POULSBO — The North Kitsap School District’s Budget Advisory Team has spent the past few months, performing the agonizing task of prioritizing the nuts and bolts needed to keep area schools running in good form.

“When we build a budget, we can only build on what we think our expenditures will be,” said NKSD Supt. Gene Medina.

Laying out proposed expenditures and revenues for the upcoming year’s budget, the BAT was faced with the challenge of evening out an estimated $1.7 million shortfall for the 2006-2007 school year.

Here is where that estimated shortfall for is coming from (round-numbers used in the interest of comprehension):

The projected revenue for 2006-07 came in $82,000 less than the projected expenditures for that year. That amount added to expected expenditures planned for Kingston High School, levy money carryover and inventory in 2006-07 left the budget short of its school board-required reserve account by about $630,000.

“(The reserve fund) is there for emergencies and unforeseen kinds of things,” said NKSD executive director of finance and operations Nancy Moffatt. “It’s like have a small savings account in your home that you can fix the car with.”

In addition to the $630,000 needed to fill in that reserve account, the district’s transportation and special education costs will the rise in 2006-07.

Next year’s cost for materials for NKSD’s special education programs is estimated at $650,000 more than what state and federal sources cover while transportation costs for the district are expected to increase by just over $200,000.

Math and literacy curriculum adoptions passed this year by the school board will contribute a debit of almost $250,000 to purchase the materials for those curricula.

The reserve account shortfall added with those three items, and a debit of just over $9,000 to partially restore the district’s community relations/volunteer program add up to a total budget shortfall of $1.7 million.

At the school board budget study session May 25, board director Dan Delaney revisited the idea of putting out suggestion boxes at schools throughout the district to collect thoughts on how the NKSD could pinch some pennies with the least negative effect on education.

“I think it’s a good idea to try and go from the bottom up,” Delaney said at the study session. “It’s going to get ugly from (this year) on out and I’m thinking maybe we could spread the responsibility.”

The board and the BAT team seemed to be in favor of Delaney’s idea, but not until next year’s process

“Our priority right now is to get a (2006-07) budget to bed,” Moffatt said, noting that the BAT had finally found a formula to cover the district’s estimated shortfall.

Here are some of the major areas in which the BAT has suggested cuts to cover the shortfall (none will be finalized until June 22, round numbers used in the interest of comprehension):

The BAT team met with department leaders and “everyone who had a unique situation,” Moffatt said, in order to prioritize what to keep and what to cut.

“We grilled them as a BAT team,” Moffatt said.

“Line item by line item,” Medina added.

The biggest budget cut listed is the salty issue of increasing class sizes by one at the K-6th grade level and by a half at the 7th-12th grade level. Projected savings from that increase add up to more than $570,000, but board members found it hard to swallow at the study session.

“I’m still trying to reconcile, in my mind, why we are increasing class size while as a board we’ve been working over the past few years to lower class size,” said board president Catherine Ahl.

The increase would save the district the most money of all the proposed cuts, while the next biggest cost-saving measure would come from a freeze on 2006-07 levy funds.

About $300,000 would come from freezing estimated levy inflation costs, leaving the levy-funded programs with money based on 2005-06 costs.

“That seemed like a way to spread the pain across everything,” Moffatt said. “We are not going to give those programs (across the board) inflationary dollars, they will have to cut back (as is necessary).”

The BAT found another possible $250,000 savings with a $155,000 reduction in classified staff and the elimination of half-time assistant principals at Poulsbo and Kingston junior highs.

“We’re going to try to keep (those cuts) as far away from the classroom as we can,” Moffatt said.

Other proposed cost-saving measures range from a half-teacher position reduction in instructional support at Spectrum to the implementation of a new district-wide energy policy.

As of now, all cuts are preliminary and proposed, but Moffatt expects the BAT’s recommendation to be finalized and reported at the June 22 school board meeting.

Then the board should make its decision at its July 13 meeting.