Town Hall Meeting

Facing our Future Together

Strong Financial Stewardship, Ongoing Challenges
In November, I shared that Prior Lake-Savage Area Schools once again received a clean financial audit—affirming our strong stewardship and responsible use of taxpayer dollars. While this recognition is important, it also highlights a difficult reality: despite operating efficiently and spending well below metro averages, inadequate state funding continues to force ongoing, unsustainable budget reductions.

Current Financial Position
Our midyear budget update shows the district’s fund balance is now 8.46%, placing us within Board policy and slightly above our minimum goal of 8%. While this improvement is positive and allowed us to present a structurally balanced budget to the School Board on January 12, the fund balance is designed to provide short-term stability, not a long-term solution. Broader financial pressures—driven by rising costs and insufficient revenue—remain and will require additional budget reductions.

Long-Term Financial Planning
Recently, our Board and administrative team engaged in a conversation focused on long-term financial planning and ensuring the district has sustainable resources to support both students and staff. As part of that discussion, we reviewed how state education funding has not kept pace with inflation and how Prior Lake–Savage Area Schools has one of the lowest voter-approved operating referendum amounts in the seven-county metro. 

Voters last approved an operating referendum in 2017 at $624 per pupil, without inflationary adjustments. Because the referendum was not adjusted for inflation, its purchasing power has steadily declined over time, adding to the financial pressures the district now faces. Had inflation been included, the district would have received approximately $12.6 million more over the life of the referendum—resources that could have helped offset ongoing budget pressures.

It is important to emphasize that no decisions regarding a future referendum have been made at this time. The Board reviewed preliminary options for discussion purposes only, including potential timelines and estimated impacts. 

Community Engagement and Next Steps
Looking ahead, our focus turns to community engagement as we work through these budget challenges together. We will host a Town Hall meeting to discuss school finances and potential paths forward on Thursday, February 5, 6-7:30 p.m. at Hidden Oaks Middle School in the Oakview Room. All community members - and staff who wish to participate - are invited to join us to review the district’s financial picture, share input on their priorities and values, and learn about budget reductions already made. We will also provide information on what the financial future may hold, including the possibility of a voter levy in the coming months. Your input and engagement are vital as we navigate these challenges together.

Yours in partnership, 

Dr. Michael J. Thomas
Superintendent, Prior Lake-Savage Area Schools