Andalusia City Schools is expected to begin the next fiscal year with a $16.17 million budget and an ending fund balance of nearly $238,480 more than it started the current budget year, school officials learned Mon-day at the first of two budget hearings for the upcoming fiscal year.

The school system, like all school systems, is coming off a budget year that had 3 percent proration, which cut $300,000 from the system’s budget.

ACS is projected to receive $8.5 million from the state of Alabama in the 2012 fiscal year.

Before proration, ACS was expected to receive $8.9 million by Sept. 30, which is down from the $9.6 million the system received in fiscal year 2009.

The system is expected to receive $1.7 million in federal funds, $3.35 million in local revenues and $33,500 in other revenues. Also factored in the budget is $2 million in Qualified School Construction Bonds for the new physical education facility at Andalusia High School.

The system’s expenditures are slightly less than its total revenues at $16.12 million.

The final budget hearing will be held Sept. 13 at 5:30 p.m. at the Central Office.

Chief Financial Officer Jean Sellers said she hopes to have a little more than one month’s operating reserve once the current budget year is complete.

“Our one month’s operating reserve is $800,000,” she said.

Superintendent Ted Watson said losing reserve money is a “slow, crawling back situation,” and not one the system wanted to find itself in.