Mehlville School District officials will move forward with a plan to use cuts and reserves to offset a projected budget deficit in fiscal 2012.

The Board of Education voted unanimously last week to “authorize the administration to proceed with the budget reduction plan as presented, requiring individual components of the plan to be further developed and presented to the board at future meetings,” according to a motion prepared by the administration.

As presented to the board at its Feb. 10 meeting, that budget reduction plan contains 12 items totaling $4.6 million in potential savings.

However, the board also directed the administration to prepare a series of scenarios outlining what those cuts would look like if the board were willing to reduce the district’s operating reserve anywhere from 11 percent to 15 percent of total expenditures.

Deputy Superintendent Eric Knost stressed to board members that even though they authorized the administration to proceed with the plan, “we still have to come back to you and get your approval on the specifics.”

Among the items in the plan that carry the most savings:

• A freeze on all salaries at their current levels, $1,350,000.

• Reduction of 20 certified positions through attrition and reassignment, $900,000.

• “Realignment” of administrative positions, $550,000.

• Expenditures related to Title 1 and the Individuals with Disabilities Education Improvement Act, both of which will no longer be funded with federal stimulus funds, $500,000.

The summary also identifies $300,000 in savings by delaying textbook adoptions; $235,000 in savings from the recent refinancing of certificates of participation and $212,000 in savings by moving to a four-tier transportation system, eliminating 12 positions and delaying bus purchases.

Potential savings also include: $200,000 by delaying asphalt repairs and other projects; $155,000 in miscellaneous items from a contingency plan the board approved last spring; $100,000 by reducing supply budgets by 15 percent and $50,000 by relocating part of the district’s bus fleet.

Not included in the proposal is the previously discussed streamlining of the middle school STRETCH — Supplementary Teacher Resource for Educationally Talented Children — gifted program. The move, which would’ve eliminated 3.6 middle school STRETCH teachers for a cost savings of $180,000, evoked concerns from parents of STRETCH students, some of whom addressed the board at recent meetings.

Chief Financial Officer Noel Knobloch last month projected the district would face a $4.8 million deficit in its fiscal 2012 budget. However, he told the board last week that the reduction plan alone, with $4,606,000 in potential savings, should balance the fiscal 2012 district budget based on current projections.

“There’s been a lot of discussion in the press locally and also the state with regard to what the future looks like, and to be candid with you, it’s still not any more clear today than it was in December, and it won’t be clear until we get to April or May when we know what the state budget looks like and what we know are our own local impacts with class sizes and enrollment and cuts we can actually implement.

“A lot of the things we have here are our best guess of what we can do to get to a balanced budget. This $4.6 million would get us — with what information we know today — a balanced budget. That assumes flat funding over the next couple of years, actually a reduction in funding next year because of some things that happened with (stimulus) funds, state funds and local tax revenues. And it basically assumes that assessed valuation will be stagnant which means that we basically maintain the same level of local tax revenue that we’ve had for the last four years.”

Two weeks after the Board of Education heard the projection of a $4.8 million fiscal 2012 budget deficit, Missouri Gov. Jay Nixon proposed what he termed “level” state funding for K-12 education next year.

Nixon also recently released $17.5 million in previously withheld funds to help school districts cover transportation costs, citing an uptick in state revenue collections.

“The state has had some glimmer of hope over the last several weeks, but once again, that’s all not finalized yet,” Knobloch said. “There could be a slowdown in the next few months and they could end up in a worse situation than they’re predicting. And it’s also a political environment where, even though the governor may be projecting certain things, he has to get the legislature to approve his budget, and we won’t know that until May 15.”

In preparing a list of potential budget reductions, Knost said officials’ top priority was protecting district students from cuts as much as possible. Still, the administration’s recommendation “comprises many bold cuts that will not be easy to incur,” he said.

“Our effort here has been to trim an already lean budget to balance our finances. This plan will accomplish this goal … While we have attempted to propose cuts away from the classroom as much as possible, it truly is impossible to make such significant cuts without realizing a direct impact.

“Our preference, of course, would be to not make these cuts and to focus heavily on fiscal responsibility in our current structures, but we have no choice. We understand our community appreciates a low per-pupil expenditure, and we are displaying an absolute willingness to make tough choices while staying committed to our priority of a quality education for all students. We will work smarter, and we will make sure our community continues to receive the best possible return on their investment.”

However, board member Micheal Ocello said he didn’t agree with some of the proposed cuts. He balked in particular at the possibility of losing literacy coaches that were funded with stimulus moneys.

Ocello suggested the board establish a percentage of district operating reserves it could spend down to in order to offset some of the proposed reductions.

“I can only speak for myself, but there are some of these cuts that — if I’m understanding them correctly — I’m not agreeing with,” Ocello said. “I would rather see us … have a little bit of deficit spending. Reserves are there for tough times, for emergencies. And to spend a little bit of that doesn’t hurt my feelings because I don’t want to sacrifice the quality of education.”

Knobloch said the district could have an operating fund balance as high as 15 percent or 16 percent by the end of the current school year.

Ocello said at one point, “I would like for you to give us a couple of options, Noel, and discuss the risk, because that’s ultimately what we’re talking about is how comfortable we are having 10 percent (reserves) versus 12 versus 15.”

Knobloch replied, “And the key is how much of that that you move to the reduction of reserves is recurring (expenses) or non-recurring. If it’s not recurring then you can stop it the next year … If it’s something identifiable, as a handful of positions, yeah you can do it. It’s when you get more global and make decisions about other increases that you can’t take back.”