School district administrators offer, and trustees question, grim budget numbers

School district administrators offer, and trustees question, grim budget numbers

Michele Ellson

Alameda school district administrators painted a grim picture of the district’s finances over the next few years, though school board trustees questioned whether constant changes in state funding and policies make it impossible to offer a true picture of the district’s financial future.

Budget projections Chief Business Officer Robert Shemwell offered the Board of Education on Tuesday night showed the district would use up its $8.6 million in reserves over the next three years and would need to make $1.8 million in cuts before the 2013-2014 school year. The three-year budget projections are mandated by state law.

The projections are based in part on a potential loss of more than $3 million a year if a tax measure Governor Jerry Brown is expected to put on the November ballot fails and state funding cuts to schools are implemented. The budget numbers do not include more than $12 million in annual revenues from the Measure A parcel tax, which Shemwell said will be detailed in their own separate budget report.

“We’re in a situation where we have to plan for the worst and hope for the best,” he said.

In addition to the potential funding loss the district could suffer if such cuts are enacted, Shemwell said the district is bracing for the potential effect of Brown’s proposal to eliminate categorical funds that are tied to dozens of specific programs and replace those with a weighted funding formula based on the number of low-income and non-English speaking students a district serves. State funding comprises a majority of most California school districts’ funding.

Shemwell said the effects of the proposal, which would be phased in over several years, are unclear. A state Department of Finance chart showed Alameda Unified earning $6,302 per student for the 2012-2013 school year if the new rules pass, an amount that would rise to $7,981 when the program is fully implemented in 2017-2018.

The district is also preparing to offer transitional kindergarten, a program that was authorized by the state Legislature but isn’t funded under Brown’s proposed budget. And Shemwell said the state is making cuts to child care and transportation funding.

District leaders have shoveled millions of dollars into reserves over the last few years, something that’s become a source of controversy in the wake of Measure A’s passage and as teachers negotiate a new contract. Teachers and union leaders have said the district should spend some of the money on better staffing, pay and benefits, while administrators have argued the savings are necessary to weather constant state funding uncertainties.

Some of the district’s reserve, for example, was socked away after the state restored earlier cuts to the grant it pays to cover each student’s basic educational costs but then threatened new cuts this year. Shemwell said that money, which remained in reserve after far less severe cuts were ultimately made, will be drawn on in the event a tax measure loses and state lawmakers impose “trigger” cuts next year.

“That money is still serving its purpose. It’s waiting to be called upon if the state pulls the triggers on us,” Shemwell said.

He said Alameda Unified’s reserves saved the district from being forced to take out bridge loans to cover expenses due to growing deferrals in state funding. Last year, he said, the district had to take out $9 million in loans to cover its bills. But this year, even as the state is expected to defer 38.4 percent of the money it has promised to pay the district until the school year is over, the district will still be able to cover its bills without a loan, Shemwell said.

As part of the discussion, Shemwell said the district is negotiating with its teachers to maintain class sizes at 25 students per teacher in kindergarten through third grade.

“At least we’re trying for those two years there,” he said.

The Alameda Education Association has offered a proposal that would keep those classes at 25 students per teacher through 2014-2015, then drop them to 20 students per teacher after that. Class sizes in grades 4-8 would drop to 30 students per teacher, and combination classes containing more than one grade would be smaller.

Superintendent Kirsten Vital said Monday that the district hasn’t formally responded to the proposal, though she said the district wants permanent language on class size in anticipation of a loss of state funding to support smaller classes.

The district is in mediation with its teachers on the class size issue, though the mediation applies to an agreement that is separate from the contract they are negotiating now.

While Shemwell said the numbers he presented are what he’s required to send to the county, trustees asked whether they offer an accurate picture of the district’s finances over the next few years.

Trustee Mike McMahon called the budgets an “academic exercise” and said he doubts the state will make the cuts it’s threatening to make, even if a tax measure doesn’t pass in November. He said that even in the worst case, the district has the money it needs to make it through the 2012-2013 school year.

“Why are our reserves going up? Because we continue to plan for the worst, and it doesn’t happen,” McMahon added.

Still, some trustees said they appreciate the district’s budgeting approach.

“It drives you nuts when you have to project that way, when you know it’s not going to look like that. It’s deceiving,” Board President Margie Sherratt said. “I appreciate the fact that you do, and that you are conservative in budgeting our money.”