Lodinews.com

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

School districts hang on to spending reserves

Local officials cite limits on money, the need for an emergency cushion

Print
Font Size:
Default font size
Larger font size

Posted: Thursday, May 3, 2012 12:00 am | Updated: 6:09 am, Thu May 3, 2012.

On paper, some local school districts' reserves appear flush with money while layoffs and other cuts continue.

For the last several years, area school boards have reduced staff, increased class sizes and eliminated elective courses — and seem poised to do so again this spring — all the while packing their savings accounts with rainy-day funds.

The three largest local districts — Lodi Unified School District, Galt Joint Union Elementary School District and Galt Joint Union High School District — currently have a combined $56 million in reserves. And they are not alone.

Districts statewide are stockpiling more and more taxpayer money, with some sitting on enough reserves to pay a full year of expenses. Administrators say that while these balances can help stave off staff or program cuts, they cannot eliminate the need for reserves.

Among other things, reserves are needed to make up for state payments not being received and fund payroll, according to local district officials.

"Every year since 2008-09, the state has cut our district's revenues, and the district has had to build up its reserves to get us through the next school year," Galt Joint Union High School District Superintendent Daisy Lee said in an email to staff.

The high school teachers union in Galt has questioned why there are ongoing cuts when the district's reserves are not only in the double digits, but union president Alex Bauer said they continue to grow year after year.

He points out the district currently has an ending balance of $2.7 million, or 20 percent of the total budget, in reserves — 17 percent more than is required by the state — and is calling on officials to unlock the money to pay for student programs cut in previous years.

"The district, for the fourth year in a row, is claiming that doom awaits right around the corner unless we take drastic measures including cutting services for our students," he said. "There has got to be a better way to serve our students."

Last spring, the board approved reducing the hours of the adult school director, issuing 10 classified position layoff notices and pink slips for seven teachers.

Last month, trustees approved issuing pink slips to the equivalent of six teachers and six classified employees.

But of the reserves that equal 20 percent of the district's budget, only a portion ($569,000, or 3.1 percent of the budget) is available for general expenses, according to chief business official Audrey Kilpatrick.

Another $554,343, or 3 percent, is required by the state and county offices of education to be set aside for economic uncertainties, she said, and roughly 5 percent was designated by the school board to used to cover this year's projected deficit.

The remaining $1.6 million (or 8.7 percent of the 20 percent) carried over into 2011-12 and covered the deficit, as the district did not make enough budget cuts in 2011-12, according to Kilpatrick.

Currently, the district has an operating deficit of $1.2 million, which means it is spending more this year than it is receiving in funding. In the last six years, the total revenue the district has received has decreased by $1.4 million, while expenses have increased by $842,460, Kilpatrick said.

In 2012-13, the district is facing a $1.9 million deficit and is currently in negotiations with its unions.

However, $146,000 in pay increases already approved in union contracts with both classified and certificated employees are among the issues the district must budget for next school year, Kilpatrick said.

To address the budget deficit, the board may be asked to cut home-to-school transportation, freeze salaries or eliminate or reduce funding contributions to specific programs including the adult school and special education. A vote is expected next month.

The district's reserves have fluctuated in recent years. At the end of 2006-07, for example, there was only about 10.5 percent of the district's budget in the account.

The reserves climbed to 24 percent of the budget in 2008-09, only to be drawn back down to the 13 percent budgeted for the end of this school year, according to figures provided by Kilpatrick.

Galt Joint Union Elementary School District's reserves have remained low. The 2010-11 ending balance was about 13 percent of the district's budget, but only 9.8 percent of that was reserved for economic uncertainties, according to Debbie Schmidt, director of business services.

In April, she projected this year's ending balance will be approximately $2.6 million, or just 8 percent of the district's budget, a portion of which can only be used on specific programs such as special education.

Schmidt contends the district has not had a balanced budget for the last few years and has had to draw down its reserves.

"We have been spending more than we have received and have used our reserve to hang on to one more year of programs for a number of years now. This will catch up in 2012-13," she said.

But in Lodi Unified School District, Tim Hern, the district's chief finance officer, said the numbers in reserve accounts tell only part of the story.

Before the fiscal crisis, an average school district kept approximately 10 percent of its budget in reserves. But with the state's fiscal uncertainty and deferred payments to school districts, officials tucked one-time federal money into their proverbial piggy banks and reserves ballooned, he said.

At the end of the last school year, Lodi Unified had $48 million, or 23 percent of its annual budget, in reserves to be strategically ready for future cuts, Hern said.

"You need large reserves to ride out the fiscal wave of uncertainty," he added.

Although the district was looking to stretch its budget until 2016, when financial experts expect the economy to turn around, it has had to draw on the savings account. At the end of this school year, Hern estimates that reserves will be just under $16 million.

The district is facing automatic salary increases for some employees that could draw reserves down further, according to Hern.

And at least one trustee has said the account might need to be used to stave off cuts to school bus routes.

Contact reporter Jennifer Bonnett at jenniferb@lodinews.com. For more information about local education issues, read our Education Café blog.

 

More about

More about

More about

Rules of Conduct

  • 1 Use your real name. You must register with your full first and last name before you can comment. (And don't pretend you're someone else.)
  • 2 Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually oriented language.
  • 3 Don't threaten. Threats of harming another person will not be tolerated.
  • 4 Be truthful. Don't lie about anyone or anything. Don't post unsubstantiated allegations, rumors or gossip that could harm the reputation of a person, company or organization.
  • 5 Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
  • 6 Stay on topic. Make sure your comments are about the story. Don't insult each other.
  • 7 Tell us if the discussion is getting out of hand. Use the 'Report' link on each comment to let us know of abusive posts.
  • 8 Share what you know, and ask about what you don't.

Welcome to the discussion.

Video

Popular Stories

Poll

Loading…

Mailing List

Subscribe to a mailing list to have daily news sent directly to your inbox.

  • Breaking News

    Would you like to receive breaking news alerts? Sign up now!

  • News Updates

    Would you like to receive our daily news headlines? Sign up now!

  • Sports Updates

    Would you like to receive our daily sports headlines? Sign up now!

Manage Your Lists