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Litchfield Schools approves cuts of $894K for 2009-10, 2010-11 in effort to get out of statutory operating debt

LITCHFIELD -- Litchfield Public Schools will seek approval from the commissioner of the state Department of Education after the School Board authorized the district's plan for exiting statutory operating debt.

Superintendent Bill Wold said Tuesday the School Board unanimously approved the district's exit plan Monday, while also approving $894,000 in budget reductions for the 2009-10 and 2010-11 school years.

The district last month proposed $378,000 in cuts for 2009-10 and $518,000 for 2010-11.

A majority of the two-year reductions -- $289,000 for 2009-10 and $388,000 for 2010-11 -- will affect personnel and transportation.

Overall, the district's three-year plan for exiting statutory operating debt includes over $1.2 million in budget reductions.

The district will submit the recovery plan -- organized into a 14-page report describing the district's recent financial and enrollment history -- to the Minnesota Department of Education by the end of this month.

"It kind of tells the story of certainly the past year, if not more," Wold said about the district's report.

By statute, the department requires any school district in statutory operating debt to submit a specialized operating plan by Jan. 31.

Wold said he expects the state education commissioner to approve the recovery plan since the district has worked closely with a representative of the Department of Education over the last month while creating it. Wold said the plan received preliminary approval from state because of the cooperative effort.

In the report, the district illustrated Litchfield's special education woes from the past five years. Wold said in early December that an unexpected special education debt of $300,000 pushed the district into statutory operating debt after a proposed levy failed.

Also, the amount of district special education costs not refunded by the state or federal governments increased from $966,531 in 2003-04 to $1,277,550 in 2006-07. In 2006-07, the district financed $2,476,550 in special education with state and federal assistance.

According to Wold's $13.8 million estimate for the 2007-08 general fund, non-refunded special education costs made up about 9 percent -- $1,255,333.32 -- of the district's budget for the past school year.

"That's a key point," Wold said. "If that doesn't happen, if we don't have that piece, then we like a lot of other districts would be fine."

Following state approval of the plan, Wold said the district can start thinking about when to seek a vote for a new operating levy. He said a referendum may be proposed in late May.

"I would expect that the next conversation is going to be about the next referendum," Wold said. "That's going to be coming up shortly."

If a referendum for a new operating levy is passed before 2010, the district won't have to enact the budget reductions for the 2010-11 school year.