1. Reduce budget. Reduce the total budget by an amount that reflects both the decrease in the budget and the amount approved by any other participating municipalities. The amount, if any, approved by the other participating municipality may be set aside as a fund balance for the ensuing fiscal year;

2. Resubmit budget. If the board determines that the budget reduction produced by the action under subsection 1 would cause the educational programs to fail to meet the needs of the students, the board may direct the participating municipality that defeated the budget to reconsider the original budget; or

3. Revise and resubmit budget. Reduce the overall budget and submit the reduced budget to the participating municipality that defeated the original budget.

Sec. 7. Division of costs. The costs of SLD #1 must be apportioned among the participating municipalities as follows.

1. Superintendent. The costs of the employment of the superintendent and the operational costs of the office of the superintendent must be shared equally by the participating municipalities.

2. Other costs. All other costs, including but not limited to regular instruction, including teacher salaries and benefits, guidance, transportation, vocational education, special education, student activities and library and school administration, must be apportioned among the participating municipalities as a percentage and based on:

A. The average of the property values in each participating municipality, as determined by the State;

B. The population of each participating municipality, as determined by the most recent census estimate; and

C. The enrollment of residents in SLD #1 of each participating municipality, as determined by the previous