Norwich — Halfway through the 2018-19 fiscal year, the projected school budget deficit has been cut from the estimated $4.5 million to $2 million, including $1.3 million in savings attributed to a switch to a high-deductible health insurance plan, school officials said Tuesday.

In a “best case scenario,” school Business Administrator Athena Nagel told the school board the deficit could be cut to $500,000 by the end of the school year.

The City Council in June approved a $78.4 million school budget with a 3 percent increase, $4.5 million lower than school officials had requested and said was the minimum amount needed to run the district.

School officials immediately froze all but emergency spending, enacted the health insurance change and asked all contractors and vendors for a 5 percent reduction in bills to the school system. The vendor request yielded only a $10,000 reduction in printing costs.

“Minor concessions have come from other vendors,” school board Chairwoman Yvette Jacaruso and budget committee member Mark Kulos wrote to Mayor Peter Nystrom and the City Council Dec. 21, “but since we are in a freeze situation, we can’t take advantage of those savings unless we purchase items. Tuition costs were set by contract and could generally not be altered for this fiscal year.”

The school district also received “an unanticipated increase” in grant funding totaling $400,000. Former Curriculum Director Thomas Baird was named assistant superintendent and his salary was transferred to a grant for additional savings. His previous position remains unfilled in the hiring freeze.

Additional savings were realized by hiring behavioral response teams to assess special education students to reduce out-of-district special education placements, a projected savings of $740,000, not including transportation.

“Please understand that many outside factors could greatly affect our current budget in the coming months,” the two school officials wrote. “A natural disaster like Hurricane Maria that hit Puerto Rico could lead to a sudden unanticipated influx of students — some with special needs and more English (language) Learners EL — which would strain our resources.”

Nagel said she discussed budget issues with city Comptroller Josh Pothier and told the school board Tuesday that in a “best case scenario,” the projected deficit could be as low as $500,000.

The school board Tuesday heard a presentation from officials at Lyman Memorial High School in Lebanon requesting to become a designated high school for Norwich students. Lyman has about 340 students and could accept 40 to 50 Norwich students, Lebanon Superintendent Robert Angeli said.

Lyman currently has tuition students from Sprague, Bozrah and Franklin — all three also are partner districts with Norwich Free Academy — and regular education tuition is $11,200 per student this year. NFA tuition this year is $12,562 for regular education. Angeli said next year’s tuition rate is not yet set, but he did not anticipate “huge increases.”

Angeli said special education would be billed on an “as-needed” basis, with some sending districts paying for instructional assistants or other specialists and therapists, and Lyman billing for use of services and resources provided by the school.

The board did not take action on the Lyman proposal. Angeli said if the board approved adding Lyman as a designated high school, an agreement would have to be written between the two districts.

c.bessette@theday.com