TRAVERSE CITY -- Administrators in the region's largest school district anticipate a nearly $4 million deficit next year, given rising costs for diesel fuel and limited state funding increases.
The preliminary fiscal 2009 budget for Traverse City Area Public Schools projects expenses of $90.8 million, with $86.8 million in revenue.
The district's fund balance would cover any deficit, which administrators predict will lessen as estimates become true numbers. But the fund balance could shrink from about $11 million to as low as $7 million by next June in the worst-case scenario.
A budget hearing is planned for today's school board meeting.
"When you cut right down to it, it's a pretty simple story," said Paul Soma, TCAPS' chief financial officer. "We're not getting much in terms of state revenues. We're having huge triple-digit increases in natural gas and fuel costs."
Transportation funding will increase by almost $200,000 next year, most of which is based on the rising cost of diesel fuel, Soma said.
For the first time, fuel will compose about $1 million of the $6.9 million allocated for transportation. Five years ago, diesel made up just $250,000 of the budget.
Escalating costs are forcing the district to consider new ways to improve its efficiency, including using a van to transport special education students and upgrading technology that could better define bus routes.
"It's irresponsible to look at this and say we're just going to ignore it," Soma said.
The district almost certainly will have fewer students to transport next year, although that doesn't necessarily translate into fewer miles traveled.
The district is projected to have 10,320 full-time equated students next year, down from 10,599 this past year, an anticipated loss of 279 students.
Full-time equated, or FTE, is calculated based on how long students are in school each day and is the figure the state uses to calculate how much funding districts receive.
This summer, Christine Davis, the district's executive director of human resources, will analyze enrollment data from Glenn Loomis, Norris and Bertha Vos elementary schools. Those schools closed for good after the school year ended June 11.
"I would expect that many of them will be staying with us, if it holds true to the previous three school closings," she said, referring to the shutting of East Bay, Oak Park and Sabin schools.
School leaders have said that 156 of the 270 Norris students will attend Willow Hill and Long Lake schools, about 91 percent of Glenn Loomis students will move to Central Grade School and about half of Bertha Vos' roughly 240 students will attend Courtade.
Both the Norris and Bertha Vos totals, however, include exiting fifth- and sixth-graders.
Roughly $1.4 million is estimated to have been reduced by closing the buildings, mostly in administrative and other overhead costs. The dollars will be invested into new programming, although those expenses will be about $400,000 more than savings.
Among the new offerings are expanded all-day, everyday kindergarten at two more buildings and a trimester high school schedule.
Despite the cost, Soma said it was necessary to make changes now.
"What we needed was substantive reorganization," he said. "That comes with a price tag."
There are some signs of hope, however, given the challenges. The state has created a funding formula that provides greater increases to the lowest-funded districts, including TCAPS.
But "unless things change dramatically in Lansing, which I don't see, we're going to have lean years ahead of us," board member Marjie Rich said. "As a district, we just don't have a lot of finances relative to other districts."
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