While the Lindbergh Board of Education has budgeted nearly $2.3 million more in expenditures than revenue for the 2007-2008 school year, Assistant Superintendent for Finance Pat Lanane is optimistic that the district might break even and not have to use as much reserves.

Describing projected revenues and expenditures as a “worst-case scenario” for the coming school year, Lanane said he is confident that the district will come closer to breaking even with its budget, possibly as close as 2 percent.

“Of course, our June budget is really our worst-case scenario,” he said. “I really think our revenue may be a little better than I’ve predicted it because, even since we did the budget, I’ve had the numbers come in on the commercial reassessment side, and it looks like they may be a little better … And we never spend a hundred percent of our expenditures. So it’s the same thing as this last year. The deficit continues to decline as the year goes on.”

On June 12, the Board of Education unanimously approved an operating budget for the 2007-2008 school year with $55,462,885 in revenue and $57,741,919 in expenditures — a projected deficit of $2,279,034. That budget is in accordance with a planned spend-down of district reserves.

Based on an anticipated operating-fund balance of $24.9 million on June 30, 2007, an operating-fund balance of roughly $22.4 million is anticipated at the end of the 2007-2008 school year on June 30, 2008. But the majority of that fund balance already is committed.

Those commitments include pass-through club and activity funds, funds for legal obligations, funds for future land purchases, funds for emergencies and cash-flow funds to avoid borrowing.

Because of these commitments, of the $24.9 million operating-fund balance projected on June 30, 2007, just $2.5 million is unrestricted. Additionally, the district’s debt-service fund is projected to operate at a surplus of $178,680.

For the 2006-2007 school year, the board voted last June to adopt an operating budget that projected total expenditures of $47,666,054 with anticipated revenue of $44,325,296 — a deficit of $3,340,758.

While he said last week that the district’s deficit in its 2006-2007 budget, which runs through June 30, is roughly $1.5 million, Lanane anticipates that the deficit will shrink further in the coming days.

“Even though we’re showing this deficit here, it’s possible that we will be close to breaking even,” Lanane said. “It’s not outside the realm. I really don’t think we’ll quite make it. But I think that even the ’07-’08 (budget), I think it’s possible that by the time all those adjustments are made, it’s going to be close to even. I think we may be within 2 percent probably.”

A large part of the 2007-2008 budgeted revenue of more than $11 million above 2006-2007 comes from revenue increases available due to this year’s property reassessment. Most of the expenditures for the next school year come from a negotiated average salary and benefits increase of 4.25 percent. Lanane estimates that cost of that salary jump — slightly more than $2 million — accounts for roughly two-thirds of the district’s increased expenditures for 2007-2008.

Lanane said the rest of the expenditure increases can be attributed to mainly three areas — new capital projects, technology and new No Child Left Behind requirements in the mathematics section of Missouri Assessment Program testing.

To cover those costs, the Board of Education approved spending $881,590 of district reserves for capital improvements at Lindbergh High School’s Gym 2 and the district auditorium.

“We looked at what do we have that we need to keep,” Lanane said. “Because we have certain cash-flow needs, we have certain emergency needs, we have certain legal requirements, we have certain student funds that we have to have.

“But beyond that, there’s a certain amount of money in that balance that we need to look at to use for the good of the district and the students. And they had approved $881,000 for capital projects for Gym 2 … replace the bleachers, replace the wood floor and we have to paint the ceiling, but there’s lead paint we have to remove … And the auditorium, we have to get new curtains, install new carpet, some handrails and some lighting.”

Besides using reserves for those improvements, technology increases in 2007-2008 are more than $250,000 above the 2006-2007 budget. Technology and technology-support items approved in April by the school board totaled $489,500 — on top of the technology budget of roughly $900,000 for the coming school year.

“That was a chunk,” Lanane said. “And that’s been one through the years when I’ve been talking about budget that really I’m concerned about. It’s one of those you know you have to do. But I guess any organization would go back and look at their technology budget over the last 15 years and it started out being very, very small and it continues to become a larger piece of the pie. So, any time that happens, I worry about that just a little bit.”

And new mathematics requirements for the federal No Child Left Behind Act will cost an additional $200,000. Lanane said roughly half of that cost will come from adding the equivalent of 2.5 developmental math teachers to keep up with new requirements.

Despite these projected cost increases, Lanane is confident that because the district does not normally allow the transfer of funds, his “conservative” budget for 2007-2008 can come near to breaking even.

“They’re probably overly conservative revenue projections just to be safe,” Lanane said. “We know that the financial picture will only get better as the year goes on. But that’s been the way I’ve done it for 14 years. Maybe other people take another approach. But this, I think, has served us well …

“It’s just so hard right now to talk about a year from today. But I do think revenues will be a little better and I know expenditures won’t be at a hundred percent. It’s never happened. We don’t let it happen, to be quite honest … We maintain what I think is pretty good, what I call, budget discipline throughout the year. We don’t allow a lot of transferring.

“So if that was the amount for that item, you’ve got to stay within it. And just be-cause you had dollars left over from some other account, we’re not necessarily going to do that. That’s why I’m pretty confident that we’ll do better than we show here. And I think even this current year will be better than originally projected.”