Projections indicate school $800,000 'in the red' by 2012
Perham schools are financially safe--for the next 12 months.
But two years from now, they will be in the red with their financial reserves by nearly $50,000. Three years from now, at the end of the 2011-12 school year, the school district will have a negative fund balance of about $780,000.
That was the grim outlook presented by Perham-Dent School Superintendent Tamara Uselman, at the May 20 school board session.
"Murderously ugly" was Uselman's choice of words to describe the three-year budget projection.
In all likelihood, Perham will be in "statutory operating debt" by year 2011.
Enrollment is expected to decline steadily for the next three years--which means a loss of $240,000 to $307,000 a year under the per pupil school funding formulas.
Meanwhile, school officials expect to hold expenses in check. By 2012, the school's expenditures are projected at $13.1 million--$50,000 lower than the current year, despite an inflation factor of about 2.5 percent, which was figured into the calculations.
"This is why these projections are important...we need to start having these difficult discussions now," said School Board Chairman Jim Rieber. "Everybody in the school district needs to be thinking about the future outlook."
There are variables that could somewhat alter the next three years, said Uselman. The legislature and governor may come up with more school funding--but based on recent trends, that is doubtful.
Perham could see a spike in enrollment, which would produce more in per pupil revenue, but that also would be a long shot.
The other variable is whether or not Perham district voters approve an increased operating revenue levy--which could be back on the ballot as soon as fall of 2009.
Nelson donation prevented $100,000 in deeper cuts
A total of $542,000 in cuts were finalized by the board May 20.
The administration and board had pared expenses down by about $440,000, but still had about $108,000 to go to reach the general fund goal for 2009-10.
Thanks to a $100,000 donation from the Kenny Nelson family and KLN Enterprises, the school was spared even deeper cuts.
"That donation saved three teachers," said Uselman. The Nelson family had requested that the donation be applied to "teacher retention."
2009-10 school budget set--after $400,000 in cuts
Among the cuts that comprised the rest of the $400,000-plus were:
---Cutting cleaners and secretaries, for $52,000 in savings.
---Laying off two para-professionals, at a $40,000 savings.
---Fee increase to families for sports and activities, totalling $45,000 in increased revenue.
---Eliminating an elementary teaching position, $51,000.
---Not replacing a retiring math teacher, for a savings of $60,000.
---Reducing the schedule for the English as a Second Language teacher, $13,900.