category. The evidence shows that the State requires districts with weak solvency ratios to be "more conservative budgeting revenues in the next budget year and [have] more stringent cost controls."
Other evidence provided by the District further shows that in the 2005-2006 school year the District outspent its incoming revenue by $310,000. Both the AEA Director of Finance and the District's auditor testified that the District must reduce its expenditures if it hopes to have a balanced budget in the future, as it is only expected to receive $7,831 in new money from the state for the 2007-2008 school year.
The court finds the District has demonstrated by a preponderance of competent evidence that it is experiencing budgetary problems.
3. Reduction and realignment of staff. Finally, the District claims Martinek wasterminated because of the need for a reduction in administrative staff. The District states that due to the drop in enrollment from the 1999-2000 school year to the 2007-2008 school year it needed to reduce staff. Since 1999-2000, it has reduced teaching staff from approximately 70 teachers to around 55 teachers today. In that same time period, the District did not reduce any administrative staff positions.
In response to the declining enrollment and budgetary concerns, the District decided to reduce the number of administrative staff. The Board determined the best way to reduce school administrators was to eliminate the elementary school principal and divide that position's duties between the superintendent and the high school principal. Martinek was the District's only elementary school principal, and, therefore, she was the administrator