Published: Thursday, September 13, 2012 1:09 AM CDT

The Yankton School District (YSD) school board  unanimously approved the operating budget for the 2012-13 school year at its meeting this week.

The 2012-13 general fund budget of nearly $14.9 million represents a reduction of over $1.7 million, or a 10.6 percent decrease, compared to the 2011-12 adopted budget. The 2012-13 decrease to the general fund, compared to 2011-12, is primarily due to the utilization of health insurance reserves from YSD’s self-insurance fund, in addition to the reduction of positions.

In order to cut back, the district cut three teaching positions, a dean of students position, eliminated fifth grade coaching positions and froze the classified and administrative salaries for the third consecutive year, along with year two of pay freezes for certified coaching and advisory  positions.

“For the current budget implemented by the board on Monday, we have made efforts at reducing the budget,” YSD business manager Jason Bietz said. “The source of our problems is in the general fund, as it related to the cuts that were implemented a couple years ago by the legislature.”

Bietz added that YSD officials are constantly evaluating how many students they are serving and the ways in which they can be served more efficiently.

“Right now we have our class sizes set at such a point where if we had the resources we would love the additional staff,” he said. “When enrollment has dropped, we’ve responded by making adjustments to teaching positions accordingly.”

On Aug. 31, enrollment at YSD was 2,691 students. This was up from 2,665 in September 2011, and 2,632 in May 2012.

The official student count for state aid funding will come on the fourth Friday of September, and enrollment typically changes from the beginning of the school year until that date.

“We take the number of students we have in the district on the 4th Friday in September for the official count,” Bietz said. “The first day of school count always fluctuates from where it is on the fourth Friday.”

YSD has been experiencing a decreasing student enrollment since the 1997-98 school year, when enrollment was at 3,341 students. Enrollment has declined nearly every year since then.

School districts across the state are allotted $4,490.92 per student, a number that is subtracted from the local tax effort in the community. The end result is the amount of state aid a school gets to operate.

“It’s a very complicated formula,” Bietz said. “Every year, the per-student allocation number is at the center of discussion for the legislature when they discuss school funding.”

Bietz added that the biggest thing people need to understand is YSD is trying to make the most out of what they have right now.

“Right now, we’re robbing Peter to pay Paul,” he said. “We’re going to be on a cliff and what we’ve done with this budget is push the cliff out a year or two.”

He added that the district is going to need more revenue from what was cut out of education funding a few years ago.

“We’ve been wrestling with revenue shortfalls for so long it’s just a foregone conclusion that we’re going to be looking at how we can get things done for less,” Bietz said. “The outlook on having new money handed to us from the state or federal government is not promising, so we will continue to look at cutting things where we can.”

With changes to the district’s health insurance policy, YSD should save about $500,000 a year to the internal services fund.

“When you manage your health insurance program, it gets funded by our operating budgets,” Bietz said. “We are utilizing our own reserves from the health insurance fund now to keep our general fund intact now.”

Changes to the health care plan will go into effect Jan. 1.

“When the health insurance fund gets to a place where we have to reposition how it is funded, we will be on the cliff with our general fund,” Bietz said. “We are just prolonging the fiscal cliff.”

The district will move from the First Administrators insurance plan to Wellmark. YSD will also change over from the two-tier system they are currently operating to a four-tier model.

The current two-tier system covers employees and their families, while the new system will allow for more flexibility. The four-tier model has an option to cover a single policy member, employee and spouse, employee and child(ren) and a family option.

Under the new four-tier structure, some families would have savings, but others could end up paying more out of pocket if they must have a hospital visit.

“Our health plan has been a success,” Bietz said. “We’ve been self-funded for 11 years. If we weren’t self-funded we would have had the reserves in place that we’ve had. If we didn’t have the savings to lean on, we would have had to implement cuts a few years ago.”

Bietz said the district will be at a crossroads in years ahead.

“Eventually you have to make adjustments to balance the budget,” Bietz said. “There will be many challenges going forward.”

Over the past few years, YSD has eliminated more than a dozen teaching positions and several bus routes. The district has also held the line on school supplies for more than a decade.

“The state has been paying less than they were, while taxpayers have been paying more than they have been in the past,” Bietz noted.

He added there is a ballot issue in November which could bring additional revenue for education and Medicare, if voters approve.

“They have not quantified it specifically down to the district level, but the early estimates based on sales data in 2011, was it could produced upwards of $1.8 million a year for the Yankton School District,” Bietz said. “That’s just an estimate coming from the Department of Revenue. We are watching this closely because it could have a huge impact on where we go further.”

“The problem hasn’t gone away, we are still dealing with the cuts enacted by the 2011 Legislature.”

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