ENUMCLAW, Washington (STPNS) -- Combining the administration at two schools, eliminating the activity bus and cutting classified staff are three of the many areas the White River School District administration will be cutting as it struggles to gain financial stability.

The cuts total nearly $1.7 million. Superintendent Tom Lockyer sent a letter to parents and community members Monday explaining the reductions.

He said districts across the state are facing significant budget challenges not necessarily related to enrollment reductions. Most shortfalls, he noted, are due to the lack of funding provided by the current state formula.

In his letter, Lockyer said ?White River has been operating outside of its means for some time and we are simply going to have to operate within our funding allocations and categorical dollars.

?As stewards of those limited dollars, we feel these reductions will bring us to a sound fiscal position.?

The White River School District has made significant cuts since 2003, but Lockyer called those ?Band-Aids.?

The district has been under the watchful eye of the state. The Puget Sound Educational Service District, assigned to monitor White River?s financial situation, has been helping with the process.

Lockyer said about 80 percent of the district?s budget goes to salaries. The state funds salaries based on a formula. Most districts, like White River, hire extra staff beyond those numbers to keep, for example, student-teacher ratios smaller. That money is paid by the district and, with each salary increase approved by the state, a strain is placed on the district?s purse strings.

Lockyer said the district was closely watching the Legislature. Its 3.9 percent cost-of-living increase, along with other increases, was a factor in White River?s decision making.

What scares Lockyer is the district?s reserves have dwindled to $400,000. The rule of thumb is for districts to keep 3 to 5 percent of its total budget in reserves for emergency situations like covering payroll in a shortfall or if a catastrophe strikes the district. Bond ratings are also based on reserves, Lockyer said.

The hard part, Lockyer said, will be building the reserve back to an acceptable level.

?It will take longer and we?ll need to be vigilant,? he said.

Lockyer said he feels confident the district is addressing the issues and the changes will not impact student learning or the district?s mission.

Lockyer outlined five areas for cuts: Administration, transportation, certificated staff (teachers), classified staff (paraeducators, etc.) and programs.

Some of the more visible changes will come in administration. Wilkeson and Wickersham elementary schools, both with student populations at around 200, will share a principal. White River High?s dean of students position will disappear. The district already eliminated its business and operations manager and  combined its transportation and maintenance director into one position. The district?s assistant superintendent position will not be filled when Roger Marlow retires in June.

Those changes are expected to save the district $350,000.

Transportation, Lockyer said, will take a couple of years to complete, but current routes will be streamlined for the 2008-09 school year. That means reducing or eliminating some stops. Summer School transportation and the after-school activity bus will be eliminated. These changes are expected to save $200,000.

With the district?s enrollment in a holding pattern, Lockyer said certificated staff will be reduced through attrition or through programming. The cuts and changes will hopefully save $180,000.

According to Lockyer, White River is significantly over the state formula for classified staff and will be reducing staff where student learning is not directly impacted.

?We are significantly above comparable districts,? he said.

In the basic education state allocation, White River receives funding for about 72 full-time equivalent (FTE) staff. Currently, White River has 138 FTE staff. Most districts of the same size, Lockyer said, have 117.

Lockyer said the district will now match its formula to each school?s student population and apply it to staffing. These reductions are anticipated to save the district about $550,000.

Finally, the district will eliminate sixth-grade camp and the Good Samaritan Counseling program right away. The Collins Alternative Programs, which have also been down in enrollment, can also expect changes. These cuts will save the district about $410,000.

Brenda Sexton can be reached at bsexton@courierherald.com.