Willow Run Community Schools is expected to operate with a $411,000 surplus to help pay off the district's debt in 2011-12, after the school board passed a budget Thursday that includes a 10 percent cut in compensation for all employees.

The district had to fill a $1.169 million budget deficit for the 2011-12 school year, and the district is slated to spend about $19.1 million total for the 2011-12 school year. The budget was passed unanimously.

Superintendent Laura Lisiscki said the budget approved by trustees included many difficult choices, but she believes it will be another step toward dragging the district out of debt.

"We have a lot of momentum and we still have a ways to go, and I think we’re going to go far," Lisiscki said. Trustees also approved a new contract with Lisiscki through the 2013-14 school year.

Among the other reductions in the 2011-12 budget were:

• The closing of Kaiser Elementary School and Cheney Academy as part of the district's redesign plan.
• The reduction of two principal positions through retirement.
• The layoff of the district's attendance director, a social worker, two secretaries, five paraprofessionals and two custodians.
• Requiring employees to contribute 20 percent toward health care.

For a spreadsheet of the budget as presented Thursday, click here.

The district is expecting to pay off the same amount of debt it paid off in 2010-11. The district currently has a $2.4 million deficit in fund balance.

The 2011-12 budget deficit is mostly due to cuts in school funding coming from the state. According to the budget passed by state legislators in May and signed by Gov. Rick Snyder earlier this month, school districts will see a new $300 per pupil cut and a $170 per pupil cut that was originally passed under Gov. Jennifer Granholm that would not be restored.

Willow Run is expecting to see retirement costs increase to 24.46 percent, a 4 percentage point increase from last year. The state is giving school districts a one-time payment of an average of $100 per pupil to help deal with the increase in retirement costs.

The 10 percent cut in compensation for all employees is expected to save the district $747,164. The cut means employees are being paid at 90 percent of what they were paid in 2009-10. Teachers and administrators took a 4 percent cut in compensation for the 2010-11 school year. The savings on health care are expected to be $671,710.

Bert Emerson, director of business services, said the two measures would not only help balance the budget but would put the district in good shape to receive the extra $100 per pupil incentivized funding the state has offered to districts who meet “best practices” set forth by Snyder.

“I think we will qualify for that even if they come up with a different combination (of standards),” Emerson said. “We need that kind of money.”

The district will be forced to borrow $7 million from the State Aid Program to help meet payroll demands. Emerson said the district is forced to pay employees before money from the state would come in to supply that payment.

Willow Run is undergoing a major redesign next year, which in addition to closing Kaiser and Cheney will see the district organized into the remaining four buildings.

Pre-kindergarten through first grade students will attend the Willow Run Primary Learning Center (formerly Henry Ford Elementary School); second through fourth grades will attend Willow Run Elementary Learning Center (formerly Holmes Elementary School); fifth through seventh graders will attend Willow Run Intermediate Learning Center (formerly Willow Run Middle School); and eighth through 12th graders will attend Willow Run Secondary Learning Center (formerly Willow Run High School).

School board president Don Garrett, Jr. said the financial realities of the state and education in general took effect in this budget. However, he’s encouraged by the district’s redesign and the attitude of change he believes is sweeping the district.

“It’s a very positive attitude we have going forward,” Garrett said, adding that state leaders have told him “if student achievement is not your number one priority in these times, you’re not going to make it.”

After passing the budget, trustees unanimously approved extending Lisiscki’s contract with the district until 2014. She will continue at the same pay level she originally received when named the permanent superintendent in September, $120,000 annually.

Trustees were effusive in their praise for the job Lisiscki has done since coming into the district as interim superintendent in November 2009.

Trustee Kristine Thomas said she was looking forward to continuing the district’s work with Lisiscki.

“She has done an extraordinary job to get us to the point we’re at now,” Thomas said. “I’m looking forward to working with her for the next three years and getting even more out of her.”

Kyle Feldscher covers K-12 education for AnnArbor.com. He can be reached at kylefeldscher@annarbor.com or you can follow him on Twitter.