Superintendent Krenz and district staff told the Albert Lea Public School District School Board that a multi‑year drop in student enrollment, combined with the scheduled end of federal COVID relief funds, will force spending cuts to maintain fiscal stability.

The district presentation, delivered by David (staff member), traced enrollment declines to the 2018–19 school year and noted an aggregate loss “over 300 students” from 2018 to 2024, an average decline of about 51.5 students per year. David said the district received ESSER (COVID relief) funding through September 2024 that temporarily offset some reductions but that “the problem is once that money has gone away, the expenses remain.”

Why it matters: student counts drive state and federal aid formulas. With fewer students the district receives less operating revenue, the presentation said, and the district must either raise local revenue or cut costs to keep its 12% fund balance in place.

David outlined near‑term enrollment projections the board will use to shape the 2025–26 budget. The presentation estimated a loss of about 45 students in 2025–26, 68 in 2026–27 and 89 in 2027–28 — an average projected decline of about 67.3 students per year over that three‑year span. The district also cited an historical pattern, based on live births in Freeborn County and an external demographic study completed for 2023–24, that roughly two‑thirds of children born locally enroll in Albert Lea schools.

Board members emphasized how the formula treats students differently by grade level. A board member noted that the district loses a greater share of revenue when older students leave through open enrollment because older students carry higher weighting in the funding formula; David confirmed kindergarten students generate less revenue than older pupils. Another board member reiterated that the 12% fund balance is not a discretionary “rainy day” fund but is intended to cover timing shortfalls in state aid and avoid borrowing costs.

The presentation did not include a formal vote. District staff said they are preparing a revised budget for upcoming meetings and that options include asking voters for additional local operating revenue or continuing expense reductions.

Board members and staff said they will discuss the revised budget at the board’s upcoming April meetings.