LYND — Due to a handful of factors — including expiration of federal funds, rising operational costs and a decline in student enrollment — Lynd Public School is facing financial challenges and is looking at options to reduce costs.

“School districts across the state, and even nationwide, are facing increasingly difficult financial realities,” Lynd Public School superintendent Misty Riebel said. “As we’re looking at coverage, as we’re talking about the expiration of federal pandemic-relief funds, of course a rise in operational costs and continued unfunded mandates, or underfunded mandates, there’s just significant strain on many local education systems across Minnesota.”

Lynd is currently reviewing options and recommendations on how to help offset its financial pressure. Riebel said the district is looking to, as current enrollment and projection funds stand, reduce approximately $400,000 over the next two years in expenditures.

Lynd joins other area schools in the region that are facing budget challenges due to similar reasons, such as the Marshall Public School District and Murray County Central. MPS is facing a $2 million budget shortfall for the next school year and recently had an operating referendum fail amongst voters in November, while MCC had an operating levy increase passed by voters in November.

The Lynd district cited the expiration of ESSER funds as one of the primary reasons as to why the school is feeling financial pressure. The ESSER funds were from the federal level that expired last school year, which were the pandemic-relief funds that school districts were receiving.

“Once we started looking at the budget and how we are looking at projections, we also took into account historical data. So, Lynd is a teeny, tiny district with a lot of unique characteristics and a lot of unique opportunities for kids. Through that, the district was in some financial struggle, and then those relief funds came in, those ESSER (Elementary and Secondary School Emergency Relief) funds, they helped offset expenses in the last few years,” Riebel said. “Now that we’re looking at the projections, we’re needing to offset those deficits and help restructuring. (We’re looking at) how are we proactively planning, so we can make sure, and ensure, we have the best possible education experience for students.”

Much like MPS when pursuing its referendum, district leadership also noted that the pandemic-relief funds expiring as a reason to their district budget challenges as well, which were being used for student-support services. There was a possibility that without the federal pandemic funds, the budget challenges would have become a more prominent issue earlier on.

“Many, many, many districts across Minnesota as a whole, especially the districts that I am in connection with through our regional superintendent group, many are facing these exact same challenges,” Riebel said, who is in her first year as the Lynd superintendent.

Riebel said Lynd has 168 on-site students enrolled this school year, which is approximately five to six students less than last year.

Enrollment drives in revenue for school districts, and the state’s general education formula has trailed the rate of inflation per pupil over the years.

“We’ve been talking about these conversations since November and in December, when we talked about truth and taxation, when we talked through with our auditors. We’ve been having conversations,” Riebel said. “We have worked with our financial advising team to create a budget projection model that we can project out the next five years. Through that, we’re really able to see that transparency of how we need to shape our fiscal budget over the next couple of years, so we can be fiscally responsible.”

Riebel noted that Lynd is currently on a renewed operating referendum that was restarted last spring on a 10-year term.

If financial saving measures are not made, according to Riebel, Lynd Public School is projected to enter statutory operating debt (SOD) status in the 2027 school year.

“If we make no changes, if we continue as is, as we are currently spending, and we don’t look at anything, one, it would be irresponsible for us to do that. But two, if we go so far into debt, like using up our fund balance, then the state looks in and you’re considered to be in statutory operating debt, which would be in the 2027 school year, is what it’s projected,” Riebel said.

According to Minnesota Statute 2025, section 123B.81, a district will go into SOD status if the school’s operating debt is more than 2 1/2 percent of the most recent fiscal year’s expenditure amount. The district and school board would then be required to create a special operating plan, which will need to be looked at and approved by the Minnesota Department of Education.

As are all Minnesota school districts, Lynd is also currently in the process of renegotiating teacher contracts and collective bargaining agreements. Districts statewide negotiate contracts every two years.

While the Lynd Public School District looks to pursue solutions to ensure long-term financial health with minimal impact on student education and opportunities, the board and district leadership said they will continue engaging in conversation about next steps.

“All districts across Minnesota have to have a budget in place by July 1 … So our next couple of board meetings, we are hoping to have some recommendations from different committee work that is taking place on where some of those budget reductions can occur, so we can be more even within that budget,” Riebel said. “It’s our job to continue to advocate for sustainable, predictable funding solutions at both the state and federal funding levels. We are working with local legislators. We’re working with the state advocacy groups to address these challenges that many districts are facing across the state.”

Lynd’s upcoming school board meetings, open to the public, are scheduled for May 11 and June 8, both at 6 p.m.