Posted: 5/7/03

ISD 831 will trim expenses

Cliff Buchan
News Editor

In an effort to keep expenditures in line with revenues, ISD 831 has taken action to trim expenses in the 2003-2004 school year. And it could be the first of two major budget actions in this two-year funding cycle.

Mondayís action reduced expenditures by $805,000 and came on a 7-0 vote with an administrative recommendation. The move will spare direct reductions to the classroom.

It was a decision forced by lawmakers in St. Paul where there is little hope for increased funding in form of state aid, said Larry Martini, director of business affairs for the district.

ìThe revenue is not increasing,î Martini told the board. ìWe are going to have to make adjustments.î

The decision to reduce expenditures for the next fiscal year comes as the state searches for ways to erase its projected $4.2 billion budget shortfall over the next two years. Martini said there is little hope that the state will increase funding to K-12 schools.

And the problem will compound itself two years out, said Lynn Steenblock, superintendent of schools.

Martini and Steenblock said more cuts will likely be necessary a year from now. In the second year of the new biennium, ISD 831 will likely face cutting some $1.7 million from the 2004-2005 budget.

Martini said while the state is not increasing its funding to schools, schools are being hit with inflationary cost increases and growing salary and benefit costs for employees that command roughly 80 percent of the districtís $58 million budget.

As an example, Martini said the district would face inflationary increases of more than $1 million a year on its $58 million budget if the rate of inflation was 2 percent a year.

The expenditure reductions also come at a time the district is emerging from statutory operating debt status.

That progress will slow as a result of Mondayís decision, but Martini said the district may escape from the SODís $1.2 million threshold as early as next year although the district would still be in red ink.

Dollars saved

Hereís where the district plans to save money during the fiscal year starting July 1:

ïReduce bus purchases, $280,000.

ïReduce Xerox lease, $35,000.

ïReduce Title I carryover, $70,000.

ïNew hires (dollar savings from the cost of retirees to new hires who are lower paid), $100,000.

ïReduce parking lot improvement funds, $100,000.

ïReduce statutory operating debt paydown, $100,000.

ïShift pool expenses to fund 2004-2005.

A special education transportation revenue increase of $100,000 is added to the $705,000 in expenditure reductions for a total budget modification of $805,000.

Board member Karen Morehead thanked the administration for taking steps that will avoid cuts to classroom needs. With voters in the district supporting an excess operating levy in 2001, Morehead said the school has won the faith of the public.

But Steenblock cautioned that more difficult decisions could be looming a year from now when a larger budget cut may be needed. ìWeíre putting everything up front,î Steenblock said.

Budget amendment

In a second budget matter on Monday, the board voted 7-0 to approve an amendment for the 2002-2003 budget. The amendment pertains to the renovation of the District Office Building that is now taking place. The action was recommended by the boardís finance committee.

Because work on the office will be completed in this fiscal year, general fund expenditures will increase by $650,000. The amendment will temporarily decrease the projected fund balance in the general fund.

It will only be short-term. Health and safety levy funding will cover most of the cost of the mold abatement project and those dollars will be paid in during the fiscal year that starts on July 1, 2003.

The district office work is slated to be completed by mid-June. The Central Learning Center is the temporary office home for the central office staff and administration.

Top of Page