Cliff Buchan
News Editor

A budget plan that is forming in ISD 831 will rely on $1.5 million in cuts and $500,000 in fund balance spend down.

The budget for the 2005-2006 fiscal year is still forming and the school board Jan. 12 had its first crack at the plan. With no new state revenues projected for the next fiscal year, the district administration is anticipating a spending cut of $2 million. If no new revenues are found for the 2006-2007 fiscal year, another $2.5 million must go from the general fund, officials said last week.

Last weekís special board meeting was the first opportunity for the administration to spell out numbers and the process that will be used to reduce expenditures for the school year that starts July 1.

ìWe need $2 million in cuts for the upcoming school year,î said Larry Martini, director of business affairs.

The draft document laid out by the administration for board review presented a plan for achieving the objective.

For the first time, the administration said it will utilize some of its undesignated fund balance to soften the cuts for the next school year. The possibility of a $500,000 fund balance draw-down would remove dollars from the current $1.9 million cushion.

Martini said the action was recommended even though district auditors have recommended establishing an undesignated fund balance of 6 percent. The current fund balance is 3 percent, Martini said.

ìWeíve done well with our fund balance,î Martini said. In a span of three years, the district has achieved a positive balance from its undesirable statutory operating debt plight.

Possible cuts

Superintendent Lynn Steenblock and Martini said the proposed plan would achieve the targeted goal with the idea of doing as little harm as possible to class size, basic student services and core education programs. Those areas remain priorities, Steenblock said.

Under the draft proposal reviewed last week, the district would reduce elementary instruction and secondary instruction by $515,000 each.

Buildings and grounds would see a $250,000 budget reduction. District support would take a $115,000 cut. Athletics and co-curricular programs would be cut by $105,000 under the preliminary proposal.

The cuts of $1.5 million would be coupled with the fund balance draw-down of $500,000 to achieve the $2 million budget modification.

Responding to questions as to how the figures were achieved for the draft, Steenblock said the goal was to be fair and equitable and protect students services as best as possible.

The Jan. 12th meeting was the boardís first work session on the budget cuts. Another work session took place Wednesday, Jan. 19 and board approval of the draft plan was expected.

Next steps

The boardís review this month is the first big step in the continuing process to achieve the budget modifications.

Under Steenblockís plan, the program budget reduction process, the district will use a budget cutting process model that will involve many staff, community members and some students.

Program managers will lead the process for each area proposed for cuts. A series of school and community meetings will take place.

Steenblock said the district will welcome public feedback and the proposals are open for modification based on new ideas.

A series of community school meetings will take place starting Feb. 1 at Forest Lake Elementary and will continue through March 10 at Century Junior High School.

The district is in process of setting a slate of community meetings at non-school sites where the budget reduction model can be explained to community organizations.

By March 15, the program based budget reduction packages will be ready for final administrative review. The school board on April 7 will be asked to approve the reductions and approve staff layoffs tied to the cuts.

With some staff members likely to be placed on unrequested leave, by law the district must take action in April, Martini said last week.

Action on the final budget for 2005-2006 will come in June.

School officials said last week should the Legislature end up this session with some form of state aid increase, the budget plan would likely require less staff cuts.

Year two

With another $2.5 million in cuts looming for the 2006-2007 fiscal year, the district is taking preliminary steps to address that possibility. That action wonít be needed if voters in the district approve a request for excess operating levy dollars.

The school board has agreed to go to the ballot box in November to shore up its revenues. Approval will mean a hit on the local property tax base.

The district continues to review a draft of a levy communications plan that will be used later this year. It had its first review by the school board Jan. 6 and will come back to the board for final approval on Feb. 3.

The plan calls for a comprehensive communication plan that will be taken to the community in an attempt to win public support for the excess operating levy. Members of the public will be asked to join district staff in the campaign.

In his financial report last week, Martini said frozen state aid for the past two years and slim prospects for any increase are giving districts little choice but to ask local taxpayers to help fill the funding void.

With employee costs commanding nearly 80 percent of the budget, when cuts are needed they will fall to staff, Martini said.

A major reason for the stateís budget deficit was the decision by the state to absorb all basic costs for education without any new revenue sources, he said.

ìItís the real reason the state has had deficits the past three years,î Martini said.

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