When it comes to revenues in the proposed 2009-2010 Steel Valley School District budget, there is good news and bad news.

During a meeting of the school board's fiscal management committee Tuesday, the board heard that the district stands to get an additional $1.9 million in federal funding from President Barack Obama's stimulus package if it is approved.

In addition, general state subsidies are currently set to increase by $247,261.

Those revenues will be a help in balancing the 2009-2010 preliminary budget that currently totals $28.4 million.

But special education funding from the state is projected to drop by $16,253 and mounting expenses created by the number of students attending the Propel schools in Homestead and Munhall are costing the district about $1.76 million a year.

That number causes concern to Director of Operational Services Mark Cherpak and Superintendent William Kinavey.

Dr. Kinavey said he expected the decrease in special education funding because the district has lowered its special education costs by reducing the number of special education students being educated outside of the district from more than 50 to 35.

But, he said, he remains concerned about the number of district students who are choosing to attend Propel's schools, which are located within the district boundaries. Propel operates Propel Homestead, an elementary school, and Propel Andrew Street High School in Munhall.

The superintendent said he would like to see the public schools promoted more heavily so that parents choose to enroll their children in the district's schools rather than charter schools.

The district currently has 143 students attending Propel Homestead. Of that total, 29 are special education students. Steel Valley has 17 students at Propel's high school, two of whom are special education students.

Mr. Cherpak said the district pays Propel $9,379 for each regular-education student, while the cost to educate them within the district is $7,180. He said the district pays Propel $17,724 for each special education student.

Steel Valley's total monthly payment to Propel is about $147,000, for a total of $1.76 million annually.

There's more bad news on the charter school front. Steel Valley is set to see a $143,870 reduction in charter school reimbursement for 2009-2010, Mr. Cherpak said.

The board still has not gotten into enough detail about the budget to project any total for a tax increase.

But the state would allow the district an increase of up to 5.7 percent, a threshold the board has voted not to exceed. A tax hike in that amount would mean an additional 1.2 mills. School directors have said they are committed to keeping any tax hike as low as possible.

In other financial news, Mr. Cherpak told the board that the district will take out a tax anticipation loan in the amount of $1.75 million in order to be able to pay bills and meet the Feb. 20 payroll. The loan, which will cost about $3,400 in interest, will be repaid in April when the district receives its tax revenues from the Waterfront tax increment financing deal.

Mr. Cherpak also announced that he has imposed a spending freeze in the district and that the only spending, outside of paying bills, that he will approve will be items related to graduation and end-of-year activities for high school seniors.

The fiscal management committee will hold another meeting at 6:30 p.m. March 10 to discuss expenditures in the proposed 2009-2010 budget.