The Lindbergh Board of Education is continuing a planned spend down as district reserves will be used to balance the 2007-2008 operating budget, according to tentative decisions made last week during a nearly four-hour budget workshop.

Final approval of the 2007-2008 budget will be considered when the Board of Education meets at 7:30 p.m. Tuesday, June 12, in the boardroom of the Administration Building, 4900 S. Lindbergh Blvd.

Projected operating revenue for the coming school year totals $55,476,885, according to Pat Lanane, assistant superintendent for finance and the district’s chief financial officer.

Operating expenditures are estimated at $56,400,000, he told the Call, for a deficit of roughly $923,000. But the projected deficit will be offset with reserves as part of “a planned spend down of fund balances,” he told the Call.

“We think that’s worst-case scenario,” he said, referring to the projected deficit. “… As we’ve said before, we’re not getting any new state funding. We’re not getting any new federal funding. So this being a reassessment year, we will see some new revenue as a result of reassessment. We think it will be about $3 million.”

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

But current projections for the 2006-2007 school year anticipate operating expenditures of roughly $54,000,000 with estimated revenue of $52,370,000 — a deficit of $1,630,000.

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.

However, Lanane is quick to note that not all that reserve money is available. In fact, 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. As a result, of the $24.5 million operating-fund projected on June 30, 2007, only $2.5 million is unrestricted, Lanane said.

“The big one that they (board members) have told us that I have to set aside is cash flow. It takes $10.4 million to meet cash flow. We don’t think our public wants us spending their tax money on paying interest to banks. It’s as simple as that. We think that paying interest to banks is a horrible educational expense …,” he said.

Furthermore, Lanane said, “… You want to have enough balance to not borrow and to maintain your Aa2 (bond rating). That’s the other big thing, to keep that Aa2 bond rating. We think that saved our taxpayers maybe a couple million dollars on this last go-round (Proposition R) because of the better interest rate that we were able to get on our bonds ….”

The board previously had established a policy of maintaining a 25-percent operating-fund balance, but that’s been changed for the coming school year, according to the chief financial officer.

“What we’ve done is moved away from a straight percentage to how much is enough in actual dollars?”

Given that, of the $22.4 million operating-fund balance projected on June 30, 2008, $5.5 million is unrestricted.

During a work session in April, board members by consensus had given their consent to roughly $3.1 million in preapproved expenditures for the 2007-2008 school year, according to Lanane.

Of that amount, $2,031,000 will go to employee salaries, insurance and retirement, including $1.1 million for certified salaries. The Board of Education last year approved a three-year agreement with the Lindbergh National Education Association. Under the pact, teachers will receive an overall salary increase of 4.5 percent this year.

Of the remaining $1,069,000 in preapproved expenditures, $881,000 will be used for capital improvements to Lindbergh High School’s Gym 2 and auditorium.

Gym 2 will receive “a major facelift,” including a new floor and new bleachers while the auditorium will receive new carpeting, handrails, stage lighting and a new curtain, according to Lanane.

During a May 15 budget workshop, Board of Education members considered a total of $1,517,893 in additional operating expenditures for the 2007-2008 school year, giving tentative approval to $1,463,986 of those items.

Additional items totaling $53,907 were placed on hold and not included in the preliminary budget. They will be considered individually by the board June 12.

Of the $1.46 million in expenditures, technology and technology-support items totaled $489,500 — on top of a tentative technology budget of roughly $900,000 for the coming school year.

Of technology, Lanane told the Call, “It worries me that as a percentage of our budget, it continues to grow, just like it does nationwide. That by itself was the single largest increase …”

Among other expenditures given tentative approval were a 3-percent increase in building budgets for a total of $316,626, $138,376 for utilities, $105,000 for 2.5 elementary developmental mathematics teachers and $100,000 for 2.5 teachers to reduce class sizes at Sperreng Middle School.

Lanane told the Call he continues to be concerned about the district’s financial outlook.

“… The biggest financial concern I have looking out to the future is that everyone else has cut us off,” he said, noting state funding for Lindbergh essentially is frozen while federal funding is decreasing. “People don’t like reassessment … But on the other hand, I’m not sure where any increase whatsoever will be coming from without that — and that’s only every other year.”

He added, “My concern is simply the one that the only revenue source that seems to be available to a hold-harmless school district is their local tax base and that puts a strain on everybody. I don’t think it’s fair that local taxpayers don’t get more return on their state and federal tax dollars coming back to the district.”