Financial officer says the local school district is facing a “$6 million to $7 million problem” by the 2009-10 school year. Declining enrollment is the major factor affecting the district’s budget.
By Jonathan Friedman / Assistant Editor
Barring an unforeseen revenue source popping up in the immediate future, the district will have to make some significant cuts as it prepares its budget for next fiscal year and plans for its financial future in the coming years.
The Santa Monica-Malibu Unified School District’s interim-chief financial officer, Steve Hodgson, presented the Board of Education with a projection of the district’s financial state last week. Beginning next fiscal year, the district will be spending more money than it brings in. It has enough money in its reserve to cover the estimated $434,000 shortfall, but the gap between revenue and expenditures widens the following year and the year after that. And by 2009-10, it is estimated that the district will not have enough money in the reserve to cover its deficit spending. Not only will there not be enough money to make up for a $4.1 million deficit, the district will also not have the money to maintain the state-mandated 3 percent reserve fund, which would approximately need to be $3.6 million.
“It’s seems to me the board it looking at, at best, a $6 [million] to $7 million problem that it has to plan for this year,” said Paul Silvern, chair of the district’s Financial Oversight Committee, who spoke to the board during the public comment period after Hodgson’s presentation.
Silvern, who was a critic of the recently approved 5 percent pay raise for the district’s teachers, also mentioned how the budget projections assume there will be no pay raises for any other district staff.
“That’s a fairly stringent assumption,” Silvern said.
The contract for the classified employees (those who are not teachers or administrators) expires at the end of June and school administrators and some district staff are requesting a salary increase.
The projected financial situation for 2009-10 also assumes the $6.5 million parcel tax passed by voters in 2003 will be approved again after it expires in June 2009.
The major reason for the district’s revenue woes is because of declining enrollment. Most district revenue comes from the state, and is based on daily attendance. Enrollment is down more than 800 students compared to the 2001-02 school year, and it is projected to dwindle by nearly 600 more in the next two years.
One option the board might consider is reversing the moratorium it currently has on allowing children from areas outside the district to attend SMMUSD schools.
Hodgson also had a few other proposals for the board, including shifting around monies from its various designated accounts. SMMUSD Superintendent Dianne Talarico said district staff would present ideas for budget cuts and other revenue adjustments at the board’s next meeting on April 19.
“Obviously we have some work to do…” Hodgson told the board. “We think we know what we’re about. It’s likely not to improve on its own. It’s likely to deteriorate.”
The district must approve a budget for next fiscal year by late June. The state requires school district budgets to project their financial situation two years ahead.
Rebecca Kennerly, a longtime district volunteer, suggested that the hiring of a public affairs officer could increase enrollment by encouraging those living in the district boundary and currently attending private school to switch over.
“[This would be somebody] to provide information on the situation in the community,” Kennerly said. “One thing we need is to retain students in the district and to attract families… [and give them] the good news that our families and our community needs to know.”
Kennerly estimated that a public affairs officer could attract 25 to 50 students to the district.
Meanwhile, the district is also working on putting together its Facilities Master Plan. This is its 20-year plan for district enhancement, which will partially be funded by last year’s voter-approved $268 million bond. The district had school-specific meetings last week and this week. Some of the parents at last week’s meeting at Malibu High School expressed concern that the current proposal for the Facilities Master Plan is limited on its enhancements for athletic facilities, and does not use a vacant district-owned property adjacent to the school. One of the proposals for that area is to create a road that loops around Malibu High School and the adjacent Juan Cabrillo Elementary School. Some parents said that could cause more traffic problems.