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Litchfield could be out of statutory operating debt by 2010

LITCHFIELD -- To most school boards, approving a $331,993 budget deficit for the following school year is almost like reluctantly accepting some form of punishment.

To Litchfield Public Schools, such a scenario could actually call for a celebration.

During Monday's meeting, the School Board approved a $331,993 budget deficit for the 2009-10 school year. However, if that figure holds true for the year, the district could exit statutory operating debt by 2010.

In November, the district was notified it was in statutory operating debt following an unexpected special education debt. Statutory operating debt occurs when the operating fund balance of a school district is a negative amount that exceeds 2.5 percent of operating expenditures.

The district created an exit plan, approved budget reductions worth $1.2 million and conducted a referendum that resulted in approval of an increased operating levy that hits the tax books in January.

"Because of the reductions of this year and next year, we are on the brink of getting out here at this end of this upcoming fiscal year," Superintendent Bill Wold said.

Wold said the district, however, could still be negatively impacted by the governor's unallotments, especially if they are greater that expected. According to previous Tribune reports, Gov. Tim Pawlenty proposes to give school districts just 73 percent of their state funding during the fiscal year. The remaining 27 percent will be delayed until the following year. School districts used to get 90 percent of their state funding during the year and 10 percent was delayed.

However, Wold said the fact the district is in statutory operating debt could be a blessing. He said the designation forced the district to examine what it needs to do for the next three years without increasing expenses and receiving no additional funding from the state.

In other business:

- Wold said the district sold its Construction Technology class house for $59,000. The 1,500-square-foot house cost the district about $45,000 to build. Wold said the district is "grateful" to have made a small profit, given the current economic times. That profit will be used for the district's industrial technology department and construction costs for next year's home.

- The district will discuss continuing the renovation of the high school during the School Board meeting July 13. The district began renovating the high school after approving a $12.5 million bond in 2004. That renovation has been on hold for the past two years.