Brainerd board backs resolution to seek $1 million transfer from construction fund to cover shortfall

The Brainerd Public School District board agreed at a workshop Feb. 19 to prepare a resolution supporting legislation to transfer $1,000,000 from the district's school building/construction fund into the general fund to help offset a projected drop in compensatory revenue.

District staff presented new projections showing fiscal-year 2026 compensatory revenue could fall as much as $1,300,000 from earlier estimates; staff said that change, together with a tight legislative calendar, prompted the request to have the district's legislative delegation carry a one-time transfer. Director Ward moved that the board signal its support and notify Representative Josh Heintzeman to carry the bill; the board agreed to move forward with a resolution rather than a formal roll-call vote at the workshop.

Not all trustees were convinced. Board member DJ said the move was unnecessary, noting the district held significant reserves and warning that transferring funds voters had dedicated for buildings could leave the district short for future capital needs. "We're not stealing anything," DJ said in his remarks, and later characterized taking the money as "robbing Peter to pay Paul." Marcy (district staff) replied that the requested $1,000,000 would come from interest earnings above the funds committed to voter-approved projects and would not reduce the projects paid for by the bond proceeds. "This was a bonus," Marcy said; "it is literally taking that interest earnings and trying to help offset our deficit in the general fund."

Staff laid out the budget arithmetic: the district's building bond balance is about $2.7 million before a roughly $500,000 draw anticipated this month; construction-fund interest earned about $54,000 as of December and projections are sensitive to market changes. Without the transfer, staff said the district would face about a $1.9 million dip into fund balance next year; with a $1,000,000 one-time transfer that shortfall would be roughly $900,000.

Board members discussed process and precedent for taking action during a workshop and favored using a resolution and a straw indication of support so Representative Heintzeman would know the district backing; no formal roll-call vote was recorded at the session. The board directed staff to draft the resolution and notify the legislative delegation. If the bill advances, any final transfer would be a one-time change to be enacted through the legislature.