St. Francis schools officials have two big problems to grapple with this winter: Not only must they figure out how to cut $1.2 million from next year's budget, but they still have to get rid of 28 mold-riddled portable classrooms at two elementary schools.

The mold issue involving "portables" at St. Francis Elementary School and Cedar Creek Community School, in Cedar, could be nearing resolution.

According to superintendent Edward Saxton, ModSpace, the company from which the district leased the units, has presented a proposal to remove the portables, which were shut down last fall after the mold was discovered. The district and ModSpace have had to negotiate terms of the removal because there are still months remaining on the lease agreements.

The district will have to pay for the removal of the units in any case, Saxton said, but it is the early termination of the leases that has to be ironed out.

ModSpace has "given us a proposal to end the agreement," Saxton said Tuesday. "We've asked for clarification."

ModSpace, based in Wayne, Pa., would not comment on the negotiations.

Meanwhile, the district has to figure out what to do with the hundreds of students displaced to gyms, a media center and another building when the portable classrooms were closed. Saxton said a plan is still being formulated.

"[The school board] will have to decide how they want to deal with it," Saxton said. "Go for another school, or lease space, or go for school additions. I don't think there's any real desire to lease more portables."

Looking for budget cuts

As for the budget cuts, those haven't been decided yet, Saxton said.

Principals are currently proposing pared-down school budgets to the district administration. The plan is for the schools to come up with $700,000 in cuts and for the central administration to identify $500,000 in budget reductions. Declining enrollment is one of the factors taking its toll on the budget, Saxton said.

"We'll have some staff leaving based on declining enrollment," he said. "We will have less teachers than we had last year and class sizes will go up based on that."

Saxton also blamed the district's budget woes on the Legislature's decision last year to pump much of its additional education funding into special education programs, which was of little benefit to St. Francis, and to give the district a basic funding raise of less than 1 percent for next year.

'Ugly' in 2009-10

The St. Francis district's three-part request for almost $4 million a year in tax revenues got a thumbs-down from voters in November. But because the current property-tax levy has a year left, things won't take a big turn for the worse until the year after.

"It will get ugly for 2009-10," Saxton said. "If we don't go out again for a levy [in November], it will be another $3.4 million to cut. Then you're talking about, if you're going to cut across the board, about a 10 percent reduction."

Saxton kept open the possibility that the board would go back to the voters for more money in November, even though district funding requests for both buildings and operations have been rejected four times in the past four years.

Also, conventional wisdom dictates against holding a referendum the same year as a presidential election, since masses of voters at the polls to vote for president might instinctively vote against anything that brings a tax increase.

"I don't try to base elections on who might show up at the polls," Saxton said.

Staff writer Maria Elena Baca contributed to this report. Norman Draper • 612-673-4547