Despite implementing a series of cost-cutting measures, the budget deficit at Klamath River Early College of the Redwoods has grown, and the school is now in danger of losing its charter.

KRECR's projected deficit for the 2012andndash;13 school year is $257,000, Director Bernadette Johnson told the School Board on Tuesday. The school has been able to raise $3,000, but expenses for books and supplies as well as operating expenses, are up by $29,000, she said.

KRECR has struggled to raise funds since December when, due to a budgeting error, school representatives projected a negative balance of $168,000 at the end of the school year. Since then, KRECR has hired EdTec, business and development specialists for charter schools, to do its bookkeeping.

"The good side of this is our relationship with EdTec," Johnson told the School Board. She added that KRECR is expected to have a positive budget in the next two years. "Now we know what our financial situation is and we have the expertise to respond."

But Superintendent Don Olson noted that KRECR's situation has gotten worse since it came before the Board in December. The School Board authorized Olson to give a letter to KRECR, notifying representatives of its intention to revoke the school's charter. But, he added, the County Office of Education doesn't have to follow through on its threat.

"In 30 days or later, the Board will open a public hearing," Olson said. "That will be KRECR's opportunity to come to us and tell us why we should keep them open."

Thirty days after the public hearing, the Del Norte County Office of Education will notify KRECR in writing of its decision to either let the school stay open or to shut it down, Olson said.

"In this case we would be showing that the Board is really providing fiscal oversight and oversight of KRECR," he said.

Johnson asked if the Board could hold the public hearing and make its decision sooner than 30 days. Olson said he would have to check the California Education Code's guidelines and report back to the board at its June 6 meeting.

Johnson said the KRECR Board would prefer to respond sooner. She added that she would make sure a representative from EdTec would be available to answer the Board's questions.

Board member Frances Costello said she felt that she didn't have adequate time to read KRECR's report and would like to make sure the school has enough time to prepare for the Board's meeting.

"This is very alarming to me," she said. "The school has grown and I think the move to town is a good move. But for me personally this is disheartening. This is a lot of money."

KRECR's original deficit of $168,000 was created largely because the school mistakenly used restricted scholarship funds to close a deficit in its unrestricted fund balance. The school has also been battling cash flow issues due to receiving state funds based on last year's enrollment rather than this year's higher number, Johnson said in December.

Since then, KRECR has closed its Klamath campus, eliminated a teaching position and an after-school coordinator and cut its staff salary by 5 percent. The KRECR Board also voted in February to discontinue health care benefits for its employees for the rest of the current school year.

Reach Jessica Cejnar at