ISD 2142 school district will enter statutory operating debt (SOD) for the 2026-2027 school year with a $6,169,283 deficit.
Minnesota state statutory law categorizes a district’s fund balance as SOD if the district’s operating debt represents more than 2.5% of the total amount of the most recent fiscal year’s expenses.
ISD 2142’s SOD totalled to -6.39% for the 2025-2026 school year. Budget documents presented at a school board working session last Tuesday project a climb in operating debt to -18.03% of the district’s expenses for the upcoming fiscal year.
The district has faced challenges with declining enrollment in recent years, contributing to its current financial status through a decrease in state aid.
Among its five schools — Northeast Range, South Ridge, Cherry, North Woods and Tower-Soudan Elementary — ISD 2142’s average daily membership (ADM) is projected to drop by 27 students for the upcoming academic year, from 1,695 last year to 1,668.
This marks ISD 2142’s lowest mean daily enrollment of any year in the district’s nearly two decades in operation. ADM averaged nearly 1,900 students each year until Covid, climbing to its highest at 2,016 ADM for the 2019-2020 academic year before fluctuating down to its current student membership.
Northeast Range reached its highest daily membership in 20112012 with 342 students enrolled each day on average, followed by a steady decline to 177 in 2025-26, which is projected to drop by another four students to 173 for the 2026-27 academic year.
The Adopted 26-27 Expenditure Summary distributed at the working session outlined employee benefit expenses as another key contributor to the district’s deficit. For 2026-27, health insurance costs are projected to jump by $718,000 or more.
Per Minnesota law, ISD 2142 will now be required to submit a special operating plan to the Minnesota Commissioner of Education before January 31, 2027 for approval. The document will outline the district’s chosen pathway to cut back expenditures.
At the regular school board meeting following the working session, the board designated Brian Masterson — the district’s new superintendent, effective July 1, 2026, following Dr. Reggie Engebritson’s June 30 retirement — as the Identified Official with Authority at the Minnesota Department of Education.
Engebritson delivered her final Superintendent’s Report at the meeting.
The board consented to PSEO contracts with Lake Superior College and Fond du Lac College, approved a memorandum of understanding with Arrowhead Head Start, approved the revised 2025-2026 budget and approved the 2026-2027 budget.
The board hired Randy Opdycke as an afternoon custodian at Northeast Range and Benjamin Johnson as assistant golf coach at the school.
