District 88

mulls next

year's

budget

By KREMENA TODOROVA

Journal Staff Writer

NEW ULM -- District 88 is projecting a deficit of about $684,215 for next fiscal year, according to a preliminary budget report drawn up by Business Manager Donna Luhring.

Currently, the district has a budget surplus of $474,891.

Next year's expenditures are projected at about $22.2 million, and revenues at about $21.5 million, says Luhring. She points out that all numbers are subject to fine-tuning and change.

Next year's revenues are expected to dip by a combined $673,268 from the current year's $22.2 million, says Luhring, whose report offers a variety of ways to look at expected budget developments.

Compared to the current $21.7 million in budgeted expenditures, next year's expenditures would increase by a total $485,838.

A budget needs to be adopted by July 1, the beginning of the school fiscal year. Since state appropriations and budgetary factors are not finalized, however, the Board of Education, as is often the case, probably will adjust the budget in the fall. Another set of adjustments are usually approved the following February or March, when numbers such as special education funding become finalized.

The Board of Education will be looking at the preliminary budget June 26.

A deficit budget at the beginning of a fiscal year is not unusual for school districts, Luhring says. Districts maintain reserves to cover a deficit. District 88 has about $3 million in reserves, of which about $2 million are unrestricted (the remaining about $1 million can only be spent in special ways).

The projected deficit is largely due to the need to complete an unusual amount of mold removal and cleanup work this summer, Luhring also notes. The 2004 budget is based on the assumption that two-thirds of the mold removal and cleanup projects under way now, will be paid for during the next fiscal year. If not for the health concerns related to the discovery of mold at school sites, the district would probably have waited until levying for the funds before doing the work, said Luhring.

The money put up front for mold removal will be recovered through a health and safety levy -- and possibly as a result of litigation against contractors just launched by the district.

The current budget numbers are based on several other assumptions as well, Luhring explains. One is that current enrollment trends will persist. Another is the expectation of an increase in funds for some federally-mandated programs.

The budget also reflects the district's best understanding of this year's changes in state legislation, Luhring says. Because of staff cuts at the state Education Department, a lot of legislative changes have not yet been fully explained to districts, she says.

The expenditures are based on staffing information provided by the curriculum department. The preliminary numbers reflect seniority increases to qualified employees -- but do not include salary or benefit increases that might result from negotiation. The district is in negotiations with all employee groups. The outcome of these talks may be clear in time for the fall budget adjustments, Luhring hopes.

The expenditures include 1 percent set aside for staff development.

The 2004 budgeted spending breaks down as follows (all numbers are rounded and listed in descending order, rather than by accounting fund): $4.5 million for districtwide expenses; $4.4 million for the Senior High; $3.3 million for Jefferson Elementary; $2.7 million for Washington Elementary; $2.2 million for the Middle School; $1.9 million for secondary services (which include things such as athletic and art activities); $850,000 for elementary services shared among school buildings; $850,000 for debt service; 680,000 for community education, including services to non-public schools; $600,000 for food service; $48,000 for the project house built and sold by students; $46,000 for summer school; $45,000 for the juvenile detention center; and $14,000 in trust payments.