The Osseo School District’s largest fund is expected to decrease nearly $2 million during the 2013-14 school year, despite an increase in revenue and decrease in planned spending. The projections are based on the budget the school board unanimously adopted at its June 18 meeting.
Because of the gap between revenue and expenses, the district projects it may need to make $8.1 million in budget cuts for the 2014-15 and 2015-16 school years, if it does not receive new revenue from the state or a local operating levy. There is a levy on the ballot this fall.
The school board has directed administrators to review the possible cuts identified earlier this year and prioritize the items in case cuts are needed.
According to a presentation by Business Services Director Kelly Benusa, net revenue for the general/transportation fund will increase by about $2.8 million in the next year. Nearly $2 million of that will come from an increase in general education aid from the state legislature, but special education revenue is projected to decrease about $700,000.
Benusa also said planned spending from the general fund will decrease by about $9.6 million.
That decrease is largely because the board used two tactics to reduced planned expenses for next school year. The board approved nearly $3.1 million in budget cuts March 5. In addition, it chose to use cost-containment measures that allow it to budget for an inflation increase of only 3.25 percent instead of the 3.75 percent it had been planning.
Here’s where the decreases will occur.
• General fund salary expenses are expected to decrease nearly $8 million. About $2.1 million of that savings will come from board-approved budget cuts.
• Employee benefit expenses will decrease about $500,000 overall, factoring in a $1.6 million penalty likely to be imposed by HealthPartners, which administers the district’s health plan. “HealthPartners is allowed by law to impose the penalty because five district employee groups voted to move from the district-administered plan to a nondistrict-administered plan,” Benusa said.
• Purchased services are expected to decrease by about $800,000.
• The cost of other services is expected to decrease about $400,000.
Overall, expenses in the 2013-14 general fund budget are 1.42 percent below the budgeted expenses for 2012-13.
Here’s what the 2013-14 budget projects for the districts four smaller funds:
• The food service fund will have planned spend down of its fund balance from about $2.7 dollars to $2 million.
• The community service fund will go from about $1.9 million to $1.1 million.
• The capital/land proceeds fund will go from about $5.9 million to $6.7 million.
• The debt service fund will stay flat at about $4 million.