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The Shakopee school board last week unanimously voted to close Pearson 6th Grade Center and redirect students to area schools next fall, a move the district says will save $800,000 and help prepare for a projected deficit in the next two years.

School leaders had planned to revert Pearson back to an elementary school once a much-anticipated high school expansion was completed in the district. But with operational costs at the renovated Shakopee High School projected to reach $1.2 million a year, board members reconsidered Pearson’s fate.

“Is it good news? I’d say no,” Acting Interim Superintendent Jon McBroom said during the Jan. 8 school board meeting. “Is it a reasonable position to take considering where we are at financially? I believe it is, because if we don’t do that you’re looking at a huge cut across the district.”

Ninth-graders will begin attending the expanded high school after the $102.5 million addition opens next fall, and sixth-graders will join East and West Junior High schools for the first time since 2011.

Most of Pearson’s faculty and support staff would be dispersed throughout the district, but McBroom cautioned that not all jobs would survive.

As a result of the move, controversial changes to attendance boundaries will remain the same for at least a year. Although two of Shakopee’s five public elementary schools, Eagle creek and Jackson, are over capacity, they can continue operating awhile longer at projected enrollments, McBroom said.

Board member Shawn Hallett endorses the plan.

“It feels like the right choice for our district right now in the situation that we’re in,” Hallett said. “I also know there are a lot of families who might do a little happy dance when they hear this, knowing that the kids get to stay where they are for at least another year.”

Pearson could reopen in a year or two if needed. The board will revisit the matter next winter.

“That building isn’t a throwaway building by any stretch of the imagination,” said McBroom. “It needs to be used in this district, it’s just a matter of what’s the best use for it.”

School board Member Matt McKeand was not in attendance for the 6-0 vote approving the plan.

This isn’t the first time Pearson has temporarily shut its doors to save money. Board members took a similar step in 2011, opting to transfer Pearson’s teaching staff to Jackson Elementary while they prepared to convert the building into a sixth grade center.

Yet this time, the savings from Pearson’s closure would not be enough to cover increased operational costs at the high school. The school board still needs to raise $400,000 more to open the high school without deepening the shortfall.

McBroom said the district is facing what he called a “worst-case scenario” — a $500,000 deficit for the district at the end of this fiscal year that will require deep budget cuts. Last month the board approved a property tax levy that’s up 9.8 percent over 2016. So far, school leaders aren’t ruling out more layoffs.

And the 2018-19 school year will be likely worse. Even with reductions, board members could face a deficit surpassing $2 million. McBroom told board members to curb their expectations for next year to brace for difficult decisions.

“We need these facts, and we need this reality,” Board Chairman Scott Swanson told McBroom. “It’s hard to hear, but we appreciate it.”

Between July 2016 and June 2017 the district’s fund balance dropped from $2.5 million to $1.1 million. The number was significantly lower than its revised 2016-17 budget had projected. Even after learning of a $4.5 million shortfall attributed to “human error,” district officials had planned to end the year with $1.8 million in the bank.

The district had $92.3 million in revenue last year and spent $97.2 million. An audit attributed a significant chunk of the shortfall to an increase in employee benefits, primarily from an unexpected rise in health care costs.

District policy states that the unassigned fund balance should hover between 8 percent and 12 percent of the district’s annual spending. By June 30, the balance had dwindled to 0.7 percent.

In recent months, school administrators have worked to regain public trust as emboldened local activists demanded a house cleaning in district offices.

Groups like Friends & Concerned Taxpayers of Shakopee (FACT) pushed for a criminal probe into former Superintendant Rod Thompson’s credit card use and are now demanding a purge of the school board for failing to recognize what its members call rampant and unchecked overspending.

Swanson has acknowledged that activists helped uncover flaws in the district that needed to be examined.

“Because of their diligence, we know things that we may have been on track to find out, but found out sooner,” Swanson told the Star Tribune last month. “For that, I definitely give them credit.”

Liz Sawyer • 612-673-4648