Bemidji School Board: Hiring freeze, reduced budget set
The Bemidji School District administration will implement a hiring freeze immediately.
It will also reduce this year's remaining supply and equipment budgets for school buildings.
Without budget adjustments, the district could face a negative fund balance in the general fund starting in 2010-11, Chris Leinen, director of business services, said Thursday night.
At a special meeting, Leinen presented his five-year budget projection for the district's general fund to the Bemidji School Board. The projection is based on three major assumptions: no staffing changes, a 1- percent increase in inflation and no increase in the state education funding formula.
Without budget adjustments, Leinen estimated the district's general fund could reach a negative fund balance of $2.35 million in 2010-11 and keep growing to reach a negative fund balance of $8.28 million in 2013-14. As a result, he said, the district could be in Statutory Operating Debt in 2010-11 and continue in it for the following three years of his five-year budget projection.
In 2007-08, the fund balance was $3.03 million. Leinen projects the fund balance will be $2.09 million this year and slightly more than $9,000 in 2009-10.
Superintendent Jim Hess said the district will have to look for ways to conserve. With 80 percent of the general fund budget dedicated to personnel, that area cannot be overlooked, he added.
If not for the district's operating levy referendum, which voters renewed for another five years last fall, the district would be in "dire straits," said Ann Long Voelkner, board chairwoman.
Besides implementing a hiring freeze, the district's administration will reduce school buildings' supply and equipment budgets this year by roughly $120,000 of a total budget of about $500,000.
The board will continue to look at budget adjustment possibilities.
"We have to get started on this now," said John Pugleasa, board member.
Also, Long Voelkner said the board will have to re-evaluate the district's general fund balance policy. The policy calls for an unreserved fund balance for the general fund of approximately 8-10 percent of the fiscal year budget.
Meanwhile, Leinen projects that revenue this year will increase by $478,263 in the general fund due to the 1-percent state education funding formula increase and one-time revenue.
Leinen also projects that expenditures will decrease this year from the previous year. He noted that the district no longer has construction expenses for its new maintenance facility and staff reductions will take effect this year.