a slight decline in average daily membership (ADM) noted. The decrease of about 30 students this year reflects broader demographic trends impacting many districts. Despite these challenges, the district’s enrollment figures have remained relatively stable.

The meeting addressed the district’s budget projections, estimating total revenues at around $98 million against expenses of approximately $106 million. This projection reflects ongoing financial challenges, particularly in special education funding, where underfunding continues to strain resources. The board was informed that despite potential increases in special education funding, the general fund is projected to face a deficit, although adjustments in the amended budget could lead to a break-even scenario.

A significant portion of the meeting was devoted to discussing property taxes and their implications for district finances. The board reviewed the process of establishing property tax levies, which involves multiple steps from property assessment to legislative formulas. The proposed property tax for the fiscal year 2026 includes a 2.24% increase, with the general fund levy rising by 4.1%. Despite this increase, the revenue remains fixed due to state formulas, emphasizing that changes in levies do not necessarily translate into increased funding for the district.

The meeting also included a discussion on the food service fund, which operates independently and has shown a steady increase in its balance, now approaching $2 million. The board expressed satisfaction with its financial health, as the fund recorded a gain contrary to a budgeted loss.

Additional topics included a review of the recent fundraising breakfast organized by the high school’s counseling department to support homeless and disadvantaged students, which successfully raised over $1,800. Board members also discussed upcoming community engagement initiatives aimed at strengthening communication with the public.

In the closing segments, the board approved the audit for the fiscal year ending June 30, 2025, and expressed gratitude towards the administrative team for their efforts. Gifts to the district were also approved, reflecting ongoing community support. The meeting concluded with a scheduled truth and taxation presentation, providing an overview of the proposed property tax levy, a requirement to allow public input on the matter.