With $2.6 million in needed budget cuts looming over their heads, Mehlville School District Budget Development Committee members are busy hashing through the district’s expenditure and revenue estimates for fiscal 2005.

After two meetings set aside specifically for budget background and a review of the district’s and state’s financial situations, the administratively selected committee — comprised of administrators, teachers, parents and members of the public — finally has reached the meat of its task.

Charged with recommending a budget for the 2004-2005 school year, Assistant Superintendent of Finance Randy Charles, who also serves as the district’s chief financial officer and committee facilitator, plans to bring a budget recommendation to the Board of Education during its May 11 meeting. To reach a recommendation, according to Charles, the committee will need to scour anticipated revenue and expenditures for the coming year.

During a meeting Monday night — after the Call went to press — committee members were scheduled to establish the district’s revenue projections for fiscal 2005.

The committee also is planning to address expenditure allocations at 6 p.m. Monday, April 19, and Monday, April 26, in the boardroom of the Administration Building, 3120 Lemay Ferry Road.

Charles and Brent Bell, the district’s director of accounting, planned on presenting revenue projections April 12 to committee members as base numbers or starting points for the committee to evaluate based on administrative estimates.

On Monday, the advisory panel was scheduled, line item by line item, to establish how much the district could receive next year from current and delinquent taxes, earnings on investments, fines, state assessed utilities, transportation and other state and local revenue sources, including funds generated by the district’s voluntary transfer program in affiliation with the Voluntary Interdistrict Choice Corp.

During a committee meeting March 29, Charles advised members that for budgeting purposes, “it would be wise” to assume a loss of 50 students when determining how much revenue the district will receive from the VICC program.

“If anybody disagrees with that — thinks that that’s too conservative or not conservative enough — those are the types of discussions that we’ll want to have,” Charles said.

He also told committee members an important revenue projection they will need to consider will be the money the district receives from the state through Proposition C.

The state mandates that half of Proposition C sales-tax funds be used to roll back the current tax levy. However, Mehlville voters eliminated the sales-tax rollback in 1998 when they approved a Proposition C rollback waiver — then estimated to generate an additional $3.3 million in revenue each year for the district.

Charles told committee members in March that the state already has projected, based on Proposition C estimates, that it will be able to give Mehlville $802.73 per eligible pupil for the 2004-2005 school year. Current estimates show that Mehlville’s eligible pupils total 9,537.64 — resulting in a potential $7,656,149.76 in state funds for the school district in fiscal 2005.

However, Charles warned that the district has been burned by the Proposition C projection before and urged committee members to be cautious of that number. As a result of a struggling state economy, Charles told the Call, the district received less Proposition C sales-tax revenue than anticipated this year.

“We rely very heavily on numbers we get from the state,” Charles said. “… Based upon our history from last year … we’ll probably want to be a little more conservative with that figure. This particular number burned us a little bit last year by $100,000 to $200,000. Because the number they gave us this time of year (last year) didn’t pan out in the fall. And the position we’re in right now, we can’t afford to overestimate revenue in any place. So, this is one thing — I’m showing you the $802 figure, but we’ll probably suggest the committee see a number that’s a little more conservative.”

Foundation formula revenue also was up for consideration Monday night — a difficult task, Charles said, since the outcome of a current lawsuit challenging the state’s formula still uncertain.

State funds to hold-harmless districts, such as Mehlville, have been frozen at the same level since 1993. The majority of hold-harmless districts’ funding, under the current formula, comes from local property tax revenue, while districts on the formula typically receive more in state aid.

The Committee for Educational Equality, which represents primarily districts on the formula, filed its suit against the state of Missouri Jan. 6, challenging the state’s method for funding public schools and asking that the method be declared unconstitutional because it does not distribute funds equally or adequately.

About 18 districts in the St. Louis area, including Lindbergh and Mehlville, are involved with the Coalition to Fund Excellent Schools, which supports the current lawsuit, but disagrees with some changes the Committee for Educational Equality is pushing.

The Coalition to Fund Excellent Schools, of which Mehlville is the fiscal agent, is participating in the suit as a third party, or an intervener, to represent the views of held-harmless schools.

“In the short term, I don’t think there’s going to be much happening,” Charles told committee members, noting funding levels still will be frozen at the 1993 level for the 2004-2005 year. “We know how much we get per kid. We can pretty much estimate how many kids we’re going to have … It’s beyond next year that’s really up in the air. We don’t know what’s going to happen with this lawsuit … We don’t know what effect that will have on the formula … what the formula might look like — just state funding in general.”

There are many revenue sources for the district, but there are “four that you need to work really, really hard to get as right as you possibly can,” Charles told committee members.

He noted revenue from current taxes, Proposition C, the foundation formula and other local revenue, including VICC funds —  $73,934,406 — has generated 80.8 percent of fiscal 2004’s anticipated revenue of $91,459,721, according to district figures.

“So, you can see why it’s so important for us to spend a good amount of time estimating those revenue sources,” Charles said.