East Lyme - Superintendent Jim Lombardo on Tuesday proposed a $42,041,219 school budget for the 2012-13 fiscal year - a 3.82 percent increase over the current budget - with four fewer teachers due to decreasing enrollment.

But despite the expected reduction in teaching staff - a savings of $243,000, which Lombardo said he expects to achieve through retirements - contractual wage increases mean staff salary and budget line items comprise the bulk of the proposed increase.

During the past two years, the school district has been paying some staff salaries with federal education jobs funds, which will not be available in 2012-13, Lombardo said. That means the district next year will need to build $370,000 into the school budget to compensate for the missing federal grant money, he said.

The areas with the largest budget increases include salaries ($1,015,946); custodian overtime, everything from custodial help for a maintenance issue at one of the schools to hiring substitute custodians when a staff custodian is out sick or on vacation, ($154,290); and unemployment for laid-off staff ($50,000).

The supplemental salaries line - for coaches, advisers and others - will see a $142,549 increase, Lombardo said, because that line item was mistakenly underbudgeted by more than $100,000 two years ago. That line item for 2012-13 has been adjusted to reflect the correct budget amount, resulting in the increase, he said.

The district can expect to see about $151,000 in special education cost savings "by having programs available to students here in the district," according to Lombardo. There also will be a savings of $10,700 in fuel costs, achieved in part by switching from oil to natural gas at three schools, and a $20,000 reduction in legal fees, among other savings.

The district was paying some $1.4 million in 2008-09 for special education, Lombardo said. Next year, with a special education budget of about $703,000, the district will have halved the cost of educating students with special needs, he said.

"I think that's been a great success," Lombardo said.

j.cho@theday.com