Calaveras Unified forsees lean times

By Mike Taylor

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Posted: Friday, December 19, 2008 10:20 AM CST

While state leaders try to get their calculators around a $14 billion budget deficit, trustees at Calaveras County’s largest school district hope the cuts everyone expects to come from Sacramento don’t slice too deep.

Mike Merrill, Calaveras Unified School District assistant superintendent for fiscal services, painted a bleak picture for the next year or two at Tuesday’s regular meeting of the board of trustees. In his narrative preceding the School District Certification and Criteria and Standards Review Summary – the first of two interim reports all school districts must send to the state to indicate financial stability – Merrill said that CUSD is able to certify – as of Oct. 31 – that it will be able to meet its financial obligations for the next two years, but noted there are several areas he’s watching closely on the uncertain horizon.

“There are, however, some very real concerns about the state of the state’s economy as well as the local economy and the decrease in student enrollment and drastic decline in developer fee revenues,” Merrill told the trustees.

Commonly called the “First Interim Report,” the document provides a snapshot as to how a district’s approved budget is managing money as the realities of each school year unfold.

“These reports compare the ongoing financial conditions to what was projected in the district's original budget,” according to EdSource, an independent, nonpartisan, not-for-profit organization that strives to clarify myriad issues in educational finances. “They include updates on staffing and student attendance, year-to-date accounting and projections of future expenses. They can also shed light on potential cash flow problems.”

Merrill said CUSD has lost another 2.1 percent of its students in declining enrollment, even though there was a spike in the student population at the end of the 2007-08 school year. The district’s average daily attendance has gone from 3,421 last year to 3,411 this year; each student the district loses represents a loss of $6,120.20 to the district’s revenue limit allocation.

He told trustees that they would have to keep a close eye on staffing levels as the budget continues to tighten.

“We cannot staff like we were yesterday when we have fewer students today,” Merrill cautioned.

Trustees voted earlier this year to sever a contract with Aramark Corp. for management of its food service program and they have realized a substantial savings, but the program still runs in the red. He said it appears as though the deficit in the program has been reduced from about $130,000 to $62,000 as this year’s balances are playing out.

“There is no reason that CUSD food service cannot at least break even within the next two years,” he said.

An area of major concern is special education. CUSD is facing about a $1.35 million “hit” to its general fund from mandated programs the district must provide to students that are not funded by the state or federal governments.

“No one has the ultimate answer for that, which is the black hole of money we know as special education,” Merrill wrote. “All students are important to educate, but some are more costly to educate than others.”

Long-term debt has reared its head as a difficulty for the district because it has until now relied on developer fees paid from new construction in the district to service its annual payments toward Certificates of Participation CUSD has entered into. The payments are $688,666 this year and jump to $705,088 in the 2010-2011 budget year.

This year, developer fees in the amount of only $450,000 have been collected against the nearly $690,000 required payment.

“The only other way to pay off this debt service once our developer fees account is dry would be through our unrestricted general fund, which is already very hard hit,” he said.

He recommended trustees look to bolstering the district reserves in future budgets. CUSD today has about a 6.9 percent reserve – ahead of what the state requires all districts to maintain – but Merrill recommends a 10 percent reserve for the future.

“The next few weeks we hope will be full of work in Sacramento and some decisions and compromises can be made,” Merrill wrote. “The longer they wait, the more of a hit we will take in the current and future of our district.”

Contact Mike Taylor at mtaylor@calaverasenterprise.com.

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