Faced with declining enrollment and uncertainty surrounding state and federal funding, the De Soto School District continues to search for ways to trim expenses, Superintendent Ron Farrow said.
The De Soto Board of Education voted unanimously to approve a budget on May 21 for the 2026-2027 fiscal year that begins on July 1. The fiscal year ends on June 30, 2027.
The district is projected to bring in $35,986,254 in revenues while spending $48,560,301.
More than 49 percent of the district’s total revenue comes from local revenue and another 39 percent comes from state revenue. More than $11 million of the expendures is for bond issue projects voters approved in April 2024.
Farrow said the district’s declining enrollment can be attributed to the De Soto area becoming an age-in-place community.
“People are not leaving once they have families, so a lot of our homes are taken up by families that no longer have (children),” he said.
Farrow said he spoke with De Soto City Manager Todd Melkus last month about upcoming new housing developments that could bring new families to the district.
“We have dropped quite a few students over the last 10 years,” he said. “We did see a slight decrease in the pace of that decline about two years ago, but it’s kind of going back the other direction. We’ve lost over 100 students just this year. I hope that will rebound up.”
According to district documents, De Soto had an average daily attendance of 2,651 in fiscal year 2015. The projected average daily attendance for fiscal year 2027 is 1,920.
Farrow said the enrollment declines require the district to remain proactive in staffing, operational planning and long-term financial sustainability efforts.
He said salaries and benefits make up approximately 76 percent of the operating budget.
In the upcoming fiscal year, the district will spend $18,859,625 on salaries, a reduction of $1,394,943 from the 2026 fiscal year, Farrow said.
“The salary savings reflected in the budget are the result of ongoing right-sizing efforts to better align staffing with enrollment trends and long-term financial realities, while maintaining a strong focus on protecting student services and supports,” Farrow told the Leader on May 28. “Over the last several years, De Soto has experienced a significant decline in student enrollment.
“As enrollment decreases, the district must responsibly align staffing and operational structures to ensure we remain fiscally sustainable while continuing to provide strong educational opportunities for students.”
He said the district does not want to make broad reductions to student programming or dramatically increase class sizes.
“Over the past two years, staffing adjustments have primarily occurred through attrition when employees retire or resign, allowing the district to thoughtfully right-size without broad disruptions,” he said. “Throughout this process, we have continued to monitor and maintain class sizes within (Department of Elementary and Secondary Education) desirable and standard guidelines.”
Farrow said the district also made organizational adjustments.
“Over the last two years, this has included the reduction of two administrative positions,” he said. “Specifically, the district reduced a dean position at Vineland Elementary and also reduced an administrative position that previously oversaw the Annex (for students with special needs).
“Following program changes and alignment, the Annex and (Innovative Learning Center) are now overseen under a single administrator, creating greater operational efficiency while maintaining student supports and services.”
Farrow said some savings are connected to the district’s transition this coming year to a primary and intermediate school model for elementary students.
“(This) created opportunities to better align staffing with enrollment and operational needs,” he said. “However, the primary focus throughout this process has been ensuring resources remain directed toward student learning and support, while responsibly managing declining enrollment, rising costs, and reductions in both state and local funding pressures.
Reserves
The budget projects the district will bring in an estimated $32,460,115 in operating revenue and spend $33,518,625 in operating funds, resulting in a $1,058,510 deficit.
The district will cover the deficit with reserve funds, leaving an estimated $10,368,358 (or $8,990,631 in unrestricted funds), which is about 26.82 percent of the district’s operating budget, by the end of the fiscal year.
Farrow said the district’s policy is to keep reserves above 15 to 20 percent.
“We were at 47 percent when I started in 2024,” he said. “We have dropped precipitously. We were very lucky that we have that 47 percent to buffer this storm over the last two years.
“If you remember, last year we were projecting at the end of fiscal year ’27 that we’d be at around 15 percent, which by policy is the threshold. And after 15 percent, we would need to put a plan in place for a two-year improvement. The fact that we are not projecting fiscal year ’27 at 26.82 percent shows the work that’s been done not only to get us to a balanced budget but to protect our reserves.”
Farrow told the school board he was proud of the progress the district has made in the budget process.
“Although deficit spending is still projected, the district made tremendous progress in reducing expenditures and stabilizing operations,” he said. “Compared to (2026) projections, the district reduced projected operating expenditures by approximately $2,284,753 through careful operational review, staffing efficiencies and budget refinements while continuing to preserve student programming and services. At the same time, projected operating revenues are expected to decrease by approximately $920,658 due largely to continued underfunding of the state foundation formula and ongoing enrollment declines.
“If the state of Missouri were fully funding the foundation formula at the expected adequacy target level, the district would have been positioned extremely close or essentially at a balanced operating budget for (2027). Up to four to five weeks ago, we really were at a balanced budget, which is phenomenal work. If you remember, six months ago I talked in a board meeting that my goal was to reduce a million dollars in our budget. We’ve reduced over $2.2 million in our budget without really harming student services and student programs – something we’ve been very careful to protect.”
He said a few weeks ago, the state decided to underfund the foundation formula
“When you even everything out, that is where our million dollar deficit comes from,” he said.
He said the district has been able to slow the decline of reserve balances, providing additional time to weather ongoing funding uncertainty and reduce expenditures responsibly.
He said the district still has some work to do over the next year to reduce another $1 million for a balanced budget. Eventually, he wants the district to come out ahead.
“There’s work to be done, but (I’m) very proud of where we are,” he said.
Farrow said the district will continue its commitment to staff compensation and retention.
The budget includes continued movement on salary schedules; refinements to the certified salary schedule and a $500 increase to the certified base salary through paid-time-off restructuring; improvements to classified salary schedules; and salary increases for transportation staff.
The budget includes $12,323,197 in capital projects with $11.5 million from the Prop 4 Dragons bond issue approved by voters in April 2024.
Those projects primarily are HVAC and roofing projects to be finished this year. Non-bond issue projects include improvements to buildings and grounds and technology upgrades.