DERRY — The school district looks to be facing a $1 million increase over the current year’s school budget just as the process for the 2013-14 school year is beginning.

“We are looking at some mandated obligations that have considerable costs to the district,” said Superintendent Laura Nelson.

Nelson estimated those federal and state mandates could cost the district in the neighborhood of $1 million in the next budget.

The biggest increase comes as a result of the state’s school districts paying the full portion of New Hampshire Retirement System costs. Nelson said the district will be faced with a 25 percent increase of about $750,000 to pay the full portion of retirement costs that had previously been paid by the state.

“We are also looking at some obligations from the federal health care law,” said Nelson. Because of the penalty portion of the law and the fact that the district has more than 50 employees, she said the schools could see a financial obligation of between $250,000 and $450,000.

“We are looking at about $1 million in new spending passed onto us that needs to be accounted for in the next budget,” said Nelson.

The superintendent said she brought the preliminary numbers before the School Board because she did not want the board to be surprised by the additional costs once the budget process begins in October.

Board Chairman Brenda Willis sarcastically thanked the state and federal government for passing additional costs onto the local districts.

“This is very frustrating, and it directly impacts the kids,” said Willis. “I’m furious.”

The budget process for the 2013-14 school year gets under way with five budget work sessions scheduled to take place on Oct. 22, Nov. 5 and 22, and Dec. 10 and 17 at the Gilbert H. Hood Middle School.

In the spring, voters approved a School Board-backed budget of $79,062,937 for the current year, which was an increase of 1.1 percent over the previous district budget.

The budget included a new three-year teacher contract.

The agreement sees teachers getting a 1 percent raise in the first year, a 1.5 percent raise in the second year, and a 2 percent raise in the third.

The increase in salaries, including step raises and benefits, at the current staffing levels are $761,986.57 for the current school year.

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Adam Swift may be reached at aswift@newstote.com.