The St. Ignace Area Schools general fund will face $279,389 in cuts and a $285,363 deficit for the 2009-2010 school year, based on the budget approved by the school board at its meeting Monday, June 9. The cuts and shortfall come from an expected drop in enrollment and cuts in state aid, estimated to be down $588,326.

The state foundation allowance is based on the number of students in the district, which the district estimates will be 640 in September, down from 678 students last fall.

The district won't likely know until September or October exactly what the funding levels will be, said Superintendent Mike Springsteen.

"It could be a worse situation than what we think," he said. "The net effect is, it's a pretty significant change."

About 50% of the shortfall is being made up by cutting personnel expenses, 20% from cutting supplies and materials, and the remaining 30% will be covered by drawing from the district's savings account, or fund balance.

Two retiring teachers, Karen Sanborn and Tom Hamel, will not be replaced, and some teachers will be reassigned and may see an increased workload, said Mr. Springsteen. High school vocational training will also be reduced so instructional staff there can fill in the gaps.

Savings here will be $146,483.

"We're scaling back the vocational program significantly," Mr. Springsteen said.

Busing service for the district will see one less bus run next year, resulting in a $55,660 savings. This could mean more consolidated routes or a smaller service area next year.A

$60,749 cut to instructional staff will come mostly from technology expenditures, like the district's drive to have a 1-to-1 computer to-student ratio. A decrease in pupil support services will save $5,889, but will mean a reduction in materials and summer staff at the schools.

Special education and reading programs will get an additional $24,220 in federal aid next year, said business manager Kathy McLeod, if Title I of the Elementary and Secondary Education Act of 1965 and the American Recovery and Reinvestment Act of 2009 come through with the additional funding, as expected.

High school, middle school, and elementary office budgets will receive a $21,415 increase, partly owing to contract obligations. Some of these budgeted funds may be reduced because High School Principal Don Gustafson writes grants for the schools, which can help defer the cost of his salary.

The district will save $12,356 in supplies and reduced summer hours in her office, said Ms. McLeod.

But the district expects to spend $11,057 more for operation, maintenance, and utilities next year.

The tribal juvenile detention center in St. Ignace will receive $4,576 less school funding, though a grant the facility received will help mitigate that loss. The school district's contribution will be reduced from $5,076 to $500.

Mr. Springsteen said the district would be "judicious" with its fund balances for the next two or three years to soften the blow of the decreased revenues.

"It's going to be tough sledding, but we're going to get through this," he said. "The one thing I know is public education isn't going away."

With a limited amount of funds in the reserve balances, Mr. Springsteen said even tougher decisions may need to be made a few years from now.

A budget surplus this year contributed $23,574 to the $611,190 fund balance, but the district will take $285,363 from the fund balance next year to cover the budget deficit.

"Year three is the question mark," Mr. Springsteen said. "Hopefully the state's economy will start turning up a bit by then."

Athletic, Lunch Funds

To Operate in Red

The lunch and athletic budgets will also tap into their own reserves, thereby saving the district from having to spend $48,870 from its general fund to support those programs. The expected food service budget deficit of $27,259 will be covered from a $45,828 reserve account, while an anticipated $72,000 deficit in the athletic budget will be covered from its own reserve account, which has $96,172 in it.

The food service budget owes its deficit next year to an expected $12,982 decrease in revenues, owing to fewer sales and lower state and federal funding, and a $15,136 increase in expenses from rising employee benefits. Lower state and federal funding levels are based on the number of students served by the cafeteria.

The athletic deficit is caused by an expected $71,700 decrease in revenues and a $2,700 increase in expenses. Athletic revenues are down because it will get $50,000 less from the general fund and an expected drop in ticket sales. Expenses will rise to meet employee salary and benefit obligations.

The anticipated budget revenues for athletics may be supplemented by the possibility of hosting playoff games and other special events at St. Ignace, said Mr. Springsteen.

A $600,000 cash flow loan to be received in August will be obtained from the Michigan Municipal Bond Authority to help fund payroll early in the next school year. This loan has an estimated 5% interest rate and is budgeted to be paid back over seven months, beginning in January.