The Mammoth Unified School District (MUSD) Board of Education received welcome news regarding the projected 2013-14 fiscal year budget, thanks to a California state budget reassessment conducted in May.
Interim Superintendent Lou Stewart announced an additional funding supply of $170 per student, for a total of $184,790, allocated by the state to MUSD to help the district meet common core standards. The one-time money will be available in the fall, Stewart said, and can be spent over two years.
“Surprisingly, the state has been seeing some additional revenue from sources like Prop 30 and taxes,” explained Business Manager Donnie Salamanca.
With the May revision of the state budget, Governor Brown allocated a total of $1 billion in funding to implement common core standards across the state. “The surprise was, the state found additional funds and actually passed them along to schools,” Salamanca said.
Salamanca reported more positive news regarding the MUSD FY 13-14 budget. Because staff was able to conduct the third interim budget report including May payroll and benefits, “We have a much more accurate picture of the budget than four to five months ago,” he said.
This includes a decrease in the overall projected budget deficit for the coming year, with the help of one-time funds and adjustments to projections, from about $670,000 to $187,000.
A large factor in expenditure savings was MUSD’s own reassessment of its expenditures, and subsequent finding that not many teachers had called in sick during the last school year, or required substitutes. Salamanca explained that the MUSD begins with a conservative estimate of these types of expenditures, but that the recent reassessment showed an overall savings of about $112,000.
Nevertheless, the MUSD budget continues to run a deficit, Salamanca reported, relying heavily on one-time funds to keep it from dipping too deeply into a depleted reserve of about $4.6 million. “We still have a structural deficit even without the help of one-time funds like Prop 30,” he said, which will supply $217,400 per year until FY 18-19. He also noted the end of the unrestricted Forest Reserve fund, which once provided about $90,000 per year to MUSD.
Board Member John Stavlo expressed his concern about the effect of this structural deficit on the MUSD reserve fund. The fund is projected to be down from 38% to 32% next year, and 21% the following year, which would mean a drop from $4.6 million this past year to $2.6 million in FY 14-15. According to Salamanca, current Board policy says that MUSD must retain a reserve of 17%. But every year the district taps into savings, the reserve comes closer to falling below that required percentage. “I want 5% that we never go below,” said Stavlo. “Currently, we’re not expecting to fall below 5% within the next two years,” said Salamanca. “But if you see the trend of our deficit spending, we’re eventually going to.”
Board Member Jack Farrell observed that the fluctuation in reserve funds “is basically how basic aid districts have to operate. I’m alarmed by the structural deficit,” he said, “but not by the up and down swings that are built into the basic aid formula.”
Stavlo maintained the necessity of capping the lowest reserve at 5%. “To me, the reserve is money that you set aside to cover unknown or unexpected things,” he said. Salamanca agreed, characterizing this as a “rainy day fund.” He noted that even with projections that suggest the reserve could drop dangerously close to 5%, anything could change between now and the budgets of the next several years. A proposed solar energy project with TerraVerde, for example, could dramatically reduce MUSD expenditures. “We’re looking to decrease deficit spending, looking at revenue enhancement through solar projects, for example,” he said. “Or, if not a solar project, then other energy conservation studies. We’re looking into everything.”