With the sobering reality of a continuing decline in student enrollment, the Hastings School Board unanimously approved the district’s 2025-26 fiscal year budget during its May 21 meeting. Director of Finance and Operations Jennifer Seubert presented the comprehensive financial plan, which reflects a strategic balancing of revenues and expenditures in the face of shifting demographics and evolving funding challenges.
The adopted general fund budget totals approximately $70.7 million in expenditures against $68.8 million in revenues, resulting in a planned drawdown of $1.85 million from the district’s fund balance. The projected unassigned general fund balance as of June 30, 2026, is $17.1 million—representing 24% of the district’s operating expenses, comfortably above the board’s 16% policy minimum.

Declining enrollment
Enrollment continues to be a critical concern. The district projects an Average Pupil Unit (APU) count of 4,275 for 2025-26—down 89 students from the previous year. “We know our actual enrollment numbers come in October, and we will adjust at that time,” Seubert explained. “But this decline does impact both our funding and our staffing models.”
The district does receive declining enrollment revenue—a portion of the state’s general education formula—to help cushion the loss. However, that revenue is only a partial offset and cannot fully replace the funding lost due to fewer students.

Revenue outlook
Total revenue increases for 2025-26 amount to $557,000. Notable changes include a 2.74% increase in the general education formula allowance, resulting in an additional $509,000. Special education state aid is expected to rise by $330,000, though Seubert noted this estimate remains conservative. Meanwhile, certain grants are expiring, including a non-exclusionary discipline grant and adjustments to the Multi-Tiered Systems of Support (MTSS) grant, contributing to a $149,000 drop in grant revenue.
The district also anticipates a $200,000 decline in interest income due to market trends and planned use of fund balance, as well as smaller decreases in community partnerships and rental income. Despite modest property tax growth of $15,000 and a $62,000 increase from the Local Collaborative Time Study (LCTS), overall revenue growth remains limited.

Payroll and staffing
The largest driver of expenditure increases is compensation. Payroll and benefits are projected to rise by approximately $1.86 million. Teacher staffing is set at 283.51 Full-Time Equivalents (FTE), down 7.84 from the previous year due to enrollment-based adjustments. All bargaining units have settled contracts except for teachers and paraprofessionals.
“About 77% of our budget is tied up in people,” Seubert told the board. “We’re very much a people-focused budget.”

Operational changes and adjustments
Several internal budget adjustments were made to align costs with available funding sources. English Language Learner expenses, for example, are being moved to compensatory funding, reducing the unassigned expenditure line by approximately $476,000.
Other key changes include:
•A $123,000 increase in transportation costs, in part due to early childhood programming adjustments.
•$105,000 for an additional school resource officer, part of the district’s Safe Schools initiative.
•$80,000 to accommodate the newly enacted state paid leave tax, effective January 1, 2026.
•$43,000 more in property and liability insurance.
•$10,800 for election-related expenses in the upcoming year.
At the same time, legal fees are expected to decrease by $25,000 and credit card processing fees by $60,000.

Fund balance and long-term planning
The district's total general fund balance is expected to decrease from $32.2 million at the end of the 2024-25 fiscal year to $30.3 million by the end of 2025-26. Despite this planned reduction, Seubert emphasized that the district remains in solid financial condition.
“Our fund balance policy calls for maintaining at least 16% in unassigned reserves,” she said. “We are still at 24%, which gives us some flexibility as we navigate enrollment trends and future funding uncertainties.”
Restricted and committed accounts also saw targeted spending plans. For instance, $400,000 remains earmarked for potential upgrades to the district’s gymnastics facility. Gifted and Talented programming and staff development will utilize portions of their carryover funds, resulting in planned overspending in those categories.
The board will revisit the budget in the fall for its annual revision. Updates will reflect October 1 enrollment counts, finalized staffing, any new legislative actions, and findings from the 2024-25 audit. The district is also preparing for the expiration of its current voter-approved operating referendum, with the final year of that revenue stream slated for 2027-28.
In the meantime, the board praised the work of Seubert and the finance team. “Thank you so much, Jen, for all your work on this presentation. It’s extremely comprehensive and informative,” said Board Chair Carrie Tate.
The motion to approve the budget passed 6-0. Board Member Director Melissa Milner was excused prior to the vote.