NEW ULM - As the District 88 School Board begins preliminary consideration of next year's budget this month, administrators are sharing projections with the board.
To start with, the district's unreserved fund balance - money that can be spent at the board's discretion - is anticipated to decrease by some $423,000 at the end of the current school year, to approximately $2 million.
This decrease is a result of last year's decision to partly fund operations out of the fund balance.
This number still meets a local goal of maintaining the unreserved fund balance at $600 to $650 per pupil unit - or, currently, between $1.4 million and $1.5 million.
Administrators have built a handful of known facts into their assumptions and projections for next year.
On the plus side, they are anticipating an increase in enrollment - of about 20 students.
Conversely, they are expecting a decrease in referendum-generated revenue; a $387,00 increase in spending as a result of new contracts with teachers and custodians; and a 1 percent contractual increase in transportation costs.
If nothing else changes - which is unlikely - and if basic state aid, which is dictated by a state formula, remains at the same per-pupil level as this year - then the fund balance next year would drop to $1.39 million. That's just under the district-set fund-balance goal.
A 2 percent decrease in state formula aid, however, would further impact the fund balance, bringing it, roughly, down to $1.1 million. A 4 percent dip in state formula money would reduce the fund balance to about $904,000. That is much lower than the district goal.
These numbers are hypothetical, intended to give the board something to work with when considering options, says Superintendent Harold Remme.
Administrators have also prepared worksheets that show what magnitude of cuts in various areas - salaries, utilities, equipment, supplies, textbooks - would, under the various state formula scenarios, result in a balanced, rather than a deficit, budget.
In just one example, if state aid remains the same per pupil, and if proportionate cuts are made across various budget categories, then the category of salaries, wages and benefits would need to decrease by $500,000 to adopt a balanced budget.
All final budget decisions rest with the school board.
After considering the preliminary information, the board is expected to set an overall expenditure goal at its meeting on Jan. 28. It is expected to discuss resulting staffing alternatives in February; and potentially hear administrative recommendations for cuts, and make a decision on those, during two meetings in March.