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Litchfield school audit details path to get out of debt

LITCHFIELD -- A financial audit shows the Litchfield School District is on the right path for getting out of statutory operating debt.

It was around Thanksgiving Day a year ago that the district was placed into statutory operating debt, which means its unreserved fund balance is a negative amount that exceeds 2.5 percent of expenditu-res. The district is red-ucing ex-penses and increasing revenues in order to leave statutory operating debt.

The audit presented to the school board this week shows that the district "stopped the bleeding," Superintendent Bill Wold said. A plan was developed last year to get the district out of debt in three years.

The first year the district "made some cuts on the fly," Wold said. Because it was midway through the school year, it was impossible to lay off teachers, but the district cut staff development, eliminated the activity bus and removed field trips from the general fund.

This year $370,000 was cut from the budget by eliminating four teachers, reducing bus routes and supply budgets, delaying the curriculum review cycle and increasing activity fees.

Another set of reductions would have been implemented if voters had not approved an excess levy in May.

The seven-year levy will generate $660,000 each year. Revenue from that levy won't arrive in the district, however, until the 2010-11 school year.

Wold said getting out of statutory operating debt "will be close" next school year and "for sure" the following year.

The financial information that was presented to the board during the audit report Monday was not new to the board members, who had worked closely with the debt plan. But Wold said it confirmed the district is doing what needs to be done to get out of debt.

The district's progress is also filed with the Minnesota Department of Education, Wold said. "They also have another set of eyes on the plan."

Carolyn Lange

A reporter for more than 30 years, Carolyn Lange covers regional news with the West Central Tribune.

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