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Waubun school looks at reserves to stay afloat

With the state budget leaving school funding flat for the next two years, at least tentatively, the Waubun-Ogema-White Earth School District is looking at a slight surplus for the next school year.

The school board passed a preliminary budget Thursday night that included a $31,647 surplus. The district also planned for a scenario where state funding was cut by 3.3 percent that would have left the district with a $209,000 deficit for next year.

But it's unknown if the state funding will hold up as Gov. Tim Pawlenty has signaled that he will use his unallotment powers and payment shifts to balance the state budget.

That leaves Waubun in the dark since the school board must finalize next year's budget by July 1. Pawlenty can't begin the unallotment process until that date.

Superintendent Mitch Anderson said that means the district would have to tap into its reserves of some $2.1 million to keep afloat if a payment shift happened.

"For us to have the fund balance or reserves is going to help out since we don't have to borrow money," Anderson said.

Taking money out the reserves will cost the district in interest money it could accrue if left untouched.

Money that is held back from districts in a payment shift could be paid back anywhere from two years to a decade or more in the future as happened with payment shifts in the 1980s.

Anderson is skeptical of Pawlenty's plans for a payment shift that would see the district getting delayed money in the 2011-12 biennum.

"I don't see how he's going to be able to do that," Anderson said. "The money he does give us back will come out of K-12 dollars. If it's not here now, it won't be here in three years."

Because the district can't cut any staff for the next year after July 1, Anderson said that more cuts could be coming, depending on what Pawlenty does.

"It might be a real tough spring next year depending on what he takes and when we'll get it back," Anderson said.

There are also some unknown streams of funding that could help the district as well. Federal stimulus money for Title I and special education should be coming the district's way.

Preliminary Title I funding could bring in $135,000 and special education funding is estimated at $145,000. Those are not final numbers and it's not known what strings are attached. Because of that, the district has not factored in stimulus money for the budget.

"It's tough to put that in here since we don't know how we can spend it yet," Anderson said.

The board also welcomed former member Jim Helliksen back into its ranks after Tom Revier, Jr. resigned last month after moving to Wisconsin.

Helliksen was not reelected in last November's election and will fill the rest of Revier's term that goes until Dec. 31, 2010.

He said that for another person without school board experience to come in during the middle of a term would be unfair to them because training sessions for new members has already taken place.

"I felt that during this time of budget unrest in St. Paul, it's hard for another board member to come in and understand the budgeting process," Helliksen said. "Especially when you are talking about cuts to the district."