Dowagiac Board of Education made its second 2010-11 budget revision Monday night at the middle school, with a third to follow in May.

General fund revenues have decreased to $20,426,967 (-$237,135) while expenses increased to $20,085,542 ($165,381), Assistant Superintendent for Business and Operations Hal Davis reported. As a result, the revised projected general fund surplus is $341,425 for the fiscal year. “Our revenues decreased because of the merger of the athletic fund into the general fund and slightly less allocations of several grants,” Davis stated. “Expenses increased as a result of the increased state retirement rate, substitute teaching expense and additional staff hired. The food service account is balanced at $1,162,365.” Davis also presented the school board with a 2011-12 fiscal projection showing how the beginning undesignated fund balance of July 1, 2010, of $4,298,35 — a 21.2-percent cushion — was being eroded to a projected $2,562,489 fund balance, or 13.8 percent of the budget, by June 30, 2012.

The first change projected for next school year is the loss of federal recovery funds, $952,861, and an anticipated state aid decrease of $300 per fulltime equivalent, which costs the district $720,000 — a total of $1,672,861 less in revenue, to $18,591,251. On the spending side, the budget anticipated $19,523,671, which has gone up $803,443 to $20,327,114 because of a 3.8-percent retirement increase ($361,000), $210,761 for step increases and $231,682 for speech and special  ed services shifting back from the LCISD.