WILLMAR -- The Willmar School Board has approved a $41 million operating budget for the 2009-10 school year.
The board voted unanimously Monday to approve the budget. It reflects $2.7 million in budget cuts the board approved in the spring, including staff cuts and fee increases.
The budget also reflects changes in revenue sources. A bit less money is coming from state government. More is coming from local taxpayers, thanks to an operating levy they approved last fall.
The federal government will provide economic stimulus funding.
The stimulus money will help the district offer some new programs for struggling students, but it comes with piles of paperwork. Business and Finance Director Pam Harrington explained the changes in funding for the coming school year.
The Legislature kept basic school funding at the same level as this year, except for some state aid payments that have been discontinued. Willmar will lose nearly $490,000 in state aid for general education and for technology.
The district will gain about $134,000 in state endowment money no longer deducted from other aid and $295,000 to be used for operations rather than staff training.
Harrington went over the budgets for food service, community education and debt service -- all budgets that are accounted separately from the general fund, which pays for the district's day-to-day operations.
The district projects $40.95 million in revenue and $41.15 million in expenditures in the general fund next year.
Harrington said she was satisfied with the budget, which shows a $200,000 deficit.
That is close to breaking even and shows less deficit spending than in recent years, she said. The district has an undesignated fund balance of about $2.3 million.
School districts are required to adopt budgets before the fiscal year begins on July 1. However, some information about revenue and expenditures is not available yet. The budget is usually revised about halfway through the year to reflect information received after the fiscal year starts.
Some changes are expected.
The district has closed schools and reorganized the buildings that remain open. Savings in utilities and transportation are still to be determined and will be factored into future revisions.
Much of the stimulus funding has not been added to the budget yet, Harrington said, because not all the details are available.
Cash flow could be an issue in the coming years, as Gov. Tim Pawlenty has ordered a change in the timing of state aid payments, she said.
School districts used to get 90 percent of their state aid during the fiscal year, with 10 percent delayed until the following year. Now, they will get 73 percent of their aid during the fiscal year, and 23 percent will be delayed.
The main impact will be on cash flow, Harrington said. The district still needs to pay its bills regularly, even though its state aid is coming on a different schedule.
Harrington said her office has been keeping more of the district's funds liquid than it would ordinarily, to be ready to make payments while waiting for state aid.
Federal economic stimulus money could have an impact on education funding in the coming years.
Minnesota received $500 million in stimulus funding for education. The state took $500 million in state funds out of the education budget and filled the gap with stimulus money. Other states have done the same.
In Willmar's case, about $2.5 million will be coming from stimulus funding. Since the money is intended to save or create jobs, the district must identify jobs that were saved because of the funding and have those employees fill out periodic reports.
The district won't receive the funding until it has proven that it paid those employees, "another cash flow issue," Harrington said.
Board member Wayne Lenzmeier said the schools would be "subsidizing the state" through the delayed payments.
The state would not be able to delay the federal funding once the proper reports were filed, Harrington said.
"What we're concerned about is what happens two years from now," she said. "Are we going to see drastic cuts in education?"
Over the next two years, the district will receive other funding from the stimulus, all designated for specific programs. The stimulus funding will include $450,000 for Title I reading and math instruction; $127,000 for a different Title I program addressing the needs of neglected or delinquent kids; $1 million for special education; $74,000 for kitchen equipment upgrades; $5,000 for an environmental action project; and $13,500 for a greenhouse grant.