‘Perfect storm of a budget crisis’: School board weighs finances, new online learning program

BEMIDJI -- In the wake of the failed referendum and dropping enrollment due to COVID-19, the Bemidji school district is facing a large budget crisis, which the Bemidji Area Schools Board of Education school board began to grapple with Tuesday night. The board also weighed implementing an online learning program that would likely be a part of the alternative learning center, which its advocates see as a way to mitigate student enrollment loss and potentially generate revenue.

The board heard some hard truth from Director of Business Services Krisi Fenner, who laid out the numbers of what the district’s fund balance could look like over the next few years without hold harmless legislation, cuts or an increase in enrollment. The current budget deficit is around $1.4 million.

She then showed a loss of $2.8 million, which Fenner said was a direct result of the loss of 280 students due to the COVID-19 pandemic.

She showed a projected 2022 fiscal year fund balance of negative $8.69 million.

“This is our worst-case scenario,” Fenner said. “But it’s also important that we understand the perfect storm of a budget crisis that we are facing. Between our failed operating referendum, a loss of 280 students due to COVID-19 and our depleted fund balance, we are facing extremely hard decisions as we are forced to make reductions to balance our budgets.”

She told the board while the number may not come to be, the decisions made now should reflect it as a definite possibility.

“We’ve got to act as if no help is coming and we’re on our own,” Fenner said ominously. “The goal would be not only to get through the crisis that we’re in now but also to get back to a place of financial well being so that if something like this happens in the future, it’s not a panic.”

The board passed a resolution to direct administrators to begin exploring which programs and positions could be eliminated when/if the need arises, these choices will likely be finalized in the March or April board meeting.

Many, many more students than initially expected chose to opt for full-time distance learning this school year. A grand total of 986 of them as of Nov. 16. This is nearly 20% of the total enrollment in the district.

A group of educators in the district have been working for the past few months exploring the idea of potentially creating a new school within the district, a grades 7-12 online learning school, which they believe could possibly help mitigate student enrollment loss and potentially generate revenue. The group consists of Drew Hildenbrand, Kyle McMartin, Jason Stanoch, Colleen Cardenuto and Kyle Resler.

Bemidji Middle School Assistant Principal McMartin addressed the board Tuesday night.

McMartin acknowledged that many of the students who chose distance learning did so for health reasons and may not be interested in continuing after the pandemic is over, but some may want to continue learning online.

Giving them the option to do so could help with the district’s enrollment problem, he said, by mitigating the potential for students who liked distance learning leaving BAS for an online program. In the future, this program could net students from regional districts who want the opportunity to learn online.

“If they are interested in doing it now, what prevents them now from leaving?” McMartin said. “How are we holding those students?”

“Distance learning is not for all students,” McMartin went on to say. “There is absolutely a cell size of students that have chosen this for whatever reason, they’ve worked from within that structure to become successful.”

McMartin provided an overview of what it might look like if Bemidji formed an online school model, likely as a part of the alternative learning center.

He laid out the group’s goal, to “meet the needs of students who are interested in continuing their education via an online platform for any reason.”

The school would offer both general and advanced courses, and not be treated as a credit recovery program.

McMartin saw this as a way to retain enrollment and perhaps draw students from other districts without this option. In the future, it could potentially serve as a flexible option, a way to fix scheduling errors or take more classes, but for the beginning, he said the group would be starting small.

“ISD 31 could offer distance learning but with a local feel,” McMartin said. “We could offer distance learning right here in Bemidji for our students, and we might be able to say, ‘You know what? On Tuesdays, why don’t you come in when you need help?’ It’s different than having a Connections Academy feel that’s down in Minneapolis.”

The board had many questions for McMartin about what this would cost, and if it would be doable under the current budget restrictions.

He said many of these were still unknowns, but that they hoped it could become a revenue builder, and that the goal was to avoid hiring entirely new staff members, and instead shift around existing staff members depending on the number of enrolled students in the online program.

McMartin pushed the board to approve some sort of resolution supporting the idea on Dec. 21, which he said would allow the group to move forward with their application to the state.

“We would like a resolution to get going on this,” McMartin said. “This is something we would like to move forward with, and we would start small.”

“What we’re seeking is permission to explore this opportunity because we might have 100 to 300 students who choose not to come back in person when we return, so we have to have an opportunity to explore this option,” BMS Principal Drew Hildenbrand added.

Board members expressed hesitation about approving this measure, due to not having enough information.

“I just like good quality information and this is a little concerning to me,” said school board member Ann Long Voelkner.

Superintendent Tim Lutz expressed support for exploring the online school idea. He said, “the opportunity to have more students come back, including being able to enroll students from charter schools who are no longer our students, would poise us to be able to be taking in some more revenue that if we don’t move forward with this, we would lose.”

“That is one of my biggest concerns, that we will not have these students come back to us next year. It’s important that we move forward with the question and let this group continue its work,” he added.

The board ultimately decided to let the group continue to explore the idea, with the expectation that they would check in on a monthly basis with new information.

Also during the meeting the board:

• Heard new COVID-19 measures implemented by Gov. Tim Walz. Schools in in-person and hybrid learning models will soon need to provide voluntary saliva testing for all staff members every two weeks. Lutz also spoke to the board about the current learning model status and addressed questions regarding vaccines. “For the great majority of the population, the vaccines probably will not go into effect or be delivered until five or six months from now,” Lutz said. “So, we’ll be wearing masks for a while, more than likely, hybrid is probably the next step for secondary, until the numbers go down and things happen with the vaccine.”

• Certified the 2020 payable 2021 levy limit at $11,054,514.83, which is the maximum allowed and an increase of 3.91% from this year’s levy authority. School boards certify a levy limit every year in December, and cannot exceed this limit except in the cases of a new referendum or extreme circumstances like natural disasters.

The entire Bemidji Area Schools Board of Education Dec. 21 meeting can be viewed on the Bemidji Area Schools YouTube page.