SOUTH OTSELIC – Otselic Valley Central School District Superintendent Richard Hughes said he was well aware the biggest challenge he would face when he took over in July was the 2011-2012 budget.

Due to an estimated 9 to 10 percent increase in health insurance costs, approximately $170,000 in retirement system increases, expected increases in energy costs, the loss of $154,000 in federal stimulus aid and an expected 5 percent, or $255,000, reduction in state aid, Hughes reported a total estimated budget gap of $516,500 for the approximately $9 million 2011-2010 budget.

That figure, however, does not include payroll increases, and Hughes admitted the total budget gap could soar to $750,000 or higher.

To address the issue, the district has once again formed a special Board Advisory Team for Facilities, Buildings and Grounds. The committee is comprised of approximately a dozen local residents and chaired by former superintendent and local resident Jim Franklin.

“The whole premise of this team is to look at all the issues we’re facing, get everything on the table and find the areas where we can improve,” stated Hughes. “We have to find the problems first, before we can make any kind of decision on what to do and we need to get more input from the community, they’ll be involved throughout the budget process.”