While Lindbergh Schools officials are looking to cut roughly $2.1 million from the 2010-2011 budget, that amount could increase to more than $3.7 million, depending on the cost of salaries and benefits for district employees.

Chief Financial Officer Pat Lanane outlined the district’s budget situation along with projected salary and benefit costs for the coming school year during a recent meeting between Board of Education members and Lindbergh National Education Association representatives.

The board voted last month to approve a revised budget for the current school year that projects a deficit of more than $5.1 million — $2.1 million more than the deficit of $3 million projected when the board adopted the original 2009-2010 budget in June.

The revised budget projects $55,705,910 in revenue with anticipated expenditures of $60,814,120 — a deficit of $5,108,210. The district will not go into the red, but instead will dip into its reserves.

Cognizant of the financial difficulty residents and businesses are experiencing as a result of the current recession, district officials pledged in late 2008 not to seek a tax-rate increase for at least 24 months.

Though Lindbergh also faces financial challenges as a result of the current economic recession, the district’s reserves of roughly $24.6 million are the reason why the situation is not a crisis at this point.

While the original 2009-2010 budget adhered to the district’s long-range financial plan that calls for a planned spend down of those reserves with a deficit-spending cap of $3 million per year, the revised budget exceeds that cap by nearly $2.1 million.

“… That’s the budget problem that we’re facing right now as we put together the budget for 2010-2011 …,” Lanane said.

While $2.1 million in cuts need to be made, he noted the cost of employee salaries and benefits could add nearly $117,000 to more than $1.6 million to that amount.

“… What else has to be added as we look at next year? And there’s three or four areas that we must look at, and, of course, that’s going to be the topics of our upcoming negotiations,” Lanane said, noting those areas include insurance, salaries and additional teacher costs.

While the Board of Education in November approved a three-year agreement with the LNEA, such items as salaries and insurance will be negotiated annually due to the fluid state of the district’s finances.

As projected, the cost of employee insurance could increase by $101,920 to $195,500, depending on the outcome of negotiations with teachers.

“… That total increase would be $195,000. Now that amount could be tempered in some way, depending on the final outcome of negotiations and so that number could be anywhere from $195,000 to $101,000, depending on which of these options we would finally settle upon,” Lanane said.

The chief financial officer also outlined the potential cost of a salary increase for the coming year, noting that even a 1-percent salary decrease would cost $15,000.

“… What you see here are the costs to give a decrease up through an increase of 2 percent. These are all employees, not just the teacher group. But typically every year whatever percentage we’ve done for teachers, that’s what we’ve also done for the rest of the staff,” Lanane said. “And so you look at the first number and say: How in the world can a negative 1 percent equal a $15,000 increase?

“And the way that works is exactly this way: You still have the insurance increase and that’s included in this number. You then have to add the increase in retirement, which is 0.5 percent for teachers and 0.25 percent for classified staff. That’s about $180,000 or so. And so even a small decrease ends up being a net increase because of insurance and because of retirement …,” he explained.

Salary scenarios Lanane presented include:

• An across-the-board salary decrease of 1 percent would cost $15,000.

• No salary increase for employees would cost $382,400.

• An across-the-board salary increase of 0.5 percent would cost $566,200.

• An across-the-board salary increase of 1 percent would cost $749,900.

• An across-the-board salary increase of 1.5 percent would cost $933,600.

• An across-the-board salary increase of 2 percent would cost $1,117,400.

“… And, of course, I have ‘other’ down there if none of these numbers work,” he said. “The point of this being you have to pick one of those in this category (insurance). You have to pick one of these in category (salary), even if it’s ‘other.’ And then the third piece is the other costs that are associated with the teacher salary schedule …”

Educational movement costs could total roughly $86,500 while the cost of teachers advancing to longevity steps — four to the master’s degree column and 18 to the master’s degree plus 30 hours of graduate work column — could total nearly $231,000, Lanane said.

In addition, the cost of two national board-certified teachers could total more than $5,700.

So depending on the outcome of negotiations with the LNEA, the school district’s budget-reduction target for the 2010-2011 school year could range from $2,216,920 to $3,736,161, he said.

The chief financial officer also cautioned that an unknown at this time is the amount of state funding Lindbergh will receive.

“There is one wild card floating out there and it’s reductions for next year in the state budget and withholdings. We don’t know what that means. We heard the state’s school superintendent utter the percentage 15 percent two or three weeks ago. If they did that, that’s $450,000 that would have to be added on to these numbers to get us back to $3 million. And those are reductions we’re talking about. So that is the amount we have to reduce and, again, that second half is unknown at this point, but I think as we’re talking about where we’re headed for the rest of this year, it’s eyes wide open. This is the situation …,” he said.

In October, Lanane outlined a process by which budget reductions for the 2010-2011 school year will be developed for the Board of Education to consider.

The process will involve the formation of a general task force and several subcommittees comprised of teachers, principals, support personnel, business leaders, administrators, parents, community members and municipal officials.

A general meeting of all committee members is set at 6:45 p.m. today — Jan. 14 — in the Anne Morrow Lindbergh Room, 4900 S. Lindbergh Blvd.