Special School District reports clean audit but warns of multi‑year deficits

The Special School District of St. Louis County’s governing council heard a clean audit opinion and a stark budget forecast on March 2.

CFO Cindy Reidelman told the council the district’s financial‑statement audit returned a clean opinion with no findings, but the district is running persistent deficits driven largely by rising salary costs and timing issues for tax and state revenue. “We cannot sustain this. We have to get to a balanced budget,” Reidelman said during the presentation.

Why it matters: the audit’s clean opinion confirms the district’s fiscal reporting is in order, but staff presented multi‑year internal forecasts that show deficit spending continuing into the FY27–FY29 window unless the district takes greater corrective action. Reidelman’s presentation described a fund‑balance level that has fallen from earlier targets and flagged both a conservatively budgeted reduction in state adequacy payments and a senior property‑tax credit impact.

What the council heard: Reidelman reviewed year‑to‑date revenues through January 2026 and said timing delays from Saint Louis County’s new software contributed to lower property‑tax receipts in December; she said SSD also recognized approximately a $3.4 million senior property‑tax credit charge. On the state side, staff reflected an $8.5 million conservative reduction tied to how the state is paying adequacy dollars this fiscal year and a roughly $3.0 million retroactive recalculation for the prior year. Taken together, staff modeled continued deficit spending in the coming years.

Reidelman outlined three near‑term strategies the district is using in its internal forecast: staffing reallocations, a capital‑to‑general fund tax‑rate reallocation (a temporary 'riding the ship' shift) and non‑wage cost containment (purchases, contracted services, transportation). She warned those measures alone may not be sufficient to stabilize reserves.

Council members pressed staff on specifics: Harold Austin asked whether the shortfall reflected late state or county payments, and staff confirmed state assessed or utility payments typically arrive in late February or early March and that timing explained part of the variance. Council members also sought detail about an increase in purchase‑of‑service spending, which Reidelman said is driven in part by growing substitute teacher costs, contracted transportation, and legal and audit fees; she also noted roughly 81 teacher vacancies are being covered daily by substitutes.

Superintendent response and options: Superintendent Dr. Macklin said the administration wants to exhaust internal levers before pursuing a tax levy, telling the council a levy would affect the entire county’s taxpayers and should be considered only after other options have been implemented and the district has earned community confidence.

Action taken: The governing council approved the FY26 budget adjustment by voice vote during the meeting.

What comes next: Finance staff said they will continue to refine forecasts as additional tax settlements are received and will return to the governing council and board of education with updated quarterly financials and budget recommendations ahead of the final FY27 adoption process in June.