By Patrick Tepoorten

New funding streams and unexpected asbestos abatement costs will contribute to what is likely to be a 8.82 percent increase in the 2007 - 08 North Branch area school districtís annual levy.

In certifying the preliminary levy last Thursday, the school board approved the maximum allowable levy under its authority, $6,378,742.29, but retained the right to reduce the total levy before final certification, Dec. 28. However, while some minor things could change between now and then, it is not expected that the final levy will differ greatly from the proposed levy.

The largest increases to the upcoming levy are in areas of maintenance. A new category has been created by the state to assist smaller districts with large maintenance projects. To offset those potential future costs, the district is levying $133,271.57. In doing so, it will receive $47,736 in additional state funding. The funds can only be used for deferred maintenance costs, but can be used every year or saved over a period of years for major maintenance projects. The funds could also be used to offset the costs of future maintenance levies.

Unexpected asbestos abatement costs at the primary school have resulted in an over $200,000 increase to the health and safety levy as well.

The largest piece, of the proposed levy is dedicated to debt service. Referred to as ìvoter approved levies,î the roughly $4.8 million is primarily bond pay back for construction of the Sunrise River School.

Even with the 8.82 percent increase in the local levy, the district is faced with making roughly $2 million in cuts to expenditures in order to balance the books. Then again, that could change.

It is a biennium year at the state legislature and, as it fashions its own budget, the funding formula could increase, possibly reducing the expected deficit in North Branch.

Also, with the current year budget still in affect, the district can only project what the fund balance will be at the end of the fiscal year. The district strives to keep its fund balance at a $1 million minimum. Any funds above that level will be used to offset cuts in the next budget cycle

While an increase in state funding and a healthy fund balance could help local taxpayers next year, Financial Director Randi Johnson points out that decreasing enrollment is likely to affect the amount of money it receives from the state negatively.

Before the final levy is approved at the end of December, the district will hold Truth in Taxation hearings to allow taxpayers to challenge the levy or simply have their questions answered. North Branch has scheduled that hearing for Dec. 7. If need be, the hearing would be continued on Dec. 14.

In other district news:

ï The board approved a two-year contract with the North Branch Principalsí Association. The negotiated agreement begins retroactively on July 1, 2006 and continues through June 30, 2008.

The contract represents a four percent overall increase in salaries and benefits.